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1、Stevee Sheerrettta十一月 27, 2022Perfoormannce MManaggemennt:Enhanncingg Exeecutiion TThrouugh aa Cullturee of DiallogueePeterr is Chieef Exxecuttive Offiicer for a meedicaal suupplyy mulltinaationnal tthat receentlyy craaftedd a nnew sstrattegy to ccountter ccompeetitiive tthreaats. The plann strresse
2、ed thhe neeed tto cuut cyycle timee, cooncenntratte saales on hhigheer-maarginn prooductts annd deeveloop neew maarketts. Four montths aafterr cirrculaatingg thee plaan, PPeterr didd a “wwalkaarounnd” tto seee hoow thhingss werre gooing. Hee wass apppalleed. EEveryywherre Peeter turnned ppeoplle, dd
3、eparrtmenntswwholee bussinesss unnitssimpply ddidnt “gget iit.”Firstt surrprisse: EEnginneeriing. Thee grooup hhad ccut pproduuct ddesiggn tiime 330%, meetting its goall to incrreasee speeed-tto-maarkett. GGood. Thhen PPeterr askked hhow mmanuffactuuringg wouuld bbe afffectted. It turnned oout tthe
4、nnew ddesiggn woould takee mucch moore ttime to mmake. Tootal cyclle tiime aactuaally incrreaseed. “Ourr strrateggic pplan messsage is nnot rreallly geettinng thhrouggh,” Peteer thhoughht.Seconnd suurpriise: Salees. The new straategyy callled for a shhiftemphhasizze hiigh mmargiin saales rathher tth
5、at pushhing prodduct downn thee pippelinne ass fasst ass posssiblle. But justt aboout eeveryy sallespeersonn Petter sspokee to was makiing ttranssactiionall salles tto hiigh-vvolumme cuustommers; harrdly anyoone wwas bbuildding relaationnshipps wiith tthe mmost proffitabble pprosppectss. SSaless is
6、doinng juust wwhat itss alwways donee, Peeter thouught. Worstt surrprisse: EEven his top teamm, thhe peeoplee whood hhelpeed hiim crraft the straategyy, waas noot sttickiing tto pllan. Petter aaskedd a tteam membber: “Whhy arre yoou sppendiing aall yyour timee makking suree thee neww macchineery iis
7、 woorkinng innsteaad off devvelopping new markkets?”“Becaause my uunits chhief goall wass to imprrove on-ttime deliiveryy,” hhe annswerred. “But whatt aboout ccompaany ggoalss?” ssaid Peteer. “WWe caame uup wiith aa goood pllan aand ccommuunicaated it vvery cleaarly. Buut noowherre itt isnnt bbeingg
8、 carrriedd outt. WWhy?”Many orgaanizaationns crreatee goood sttrateegiess, buut onnly tthe bbest execcute themm efffectiivelyy. FFortuune mmagazzine estiimatees thhat wwhen CEOss faiil, 770% oof thhe tiime iits becaause of bbad eexecuutionn. “Why CEOs Fail,” by Ram Charan and Geoffrey Colvin, Fortun
9、e magazine, June 21, 1999. WWeak execcutioon iss perrvasiive iin thhe buusineess wworldd, buut thhe reeasonns foor itt aree larrgelyy missundeerstoood. Whyy is it tthat no oone iin Peeters orrganiizatiion wwas aactinng inn synnc wiith tthe sstrattegy? Unnlesss we undeerstaand tthe rreasoons, we ccan
10、tt hoppe too sollve tthe pprobllem.Imagiine ssomeoone hhittiing aa tennnis balll. WWhen the braiin saays “hhit tthe bball,” itt doeesntt auttomatticallly hhappeen. The messsage travvels throough nervve paathwaays ddown the arm and crossses gapss bettweenn thee nerrve ccellss. TThesee gapps, oor “ssy
11、nappses,” arre pootenttial breaaks iin thhe coonnecctionn. IIf neeurottranssmittters dont caarry the messsage acrooss tthe ggap, the messsage neveer geets tthrouugh, or iit geets ddistoortedd. Whhen tthat happpens, eitther the arm doessnt movee at all, or it mmovess thee wroong wway.Creatting a “ccu
12、ltuure oof diialoggue”Just likee a nnervoous ssysteem, oorgannizattionss alsso haave ggaps thatt bloock aand ddistoort mmessaages. Thhe seecrett to effeectivve sttrateegy eexecuutionn liees inn croossinng hiierarrchiccal aand ffuncttionaal gaaps wwith cleaar, cconsiistennt meessagges tthat relaay th
13、he sttrateegy tthrouughouut thhe orrganiizatiion. Souund ssimplle? Its noot. The reasson iis thhat tthe “nneurootrannsmittterss” inn orgganizzatioons aare hhumann beiingsexeccutivve teeam mmembeers, seniior mmanaggers, midddle manaagerss andd supperviisorsswhoose jjob iit iss to makee surre thhat pp
14、eoplles behaaviorr is aliggned withh thee oveeralll strrateggy. Doinng whhat iit taakes to aachieeve aalignnmentt is veryy diffficuult. It is wwhat Ram Charran ccallss, thhe “hheavyy lifftingg” off mannagemment, andd its thhe keey too exeecutiing sstrattegy. As weell see lateer, ttheree is an iimpor
15、rtantt difffereence betwween comppaniees thhat ssucceessfuully aliggn beehaviior wwith straategyy andd thoose tthat do nnot. Commpaniies tthat effeectivvely execcute straategyy creeate a “ccultuure oof diialoggue.” A ccultuure oof diialoggue eencouuragees peervassive two-way commmuniccatioons wwhere
16、e inddividdualss andd grooups 1) qquesttion, chaallennge, inteerpreet annd ulltimaatelyy claarifyy strrateggic oobjecctivees; aand 22) enngagee in reguular perfformaance dialloguee to moniitor behaaviorr andd enssure it iis alligneed wiith sstrattegy. Threee keyys too mannaginng peerforrmancceA cull
17、turee of dialloguee doeesntt happpen insttantlly, aany mmore thann a ffluidd tennnis strooke ddoes. Itt takkes ppracttice, perrsisttencee andd harrd woork. So how exacctly can leadders ensuure tthat straategyy messsagees goo alll thee wayy dowwn thhe liinetthat the tennnis bball getss hitt corrrectt
18、ly? Thee thrree kkeys to mmanagging perfformaance effeectivvely are:1. Achieevingg raddicall claarityy by decoodingg strrateggy att thee topp. MMany orgaanizaationns thhink theyy sennd cllear signnals but dont. In ssome casees, mmanaggers suboordinnate broaad sttrateegic goalls too opeeratiionall go
19、aals wwithiin thheir siloos. Thatts wwhat happpenedd witth Peeters toop teeam. Elssewheere, top teamm memmberss oftten hhave too manyy “toop” ppriorritieesweeve seenn as manyy as 100 in oone ccasewhicch reesultts inn mixxed ssignaals aand bblurrred ffocuss. SStrattegy decoode rrequiires winnnowinng
20、prrioriitiess dowwn too a mmanaggeablle nuumberras litttle aas fiive. 2. Settiing uup syystemms annd prrocessses to eensurre cllaritty. OOnce straategyy is cleaar, oorgannizattionss musst crreatee proocessses tto ennsuree thaat thhe riight straategyy messsagees caascadde doown tthe oorgannizattion.
21、Thhese incllude: strrateggy-ceenterred bbudgeet annd pllanniing ssessiions; staaff aand tteam meettingss to disccuss goalls; pperfoormannce mmanaggemennt meeetinngs; and taleent rrevieew seessioons. Diaaloguue drrivess alll theese pproceessess. EEach reprresennts aa “trransmmitteer oppporttunitty,”
22、wherre sttrateegic messsagess aree connveyeed annd bbehavvior is aalignned wwith goalls.3. Alignning and diffferenntiatting rewaards.Leadders mustt makke suure rrewarrds eencouuragee behhavioors cconsiistennt wiith sstrattegy, whiich ssoundds eaasy bbut iisntt. DDiffeerenttiatiion iis abbout makiing
23、 ssure thatt staars gget ssigniificaantlyy morre thhan ppoor perfformeers. Butt almmost everrywheere mmanaggers disttribuute rrewarrds mmore or lless evennly. As welll seee, llack of eeffecctivee perrformmancee diaaloguue iss a kkey ccontrributtor tto dyysfunnctioonal rewaard sschemmes.We liist tthe
24、see thrree iitemss sepparattely but theyy aree, off couurse, inttercoonneccted. Syystemms annd prrocessses depeend oon cllaritty frrom tthe ttop. Difffereentiaationn andd aliignmeent oof reewardds deependd on manaagerss usiing pperfoormannce ssysteems eeffecctiveely. Diaaloguue iss thee gluue thhat
25、hholdss it all togeetherr. BBut nnot jjust any dialloguee willl doo. IIt muust bbe diialoggue wwith purppose, foccusedd on perfformaance.Link to ccompaany vvaluaationnCompaaniess thaat maanagee perrformmancee welllGeeneraal Ellectrric ccomess to minddhavve hiigherr marrket valuuatioons. Whyy? BBecau
26、use, moree andd morre, iinstiitutiionall invvestoors vview straategyy exeecutiion aas a vitaal faactorr inffluenncingg stoock ppricees.Just a feew yeears ago insttituttionaal innvesttors reliied aalmosst exxclussivelly onn finnanciial mmeasuures for comppany valuuatioons. Now 35% of aa marrket valuu
27、atioon iss inffluennced by nnon-ffinannciall, inntanggiblee facctorss, acccordding to aa stuudy bby Errnst & Yooung. Based on a study conducted by Sarah Mavrinac and Tony Siesfeld for the Ernst & Young Center for Business Innovation. Thhe sttudy showwed tthat “exeecutiion oof coorporrate straategyy”
28、 annd “mmanaggemennt crredibbilitty” rrankeed nuumberr onee andd nummber two in iimporrtancce too insstituutionnal iinvesstorss outt of 22 nnon-ffinannciall meaasurees. Johnn Incch, aa mannaginng diirecttor aand aanalyyst aat Beear SStearrns nnotess thaat inn somme seectorrs, ssuch as ddiverrsifiied
29、 iindusstriaal coompannies, inttangiibless acccountt forr eveen mooreuup too hallf a comppanys vaalue. “YYou ccan ttake evenn a mmundaane aassett andd injject goodd mannagemment and havee sommethiing pprettty sttrongg,” ssays Inchh. 1. Acchievve Raadicaal Cllaritty byy deccodinng sttrateegy aat thhe
30、 toopThe ffirstt steep inn succcesssfullly exxecutting straategyy is achiievinng cllaritty onn thee topp teaam, wwhichh is freqquenttly tthe ssourcce off garrbledd siggnalss. Lack of CClariity aat thhe ToopA reccent Hay Grouup sttudy Hay Group partnered with Richard Hackman of Harvard University and
31、 Ruth Wageman of Dartmouth College to identify the dynamics of top executive teams and their impact on performance. From an initial group of 48 teams, the researchers narrowed their study to 14 teams, many from large global organizations. Each team member represented the head of an organization, a m
32、ajor business division, or a major geography. showws a distturbiing llack of cclariity oon toop teeams (orrganiizatiionall claarityy meaasurees thhe exxtentt to whicch emmployyees undeerstaand wwhat is eexpeccted of tthem and how thosse exxpecttatioons cconneect wwith the orgaanizaationns llargeer g
33、ooals). TThe cchartt bellow sshowss draamatiicallly hiigherr levvels of cclariity oon ouutstaandinng vss. avveragge teeams. Inn facct thhe biiggesst siinglee difffereence betwween greaat annd avveragge toop teeams and typiical oness wass in the leveel off intternaal cllaritty. SSee FFigurre 1.Figurr
34、e 1: Orgganizzatioonal Climmate and Teamms58%18%Figure 1: Measures organizational climate dimensions for outstanding top teams vs. typical ones. For each dimension of climate we asked how the team was performing in reality and how it should be performing. Then we measured the difference or “gap” in
35、their answers. Gaps over 20% hurt performance. The “clarity” gap for typical teams was 58% compared with 18% on outstanding teams. Channge HHay/MMcBerr to “Souurce: Hayy Grooup, Inc.” inn finnal vversiionAnd aa Lacck off Claarityy BellowWorkeers aat loower leveels sstronngly feell thiis laack oof cl
36、laritty. Figuure 22 loooks aat saatisffactiion llevells foor woorkerrs pllanniing tto leeave theiir orrganiizatiions withhin ttwo yyearss verrsus thosse pllanniing tto sttay llongeer. Thiss stuudy sshoweed thhat aa keyy reaason peopple lleavee theeir jjobs is tthat theyy feeel thheir comppaniees laa
37、ck ddirecctionn. EEven amonng emmployyees plannningg to stayy morre thhan ttwo yyearss at theiir coompannies, onlly 577% feelt ttheirr orgganizzatioons hhad aa cleear ssensee of direectioon.Figurre 2: Keyy reaasonss whyy empployeees lleavee theeir ccompaaniess Tottal % Sattisfiied Source: Hay Group,
38、 Inc. The results are from our Employee Attitude Survey, which sampled some 300 companies representing more than 1 million workers. Our survey queried management, professionals, salespeople, information technologists, and clerical and hourly workers. The “gap” referred to in the table is the “satisf
39、action gap” between workers planning to leave within two years and those planning to stay longer.Satissfacttion withh:Emplooyeess plaanninng too staay moore tthan two yearrs (%)Emplooyeess plaanninng too leaave iin leess tthan two yearrs (%)GAP(%)1. Usse off my skillls aand aabiliitiess83%49%34%2. A
40、bbilitty off topp mannagemment74%41%33%3. Coompanny haas cllear sensse off dirrectiion57%27%30%NOTEE; HIIGHLIIGHT SECTTION 3; MMAKE IT PPOP GGRAPHHICALLLYClariity mmatteersWhy ddo emmployyees cravve cllaritty? Thinnk abbout it. Whaat coould be mmore demooraliizingg thaan thhe reealizzatioon thhat yy
41、our hardd worrk iss nott conntribbutinng too oveeralll commpanyy goaals? Emplloyeees waant tto doo thee “riight” thinng, bbut tthey can onlyy do so iif thhey kknow whatt thee rigght tthinggs arre. Unforrtunaatelyy, ass we saw in oour oopeniing vvigneette, commpaniies ooftenn donnt ccommuunicaate sst
42、rattegicc goaals eeffecctiveely. An oil refiineryy cliient, forr exaamplee, seet a straategiic gooal tto cuut coosts. To see how welll thee messsagee hadd gottten throough, an operratioons tteam leadder hheld a sttrateegy ddecodde seessioon whhere he qquizzzed hhis tteam membbers on wwhat theyy fell
43、t waas thhe chhief prioorityy. TTen tteam membbers prodducedd fouur diifferrent “topp” obbjecttivess, inncludding costt-cutttingg, saafetyy, ennviroonmenntal comppliannce aand rreduccing salees prrocesssingg timme. The messsage hadnnt ggot tthrouugh. Thee teaam leeaderr callled his teamm toggetheer
44、annd crreateed a “traansmiitterr oppportuunityy.” “Dont yoou guuys rrealiize tthat if wwe caant cut our refiiningg cossts bby thhree centts a galllon, theyyre goinng too shuut uss dowwn?” he ssaid.“Is tthat all you needd us to ddo?” repllied the teamm memmberss, taaken abacck. UUniteed byy a cclearr
45、 dirrectiion aand sshareed owwnersship of tthe ccausee, teeam mmembeers eenthuusiassticaally cut costts byy fivve ceents per galllon oover the folllowinng yeear wwhilee conntinuuing to mmainttain goodd saffety and enviironmmentaal reecordds.Narroowingg priiorittiesHavinng tooo maany ppriorritiees ca
46、an leead tto laack oof cllaritty. AerooMexiico, for exammple, hadd worrked withh a sstrattegy conssultiing ffirm thatt delliverred aa 2499-pagge reeportt lisstingg keyy perrformmancee inddicattors (KPIIs) ffor mmeasuuringg proogresss byy thee entterprrise. Thhe goood nnews was thatt thee KPIIs gaave
47、 tthe ttop tteam metrrics for meassurinng suuccesss. The bad newss wass thaat thhere weree 1000 of themm, annd thhey wwerennt ppriorritizzed. “It was cleaar thhat eexecuutionn wouuld ssuffeer unnlesss we idenntifiied tthe mmost impoortannt onnes, sayss AerroMexxico CEO Artuuro BBarahhona. “SSo wee disscusssed wwhichh onees coonne