Recommended Resource – The Accountable Organization
The Accountable Organization: Reclaiming Integrity, Restoring Trust
by John Marchica
About the Reference
The Accountable Organization: Reclaiming Integrity, Restoring Trust
Benefits of Using this Reference
Highly accountable organizations realize several strategic advantages, including the ability to attract and retain the best talent and to more readily recognize and seize upon emerging business opportunities, because of their more engaging and productive work environment. While these rewards are substantial, many executives and managers will not embark on the journey of creating an accountable organization because attaining and maintaining high levels of accountability is extremely difficult.
StrategyDriven contributors believe there exists an interrelationship between an organization’s strategic planning and tactical execution and its level of accountability. We like The Accountable Organization
Strategic Planning Warning Flag 1 – Business Unit versus Goal-Based Planning
Executives and managers maximize their company’s value when they focus the efforts of the entire workforce on the organization’s prioritized mission goals and supporting objectives. Some executives and managers, by making the mission measurable, prioritizing those measures, and sharing accountability for identifying and executing the most value adding initiatives, ensure their workforce focuses on those activities that maximize the organization’s overall value. In other organizations, planning and/or execution shortfalls allow the pursuit of initiatives that do not optimally support mission achievement; diminishing the organization’s value creation capacity. While many factors result in misaligned focus at all levels of the organization, one in particular, the failure to align the organization’s programs, budgets, and procedures to the mission’s prioritized goals and supporting objectives is the most devastating.[wcm_restrict plans=”40660, 25542, 25653″]
An organization’s programs, budgets, and procedures serve as the foundation for defining what activities the workforce will perform and how these activities will be performed. Subsequently, any misalignment with the mission goals will result in the expenditure of precious, limited resources on work other that which would create the most value; ultimately diminishing the organization’s overall worth. Because of their foundational nature, these activity driving business processes will continue to result in reduced value creation, regardless of any intervention by executives or managers, until the misalignment is corrected.
Misalignment between the organization’s programs, budgets, and procedures often occurs during the planning process as a result of business unit rather than goal-based planning. Business unit based planning is a result of either the planning process itself or the way in which the process is executed. While not all inclusive, the four lists below, Process-Based Warning Flags, Process Execution Warning Flags – Behaviors, Potential, Observable Results, and Potential Causes, are designed to help organization leaders to recognize whether an alignment problem exists between the organization’s mission goals and its programs, budgets, and procedures. Only after a problem is recognized and its causes identified can the needed action be taken to move the organization toward improved performance.
Process-Based Warning Flags
- activity importance assessments are made relative to a business unit’s goals and objectives
- interpretation and application of mission measures differ between business units when evaluating proposed activities
- business units gather the same information (i.e. market information, lending and inflation rates, and internal demographic, capacity, and accounting data) for activity assessments from differing sources
- business units have differing business planning processes
Process Execution Warning Flags – Behaviors
- executives and managers promote activities only important to or performed by their business unit
- lack of executive participation or oversight of activities not under their direct functional control
- expressions of activity importance absent a mission-based contribution
- continued business planning until or business plan endorsement only after all constituent business units have contributing activities
Potential, Observable Results
- organizationally significant activities or projects draw resources from only one business unit
- some projects having a higher mission value are deferred because of resource shortages resulting from the performance of lower value, functionally focused activities
- projects have a very narrow benefit basis or benefit a very narrow portion of the organization (a single or a few business units)
- projects frequently suffer delays and cost overruns from circumstances that should have been expected but were only discovered after work initiation; often by groups not originally engaged in the planning process
- lack of organizational buy-in to and implementation of a project’s output, especially by business units other than that of the project sponsor
- functional silos are created between two or more business units limiting the interaction and collaboration between these groups
Potential Causes
- merger of several organizations, each with their own planning processes, into one
- functional silos exist between two or more business units
- inability of executives and managers to see the broader strategic picture
- lack of cross-disciplinary experience, education, and/or training within the executive and management teams
- existence of a dysfunctional executive (primary) and/or management team often the result of a lack of trust, commitment, and/or accountability
- lack of shared accountability for the organization’s performance among executives (primarily) and managers
- absence of vertically cascaded, horizontally shared performance measures anchored in the organization’s mission
- executive and manager worth is attributed to the individual’s span of control
- rewards based primarily on individual achievement within one’s functional area
- lack of reward for team-based efforts, especially cross-functional teams
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[/wcm_nonmember]Additional Information
The following StrategyDriven recommended best practices are designed to reduce the likelihood of business unit based planning while simultaneously fostering mission goal based planning:
- Strategic Planning Best Practice 1 – Make the Mission Measureable
- Strategic Planning Best Practice 2 – Prioritize the Mission
- Strategic Planning Best Practice 3 – Strategic Discipline
- Strategic Planning Best Practice 7 – Shared Accountability
- Strategic Planning Best Practice 8 – Results First, Action Second
- Organizational Performance Measures Best Practice 1 – Vertically Cascading
- Organizational Performance Measures Best Practice 2 – Horizontally Shared
- Organizational Performance Measures Best Practice 4 – Core Performance Measures
- Organizational Performance Measures Best Practice 5 – One Source of the Truth
StrategyDriven Contributors have created several illustrations to visually depict the mission to programs, budgets, and procedures alignment. The Strategic Pyramid Model highlights the alignment that should exist between an organization’s mission and its programs, budgets, and procedures. The Strategic Organizational Alignment Model reveals the typical executive and managerial responsibilities associated with identifying, reaffirming, and translating the organization’s mission into goals and objectives and then into programs, processes, and procedures.
About the Author
Nathan Ives 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.
Evaluation and Control Program Best Practice 1 – Data Synthesis
Evaluation control programs must be credible in order to add meaningful value to the organization. Credibility is built not only by the quality of the data collected but also by the method by which it is collected, how it is combined, and how it is interpreted to create useful information in support of decision-making.[wcm_restrict plans=”41260, 25542, 25653″]
Data synthesis or data combination should be performed in a manner that enhances the credibility of the conclusions drawn. This process is comprised of two important parts: data prioritization and data association.
Data Prioritization
Begin with the Most Credible Data – data having high accuracy or believability. Examples of data from high to low credibility include:
- what we see – observable, measurable
- what we read – what others observed, measured
- what we hear – what others tell us, opinions
Begin with Refined Data – data having human intelligence and analysis incorporated into the findings; often by individuals closer to or directly involved with the occurrence or possessing special skills and experience in data analysis. Examples of data from high to low refinement include:
- root cause analysis
- self assessment reports
- apparent cause analysis
- benchmarking comparison reports
- management observation reports
- organizational performance measures
- condition reports, operating logs and records
- surveys, opinion polls
Begin with the Most Significant Data – data gathered from impactful events; revealing true organizational values and common behaviors because people tend to return to their core convictions and primary habits during times of increased stress.
Begin with the Most Recent Data – data representing the way things are or what is rather than the way things were or what was. The time period representing recent data varies depending on the rate of change of the parameter of concern.
Data Association
Ensure Only Like Data is Combined – data having equivalent meaning, units, time frames, and absolute references can be relatable. Combining data not possessing these qualities may lead to logic errors when making decisions including:
- Bad Analogy – claiming that two things are similar when they aren’t
- Extended Analogy – claiming that two things related to a third are therefore, by extension, related to each other
- Argument from Spurious Similarity – suggesting two items sharing some similar characteristics is evidence of a relationship between them
- Equivocation – asserting the existence of a relationship between multiple items by associating a word with more than one meaning to each differently; one with one meaning, another with a second meaning, and so on
Ensure No Double Counting of Data – individual data points occurring more than once in a combined data set. This circumstance can occur when combining two or more refined data sources based on one or more common underlying facts and tends to result in over-stated conclusions.
Following these guidelines will enhance the accuracy and credibility of the information presented to decision-makers. Improved accuracy reduces decision risk while increased credibility enhances the confidence decision-makers have in their chosen direction. Thus, sound data synthesis, through proper data prioritization and association, enhances the organization’s opportunity for success.[/wcm_restrict][wcm_nonmember plans=”41260, 25542, 25653″]
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About the Author
Nathan Ives 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.
Recommended Resource – Manager Tools
Manager Tools
by Michael Auzenne and Mark Horstman
Website Address: www.Manager-Tools.com
About the Reference
Manager Tools by Michael Auzenne and Mark Horstman is a weekly podcast that provides managers with the step-by-step tools and techniques for becoming more effective. Updated weekly, the Manager Tools podcasts provide insight to a broad range of topics including feedback, one-on-ones, coaching, and mentoring. Manager Tools was recognized as the best business podcast in 2006 and 2007 by Podcast Awards.
Benefits of Using this Reference
A great strategy is nothing more than a tome of good intentions until executed. The more accountable the organization and the more effective the execution of its processes the greater the likelihood the organization will achieve its mission objectives.
Professional executives and managers are responsible for establishing and reinforcing a culture of accountability and effectively leading execution of the organization’s processes. StrategyDriven contributors like Manager Tools podcasts because each of these approximately 30 minute discussions provides a clear, step-by-step method executives and managers can immediately implement to increase their organization’s accountability and their leadership effectiveness. We particularly encourage all of our readers to listen to the Manager Tools Basics podcast series focused on feedback, one-on-ones, coaching, delegating, and conducting meetings.
Many of the Manager Tools recommendations support the effective execution of StrategyDriven best practices; making Manager Tools podcasts a StrategyDriven recommended listen.
Final Thought…
The vast majority of Manager Tools content is FREE! We encourage all members of the StrategyDriven community to take a moment and visit the Manager Tools website and begin to benefit from Mike and Mark’s advice today.
Diverse Indicators
A picture comprised of only one color is not a picture at all; rather, it is simply a field of color. Likewise, a single performance indicator cannot paint a picture of performance. To acquire complete understanding of the overall performance of products, services, business units, or individuals requires multiple indicators to compare and contrast the various and often complex aspects of their individual and interrelated behaviors.
Performance of an item itself can rarely be characterized by one measure because of the complex array of relationships between an item’s characteristics. For instance, the return on investment of a new product will be influenced by the targets established for its time to profitability and break-even point. All of these measures will similarly be impacted by design decisions that determine the look, feel, functionality, and price point of the product.
Products, services, business units, and individuals interact and influence each other; creating additional demand for multiple measures to characterize overall performance. An example of this is when increasing production of one product limits the availability of equipment needed to produce one or more other products thereby limiting the later products’ availability.
Fundamentally, organizational performance measures drive decision-making and it is here that the power of diverse indicators is revealed. By providing a complete picture of an item’s performance, diverse measures arm decision-makers with the knowledge needed to reduce the uncertainty of their choices and enhance the likelihood of achieving sought after outcomes.
Additional Information
Additional information regarding organizational performance measures can be found in the StrategyDriven whitepaper series Organizational Performance Measures. A more detailed discussion on decision-making can be found in the members-only category, Decision-Making.
About the Author
Nathan Ives 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.
Enterprise Performance Measurement
We can work with you to assess and improve your performance measurement system; yielding metrics and reports that are operationally relevant, organizationally consistent, and economically implemented. The resulting system helps improve managerial decision-making, organizational alignment, and individual accountability. Learn more about how we can support your implementation and upgrade efforts or contact us for a personal consultation.