StrategyDriven Strategic Analysis Best Practice

Strategic Analysis Best Practice 3 – Identify the Hidden Drivers (Continued)

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StrategyDriven Strategic Analysis Best PracticeSimply put, people tend to behave in the manner for which they receive reinforcement. There often exists both documented and undocumented performance drivers that exert unintended pressure on individuals to act in ways counter to achieving the organization’s mission goals. As a continuation of Strategic Analysis Best Practice 3 – Identify the Hidden Drivers, this article expounds on several common hidden performance drivers and how they may adversely impact mission achievement.[wcm_restrict plans=”25541, 25542, 25653″]

Documented Drivers

  • Compensation and Incentive Plans: By design, compensation and incentive plans reward individuals for specific behaviors. If the behaviors specified and rewarded are not aligned to the organization’s goals, it is likely the individual will behave in a manner that diminishes mission achievement. The impact of misaligned compensation and incentive rewards is more significant at higher levels of the organization because of the greater influence and span of control these individuals possess.
  • Incentive Plan Time Frames: In the case of executive incentives, payouts often occur at some future time in order to promote increased accountability for sustained organizational performance. However, these time frames may limit the duration of projects executives will endorse. The elevated risk associated with long-term projects represents a near-term risk to the executive incentive payout in order to realize a long-range gain for which the executive is not incentivized.
  • Workgroup Performance Measures: Performance measures provide periodic, public reinforcement; driving individuals to behave in a manner that results in a positive measurement outcome. Like compensation and incentive plans, if workgroup performance measures are not aligned with higher level and mission goals they will tend to drive behavior in a manner that diminishes mission achievement.
  • Policies, Procedures, and Standards: People also behave in the manner which they are specifically directed, such as by policies, procedures, and standards. On occasion, these documents become misaligned with the organization’s goals through a series of revisions in response to various events. When this occurs, performance unintentionally deviates from that which most directly supports mission accomplishment.

Undocumented Drivers

  • Undocumented Reasons for the Organization’s Founding: Beyond the organization’s mission statement, the reason for the organization’s creation is usually understood and acted upon by the Board of Directors and/or a small select group of the senior leadership team. Rooted in the organization’s history, this undocumented purpose guides decision-making at the top of the organization even when apparently counter to the stated mission. When this occurs, not only is the mission’s achievement diminished by the direction set but there exists a risk of creating conflicting priorities for managers and individual contributors further limiting personnel effectiveness.
  • Organizational Legacy: Organizations with a history rich in tradition and heroes may attempt to live up to or remain faithful to the legacy. Holding on to these past methodologies and philosophies may reduce the organization’s efficiency in achieving its goals in today’s rapidly changing, technologically driven marketplace.
  • Success Driven Complacency: Organizations experiencing long periods of continuous success may over time question the need to seek improvements or change; believing that they represent the industry benchmark or standard. Today’s highly competitive marketplace often leaves those who rest on their laurels struggling to remain viable.
  • Personal Relationships (or the lack thereof): People tend to identify and form relationships with those they perceive are like themselves. This may result in the endorsement of the actions and recommendations of one individual over another for relationship reasons rather than as a result of an objective assessment. On occasion, the relationship-based selection will result in the lower value option being pursued.
  • Defer to Perceived Important Groups or Individuals: Whether real or not, some groups and/or individuals are often perceived as being critically important to the organization. Abdication of decision-making to these individuals, especially on topics outside of their area of responsibility or knowledge and experience base, can result missed opportunities or increased adverse impacts. (See Decision-Making Best Practice 4 – Identify the Target.)
  • Personal Agendas: Hidden personal agendas often seek to enhance one’s prestige and influence or protect one’s position and expand one’s span of control regardless of the overall organizational impact. Ego-driven power struggles of this nature can irreparably damage an organization and often result in missed opportunities because of the roadblocks erected by those who don’t stand to significantly benefit from taking the action.
  • Unspoken Values: Valuing certain behaviors or personnel characteristics may personally benefit a majority of organization members. Subsequently, these behaviors and personnel characteristics become part of the corporate value system even if these values are socially unacceptable and counter to optimal mission achievement.

Remember, hidden drivers are not necessarily detrimental to the organization’s performance. It is important, however, that they are understood and assessed to ensure business planning and execution efforts are not diminished or undermined by these influencers of behavior.[/wcm_restrict][wcm_nonmember plans=”25541, 25541, 25653″]

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About the Author

Nathan Ives, StrategyDriven Principal is a StrategyDriven Principal and Host of the StrategyDriven Podcast. For over twenty years, he has served as trusted advisor to executives and managers at dozens of Fortune 500 and smaller companies in the areas of management effectiveness, organizational development, and process improvement. To read Nathan’s complete biography, click here.

The Advisor’s Corner – How Do You Sell a Major Change?

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Question:

Feedback indicates my company’s current leadership training program, though inexpensive, yields little to no value. My research shows that an alternative training program has produced superior, measurable results at other organizations. How should I go about selling my manager and the organization on the need to change from our current training program to this alternative one?

StrategyDriven Response:

Decisions to make significant changes are not often made quickly. Rather, these decisions are made after receiving input from affected stakeholders and subjecting each available option to a thoughtful cost versus benefit evaluation. With this in mind, it is easy to understand why organizations often use business cases to facilitate the decision-making process.

Well constructed business cases often require significant personnel and financial resources to develop. Considering the complexity and significance of the circumstance presented, we believe your first step should be to gain authorization to expend the resources necessary to research and develop the business case for the proposed change in the leadership training program. Once developed, your well structured business case, clearly presenting the costs and benefits associated with each alternative, will help you secure the management decision you seek to revise the organization’s leadership and training program.

Final Thought…

We suggest your business case include not only the two options presented in the initial question but also any additional alternatives presented by the responsible manager or other members of the organization. Leveraging their knowledge and experience may help you identify other worthwhile alternatives that would otherwise not be considered.

The StrategyDriven website was created to provide members of our community with insights to the actions that help create the shared vision, focus, and commitment needed to improve organizational alignment and accountability for the achievement of superior results. We look forward to answering your strategic planning and tactical business execution questions. Please email your questions to TheAdvisorsCorner@StrategyDriven.com.

New Model Release – Opportunity & Problem Statement Development Model

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StrategyDriven contributors are pleased to announce the release of our seventh model: Opportunity & Problem Statement Development model. This model compliments StrategyDriven‘s decision-making best practices Identify the Target and Multidiscipline Teams by illustrating the often complex, multifaceted nature of organizational opportunities and challenges and how cross-functional teams are needed to ensure full understanding and appropriate response is taken to maximize benefits or minimize losses.

StrategyDriven Resource Projection Article

Resource Projection Best Practice 3 – Controlling Assumption Changes

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StrategyDriven Resource Projection ArticleStandardized activity resource assumptions enable decision-makers to anticipate the quantity and type of resources needed to perform approved work; facilitating selection between competing alternatives, long-term resource planning, day-to-day scheduling, and performance measurement. Over time however, personnel, process, and business environment changes will necessitate reevaluation and alteration of the organization’s standardized activity assumptions. To accommodate these changes and maintain the benefits of using standardized assumptions requires establishment and use of a change control process.[wcm_restrict plans=”40922, 25542, 25653″]

Standardized activity resource assumption change control processes vary in complexity depending on the risk associated with the activities involved. Regardless of their complexity, all change control processes tend to share the following characteristics:

  • single approval authority
  • documentation of the new assumption and its change justification including application of appropriate records filing and retention
  • application of the new assumption to all vertically and horizontally impacted activities
  • reassessment of the organization’s activity portfolio and action plans based on the updated activity resource needs
  • communication of the new assumption and its change justification to impacted stakeholders

Revisions to standard activity resource assumptions should not be taken lightly because of the profound impact these changes can have on the organization. Initially, assumption changes may alter the organization’s perception of its ability and/or the desirability to execute previously developed plans and decisions. These changes will similarly impact the organization’s future decision-making.

Assumption changes have a less observable potential to adversely affect individual and organizational accountability especially if employees perceive the assumption changes as a reduction in performance expectations. To avoid this perception, the following principles should be considered when making standardized activity resource assumption changes:

  • changes are made in response to physically observable and measurable changes to process activities
  • changes reflect data gathered during the performance of several like activities, analyzed in aggregate, to ensure estimate updates reflect efficient work performance and not a single, inefficient effort
  • changes increase performance standards and are communicated as such
  • changes are infrequent

Standardized activity assumptions help decision-makers be both effective and efficient. A well conceived change management process will ensure the assumptions remain credible and protect the organization’s high performance standards.[/wcm_restrict][wcm_nonmember plans=”40922, 25542, 25653″]

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About the Author

Nathan Ives, StrategyDriven Principal is a StrategyDriven Principal and Host of the StrategyDriven Podcast. For over twenty years, he has served as trusted advisor to executives and managers at dozens of Fortune 500 and smaller companies in the areas of management effectiveness, organizational development, and process improvement. To read Nathan’s complete biography, click here.

StrategyDriven Decision Making Best Practice Article

Decision-Making Best Practice 4 – Identify the Target

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StrategyDriven Decision Making Best PracticeDecision-makers and implementers must clearly understand the desired opportunity or problem outcomes in order to effectively select and execute appropriate actions. Without a well defined focal point, decision-makers and implementers risk selecting and performing either inefficient or inappropriate actions; expending resources on low value adding activities thereby diminishing an opportunity’s benefits or increasing a problem’s adverse impacts. Clear, concise opportunity and problem statements enable decision-makers to more readily identify the appropriate solution alternative and give implementers a target against which they can judge the effectiveness of their actions.[wcm_restrict plans=”49240, 25542, 25653″]

Well formed opportunity and problem statements create a compelling reason for expending resources in pursuit of a specific objective. To accomplish this, these statements should consist of a few specific, easily understood sentences containing the following information:

  • existing condition(s) creating the opportunity or problem and the desired condition(s) needed to realize the opportunity’s benefits or avoid the problem’s adverse impacts – the what
  • potential impacts, beneficial and detrimental, the existing and desired condition(s) may have on the organization in the near- and long-term, including the maximum potential impact and any changes over time – the why
  • urgency or time frame in which circumstances must be changed to realize the opportunity’s benefits or avoid the problem’s adverse impacts – the when
  • broad categories of stakeholders impacted by the opportunity or problem – the who

The opportunity or problem statement should not prescribe or preclude a particular course of action, the how. How to deal with the opportunity or problem should be an outcome of the decision-making process. Recognize that the problem statement may evolve somewhat as additional information becomes available during the alternative development, selection, execution, and follow-up portions of the decision-making process.

Final Thought…

Creating an opportunity or problem statement that is uniformly understood and acted upon by the organization can be very difficult. Because all individuals possess varying backgrounds, experiences, values, and beliefs, they will necessarily differ in their perception of the risk, urgency, and appropriate course of action associated with the opportunities and problems presented to them. It is these differences that will challenge the decision-making team when creating and agreeing upon the opportunity or problem statement.

Implementing the decision-making best practices, Multidiscipline Teams and There Can Be Only One, in conjunction with the Identify the Target best practice will help an organization more effectively create opportunity and problem statements. Decision-Making Best Practice 2 – Multidiscipline Teams describes how individuals with differing backgrounds can be teamed together to more effectively execute the decision-making process and in this case create a complete and specific opportunity or problem statement. Decision-Making Best Practice 1 – There Can Be Only One, highlights the need for identifying a single decision-making authority who ultimately approves the opportunity or problem statement and provides oversight for the decision-making and execution process thereby solidifying the uniformity of the organization’s actions.[/wcm_restrict][wcm_nonmember plans=”49240, 25542, 25653″]

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Additional Information

The StrategyDriven model, Opportunity & Problem Statement Development model, illustrates the need for an appropriately qualified multidiscipline team when making complex decisions. The Opportunity & Problem Statement Development model can be accessed and downloaded by clicking on the links provided within this post and from the StrategyDriven Models webpage.

About the Author

Nathan Ives, StrategyDriven Principal is a StrategyDriven Principal and Host of the StrategyDriven Podcast. For over twenty years, he has served as trusted advisor to executives and managers at dozens of Fortune 500 and smaller companies in the areas of management effectiveness, organizational development, and process improvement. To read Nathan’s complete biography, click here.