Setting the Strategy Is Just the Beginning

Setting the Strategy Is Just the Beginning

by Ladan Nikravan | Chief Learning Officer

The execution of strategy is dependent upon executives and team members on the front line being clear about the organization's priorities and how they must act to achieve the stated objectives. To be successful leaders, executives need to be as diligent in guiding strategy execution as they are at setting and communicating strategic direction.

"The classic pitfall in executing any kind of strategy is not properly engaging your leadership and broader employee population on what it is that you want them to do," said Rommin Adl, executive vice president at BTS, a strategy implementation consultancy. "Lack of alignment, mindset and capability are leading barriers to effective execution. It is very straightforward: If your organization doesn't get what you want them to do, [is] not passionate about doing it, and [does] not have the proper skills to execute, chances are your strategy is dead in the water."

Despite the great amount of time and energy that goes into such strategy development, many companies have little to show for their efforts. Research by consultancy Marakon Associates has found that on average organizations only deliver 63 percent of the financial performance their strategies promise.

A 2007 study by OnPoint Consulting on the gap between strategy and execution reported that 49 percent of leaders surveyed perceived a gap between their strategies and execution. Of this group, 64 percent did not have full confidence that their company would be able to close the gap.

"A good strategy includes proximate objectives whose accomplishment lie within the organization's capabilities," said Richard Rumelt, author of Good Strategy/Bad Strategy. "That by itself is a huge step toward execution. When executives define strategy in terms of financial or other performance measures, the gap between these goals and their accomplishments is really a failure of strategy. However, it's often blamed on execution." Successfully achieving execution takes more than clarifying and communicating the organization's strategic direction. A good business strategy also addresses problems and challenges.

"Too many so-called strategies are all hope and forward-looking projections," Rumelt said. "A strategy acknowledges the frictions and difficulties. It is those difficulties [that] shape it."

He added that a good strategy sets priorities as well. "A good strategy addresses the issue of focus or choice," he said. "Many organizations try to ring many bells at once and consequently do not coordinate enough energy on any one bell to actually get a good, solid ring. Good strategy focuses energy on what is critical."

In May, a survey by consultancy Aon Hewitt of 1,328 employers nationwide reported 56 percent of respondents indicating leaders play a vital role in meeting business goals and profitability targets and delivering service. Forty-four percent said they play a vital role in retaining talent. However, only 12 percent of respondents said their leaders are extremely effective at meeting business goals. Further, the survey discovered that almost half of the leaders surveyed do perceive a gap between their organizations' ability to develop and communicate sound strategies and their ability to implement those strategies.

The leader's job is to create the vision for the enterprise in a way that will engage its people's imagination and energies. This gap is a hindrance to business performance, and the solution is additional learning.

Seventy one percent of respondents in a recent survey conducted by BTS and business association The Conference Board considered the biggest threats to strategy execution to be lack of understanding, commitment and skills.

According to BTS' Adl, the way to build these skills is through learning initiatives that allow leaders to test the strategy implementation via hands-on experience.

"Through immersion in a risk-free environment, leaders can practice executing the company's new strategy, make mistakes and gain firsthand experience in what superior execution looks and feels like," Adl said. "The outcome is powerful alignment, ownership, motivation and confidence to make the strategy happen back on the job. Traditional event-based learning programs do not provide the opportunity to practice strategy execution, especially compared with applied experiential learning programs, but there may be an opportunity among learning and development practitioners to improve their business acumen and become better partners to senior executives in the strategy execution process."

[About the Author: Ladan Nikravan is an associate editor of Chief Learning Officer magazine.]

The Science of 360s

The Science of 360s

by Marc Effron | Talent Management

As talent professionals, we faithfully believe that 360 feedback will help managers change their behaviors or at least increase their motivation to change. Unfortunately, those expectations are completely unrealistic. To actually get great results from 360s, we need to focus on what science says works and forget most of what we believe is true, including:

Feedback does not lead to change. Many HR professionals believe that simply receiving feedback causes sustained behavior change, but there is no science that supports it. Research says feedback often creates negative emotional reactions that inhibit change and, in one-third of cases, actually worsens performance.

Gaps between self-perceptions and others' perceptions do not motivate change. Many of us believe that when confronted with a gap between how we see ourselves and how others see us, we will try to close that gap. While this is an intuitive model of human behavior, it's not supported by science.

Research says that when confronted with that perception gap, we will diligently try to excuse it or explain its cause. We aren't resisting feedback; we're experiencing what's called cognitive dissonance. Our mind works hard to preserve our carefully developed self-image. When feedback conflicts with that image or could cast us in a negative light, the natural reaction is to reject it.

Most of us chronically overrate our capabilities, which means cognitive dissonance only increases when we see our self-ratings compared to others'.

Comparison to norms isn't helpful. Data comparing you to other 360 participants don't provide guidance or motivation for change. If you score below others, cognitive dissonance inhibits action. When our ratings compare favorably to norms, we don't experience any positive emotions; we simply don't experience any negative ones. The science is clear: We respond best when given information about only our behaviors, not when those behaviors are compared to others.

More information is not more helpful. Typical 360 reports have more than 50 pages filled with charts, graphs, norms, bars, icons and comments. It's nearly impossible for someone to tell what they should do and how they should do it.

Research says that how we experience feedback predicts how much we'll change. A 360 that challenges us with negative feedback or overwhelms us with information creates a barrier to change.

To make 360s work, we need to find the simplest science-based way to help managers change their behaviors. And because processes alone don't ensure successful outcomes, we need to establish clear accountability for results and make the process transparent.

1. Focus on the vital few:

Help managers quickly understand their two or three priorities for change by clearly stating these in the report's first few pages.

2. Don't rate them; tell them how to change:

Telling a manager they scored 3.5 out of 5 on strategic thinking leaves them clueless about how to improve. Instead, include direct statements of exactly how to change that behavior.

3. Don't include normative data or self-ratings:

It sounds like heresy, but the science described above is clear. Don't let your curiosity about how you compare to others get in the way of actually changing your behaviors.

4. Use transparency to drive accountability:

A misguided orthodoxy in some HR circles says that we shouldn't consider 360 behavioral data when making personnel decisions, including promotions and assignments. But using that data is actually the most powerful way to drive accountability for change. While managers may ignore HR's requests to behave differently, knowing that their next promotion depends on it creates an entirely different level of commitment.

In those situations, the organizations have known how those managers have behaved for many years. They've been talked about behind closed doors, around the water cooler and have likely already affected organization decisions, but now that they've been recorded on a few sheets of paper, they'll be part of a more fact-based discussion.

Realizing the true potential of 360 feedback requires doing less, not more. If we focus on the core science and make the process easy for managers to use, we'll finally get the return on investment that we know is possible.

[About the Author: Marc Effron is president of The Talent Strategy Group and author of One Page Talent Management.]

Lies About Learning

Lies About Learning

by Edward Trolley | Chief Learning Officer

In 2006, I joined a group of esteemed industry experts who collaborated with the American Society for Training & Development (ASTD) to publish a book about corporate learning. In it, we explained common lies regarding learning and focused specifically on lies around managing the learning function.

In that regard, have any substantial changes happened in the last five years? Not enough, in my opinion. The latest research from NIIT reveals only 12 percent of companies have learning programs driven by business goals and can demonstrate quantifiable business value. It seems the more things change in business, the more things stay the same in the training and learning department.

This brings us to three common lies about corporate learning:

1. Everything is under control.

The investment value equation for most learning programs is broken. Money - as much as $1,000 per employee per year - is going out the door to hire dedicated learning teams and put people in classes. Yet businesses are not seeing the value from these investments. Many seem to think that just because learning is happening, everything is under control, but it's not. Organizations don't have answers to a key set of questions about corporate learning:

a) How much is our organization spending on learning enterprise-wide?

b) Are our learning programs making a difference? If so, how do we know that?

c) What expectations do our customers have of our learning programs?

d) Are our learning programs adequately leveraging our people, processes and technologies?

e) Is our learning portfolio sufficiently addressing how to run the business and advance the strategy?

f) Are we maximizing the amount of time our people spend on activities which add value?

g) Are we as efficient and effective as possible?

h) What are the quantifiable results and outcomes of the work we do?

It is problematic if even one of these questions cannot be answered with certainty, but a majority of organizations have trouble with some or all of them. In the absence of clear, valid answers to these questions, the learning function cannot successfully help business owners create business value and deliver business results.

2. Outsourcing learning is not a good business strategy.

It's common for leaders to think an outsourcing vendor cannot know their business as well as internal employees do. This is a smoke screen thrown up by those who simply don't want to consider outsourcing. I thought the same thing 18 years ago when I faced my first outsourcing project at DuPont, but I learned that my vendor partner was a quick study, and that I really didn't know my business very well.

People also think they will lose control if they outsource. On the contrary, most organizations experience a single point of accountability, improved control and final approval.

3. It's all about learning.

Here's the truth - it's not at all about learning - it's really about results. Good learning that doesn't deliver any business value is pretty much irrelevant. Business executives expect it, but they aren't actually getting that business value, as evidenced by a 2009 research study from the ROI Institute: "96 percent of executives want to see the business impact of learning, yet only 8 percent receive it now; 74 percent of executives want to see ROI data, but only 4 percent have it now."

So, why aren't more learning programs structured to prove the ROI of what they do? It is clear that the practices involved in running a learning program like a business are directly linked to delivering value to an enterprise; it doesn't exist for its own sake. In the latest research NIIT sponsored with Corporate University Xchange (CorpU), five must-dos for learning programs were identified:

1. Run at the speed of business.

2. Be lean and agile.

3. Ensure a laser focus on the business to drive business value.

4. Provide data-driven analytics to prove business value.

5. Drive innovation.

Do these five things and banish the other lies, and you can develop an advantage in the industry by creating some truth for your business.

Here's the truth - it's not at all about learning - it's really about results.

[About the Author: Ed Trolley is the vice president of managed training services for NIIT and co-author of Running Training Like a Business: Delivering Unmistakable Value.]

The Four Ps of High Performance

The Four Ps of High Performance

by Carol Morrison | Human Resource Executive Online

Just as marketers use four Ps for business-marketing strategies -- price, product, place and promotion -- employers can, and should, adopt a different list of Ps to become high-performing organizations.

Is there a business-school graduate who can't recite the four Ps of the marketing mix in their sleep? Price, product, place and promotion remain as relevant today as they've always been, providing the framework that underlies organizational marketing strategies and programming.

But move over, marketing mix. A new survey reveals another set of four Ps -- a "performance mix" that turns up among the winning practices of standout business organizations.

The Seattle-based Institute for Corporate Productivity brings together a fast-growing network of high-performance organizations (defined by their five-year achievements in revenue growth, market share, profitability and customer satisfaction).

Focusing its cutting-edge research on identifying the traits that differentiate those consistently high market performers from their less-successful counterparts, i4cp identified domains that it calls the hallmarks of high-performing companies: strategies, leadership, talent, culture and market focus.

In its 2011 High-Performance Organizations Survey, completed by 914 business leaders from organizations representing companies of varied industries and sizes, i4cp took a deep dive into the domains that characterize high performers.

Responses to questions within each of those defining core elements led to greater insight into top companies and how they function. In fact, the survey, which was conducted in conjunction with Human Resource Executive, revealed interactions among the domains that can be described by four Ps -- a performance mix that high-performing organizations apply:

a) They take a proactive approach.

b) They strive to be predictive.

c) Their cultures are pervasive.

d) They reward performance.

Know Your Customers

Establishing a mutually rewarding and lasting relationship lies at the heart of good customer service and drives satisfaction and retention of those customers. Organizations that consistently perform well take a more assertive approach when it comes to getting to know the consumers of their good and services.

A number of survey inquiries underscore the differences in the ways high-performing organizations regard their customers and examine their needs. When compared with lower performers' responses, significant gaps revealed that the high performers are much more likely to say that they:

a) Organize their internal processes to best meet customer needs,

b) Organize their functions and departments to maximize value to customers,

c) Aspire to be the best providers of value for their customers,

d) Use highly developed strategies to determine customer's expectations, and

e) Communicate customer information internally so that employees can work more effectively.

Demonstrating that they take customer insight to the uppermost reaches of their firms, high performers also differ markedly from lower performers in describing their leaders as having in-depth knowledge of customers. Further, the top companies confirm that customer insights factor into their development of business strategy.

Look to the Future

High-performing organizations look ahead more than lower performers do, and they use predictive data to drive long-term orientations in multiple areas. They inform product and service design with predictive insights in order to meet customer needs over long time periods, and they identify and address future customer needs.

In fact, the survey respondents representing high performers told i4cp that they do a good job of assessing those future needs, and that their firms are committed to innovation and ready to meet new challenges.

The sense of organizations with workforces that are perpetually facing forward and determined to meet the future head-on is almost palpable in the survey results that separate the higher and lower performers. Top companies are far more likely to say they respond well to changes -- those that directly affect the market, as well as the business environment in general.

Further, they see their cultures as being adaptive to market changes, a key trait of a company that is able to look ahead and navigate the volatility of our risk-laden marketplace, making the kind of rapid shifts that turn potential perils into profits.

High-performing companies carry through that penchant for the predictive when it comes to process design, too. They are far more likely to say they craft organizational processes for flexibility, along with efficiency and effectiveness.

Certainly, designing for process flexibility requires prediction and anticipation of changes in technology, customer preferences, supply chains, talent capabilities, market circumstances and the many other factors that shape the business environment.

One Culture for All

What, exactly, is a pervasive culture? As they reviewed the survey data, researchers at i4cp discovered that high market performers differ from less-successful organizations in their answers to questions that, collectively, paint a clear picture: The top firms present the same face internally that they present externally. Their culture is porous. Their values permeate the organization.

Together, these are empowering characteristics because they mean that the brand identity the world sees is consistent with the employee value proposition and the strategies that define and achieve business objectives.

How do we know that high-performing organizations have such pervasive cultures? In the area of market focus, the trait is underscored by high performers' affirmation that their brand "accurately reflects how we operate as an organization." When the topic shifts to strategy, gaps in the responses of higher and lower performers offer even stronger signals. "Our organization's publicly stated philosophy is consistent with its strategy," say the top firms. They are also more likely to describe their strategies as "clear and well thought out."

They rest assured that their employees understand the strategy because it's clearly communicated to all levels of the organization. Further, workers have line-of-sight understanding of the ways strategy affects their individual roles. In a pervasive culture, everyone is on the same page. They know who they are, what they're about and where they're going.

A key facilitator of pervasive cultures is communication, and high performers' responses demonstrate that they get this. Leaders in the top companies deliver specific feedback to their employees, and they make sure it's done in a timely manner. They clearly communicate what the organization's goals are and encourage workers to maximize their productivity.

For their part, employees in high-performing organizations enjoy open communication with the managers and leaders who have decision-making authority. Workers feel free to talk about company policies, spending and strategies. High-performing companies make sure their employees get information they need about customers so that they can do their jobs better.

The top firms also are more likely to keep up with advances in technology, enabling faster and more flexible communication across their organizations and more efficient knowledge management. The powerful result is higher levels of employee engagement, a recognized component of individual and organizational performance.

Reward the Performers

In companies that make their strategies transparent and topics for open and ongoing discussion across all organizational levels, expectations and objectives become clear. Because workers in such high-performing organizations understand the connection between their jobs and business strategies, the behaviors needed to accomplish company objectives are more readily apparent, too. That makes it easier to ensure that workers are rewarded for their positive actions that contribute to organizational performance.

High-performing companies outstrip lower performers in their approaches to performance management, the survey results confirm. Top organizations have good systems in place for gauging workers' performance, and their appraisals are based on objective data instead of managers' judgments. Performance-management processes are consistent across the organization, too. Perhaps most importantly, high market performers go the extra mile and evaluate the quality of their performance appraisals to ensure that the system functions fairly and effectively.

Responses to the survey statement that "our compensation and rewards system supports employee performance" reflected one of the larger gaps noted between high- and low- performing organizations. The top firms understand that reinforcing desired behaviors in both monetary and non-monetary ways can generate powerful results, and they act on that knowledge.

High-performing organizations recognize that employees' capabilities drive performance. Those companies make sure that performance appraisals include plans for workers' development during the near term. They give employees specific goals for learning and skill-building, incorporating their progress toward those objectives into the next appraisal period. The short-term focus keeps development front of mind and ties it to performance.

Not only do the high-performing organizations have strong mechanisms in place to track and improve individual performance, but they also confirm that they track and assess overall organizational performance. That devotion to measurement and dedication to continuous improvement ultimately produce tangible results in revenue generation, profitability, customer satisfaction and market share.

Blending the Elements

The four Ps of the performance mix are not independent elements. Rather, they interact closely. For instance, it's easy to see that developing proficiencies in using predictive data combines effectively with high-performing organizations' keen interest in uncovering and anticipating customers' needs and preferences. The energy and synergy created by each feeding and driving the other makes for a powerful fusion of strategic actions that lead to strong outcomes for companies and customers, alike.

Obviously, some organizations will be better at rewarding performance, while others have more finely honed capabilities in gathering, analyzing and applying predictive data or in aligning rewards with performance. Within and across organizations, there will be fluctuations and differences in what constitutes the "best" blend of the four elements. Organizational values, business objectives, missions, leadership and other factors can shape the degree to which any of the four Ps is emphasized and leveraged at any given time.

But overall, top companies that achieve consistent success in the quest to reach the pinnacle of their industries demonstrate that high performance is driven, in part, by four potent ingredients: a proactive approach to understanding customers, an intense desire to predict and plan for future conditions, a pervasive culture that signals consistent values, and rewards systems that directly support and reinforce performance. Taking command of the four Ps and balancing them to achieve optimal organizational success across the high-performance domains -- of strategy, leadership, talent, culture and market focus -- becomes the challenge that tops leaders' agendas.

[About the Author: Carol Morrison is a senior research analyst with the Seattle-based Institute for Corporate Productivity, specializing in organizational leadership, change, strategy and talent management.]

Doing Competencies Right

Doing Competencies Right

by Marc Effron | Talent Management

The field of talent management faces an interesting challenge. We should be fully equipped to solve any talent issue.

Yet, when corporate executives are surveyed about the state of their company's talent, they're decidedly unhappy. McKinsey, Deloitte and Boston Consulting Group each have found executives disappointed with the quality and depth of their company's talent and its processes to build more. There seems to be a gap between our potential to deliver results and our actual impact.

Bridging that gap is the key to our long-term success, and we have a potentially powerful tool at hand to drive organization success - the behavioral competency model. If well-constructed, it should tell employees which behaviors are essential for corporate success in a simple and emotionally compelling way. Unfortunately, that's an infrequent result. What's not working?

The science behind competencies is extremely thin. Talent practices such as performance management rely on a strong foundation of academic research; competencies do not. Before we start development, we should define what we're trying to accomplish. The purpose of competencies is to ensure employees' behaviors support the business strategy. With that as the objective, we should identify the simplest possible way to achieve it.

Value must outweigh complexity. Managers are willing to use an HR process only if it adds more value to their life than it does complexity. That's why the 12-competency, four-level, five-descriptors-per-level competency model is dead on arrival at most companies. That type of model might add some value, but it completely overwhelms managers, so they ignore it or do the minimum necessary to comply. Maintaining the value/complexity balance is your secret to designing a competency model that really works.

Create an effective competency model. Remember your business goal to ensure that employees' behaviors support the business strategy. Then, do the following:

1. Listen to your senior team.

Interview your top team members using one simple question: Which three behaviors are most critical for our success in the next three to five years?

2. Identify the vital themes.

Review interview data to identify the four or five themes that emerge. Don't frame those themes in HR speak, just capture sentiments as they were expressed. You'll find two or three themes everyone agrees on and two or three more with some group support.

3. Write a short sentence that describes each theme.

Each sentence should capture the behaviors in the theme and also should use the language you use in your company; be intuitive and easily understood; cause an emotional connection to the company; and be applicable across all people practices.

Here is an example: "Hate bureaucracy and the nonsense that goes with it." You read that and instantly you know what that behavior would look like. It causes a positive emotional connection to the company, as long as you hate bureaucracy. It uses the language of your organization. If your goal is to have employees' behaviors support the strategy, sentences like that will provide 90 percent of what you need.

What to Do Next

Integrate into every HR process. Use the power of HR processes to reinforce the new behaviors. They should be part of selection, performance management, training, talent reviews and 360s.

Answer the question "Why should I?" You can hold employees accountable for these behaviors through performance management, talent reviews or 360s. But pick one area and build in consequences for not aligning with the model.

Revise them when the strategy changes. You're trying to align behaviors with the strategy. When the strategy changes, so should the behaviors. The less structure you've built around them, the easier this will be.

What Not to Do Next

Define them by level. These behaviors should apply to employees throughout the organization. Measure the frequency with which someone demonstrates them.

Pay for them. Pay for results, not behaviors that enable results. "Some of the time" might be appropriate for managers and "all of the time" for SVPs.

If you can create this simple, compelling and business-driving competency model, you'll lay a strong foundation for your talent processes and remind your executives of the true value of great talent management.

[About the Author: Marc Effron is president of The Talent Strategy Group and author of One Page Talent Management.]

Global Leadership Development: Why It's Important to Your Business

Global Leadership Development: Why It's Important to Your Business

by Bettina Chang | Talent Management

A recent study by the American Management Association (AMA) showed that global leadership development programs are correlated with success at companies around the world. Competition was the main driver behind these programs, and almost half of the companies surveyed said that they had already implemented such programs or were currently developing them.

The survey included more than 900 organizations, 40 percent of which are headquartered outside the U.S.

"Whether or not you are only located in one country, you're competing all over the world with your products and services," said Sandi Edwards, senior vice president of AMA Corporate Learning Solutions. "[It's important] to have people all over the globe who understand what the [business] is about and how to compete successfully."

These leadership competencies, though not completely different from typical domestic leadership programs, emphasize certain global nuances. Important aspects include branding in other parts of the world, being agile and understanding cultures, and effectively working across cultures and remotely.

To implement an effective global leadership development program, an organization must first set business goals and determine the metrics through which they will be measured. "The most effective global leadership initiatives are tightly linked to the achievement of critical business goals," Edwards said.

Once the business goals are developed, it's imperative for senior-level executives to communicate why being a strong global leader has important business impact on the organization. "That can be stressed most effectively by senior leaders," Edwards said. "[The initiatives] are not successful if there isn't some component of executive sponsorship and senior leadership involvement."

Other ways for senior leaders to be involved are to be a part of the program and to contribute by co-teaching. They must also monitor the metrics to determine the return on investment of the program.

The study showed that organizations with successful programs can expect to see increased revenue, shareholder value and customer satisfaction. These programs also improve the bench strength of an organization. Of the targeted employees who participate in these programs, about 20 to 25 percent are upwardly mobile and able to take on higher positions. After the training, up to 40 percent will have the capability to take on higher positions and more responsibility.

"That's vital to the strength of the organization, to have a healthy leadership pipeline," Edwards said.

As with most leadership programs, global leadership development can increase engagement and retention, especially among high performers at a company.

"Top talent are high-value assets in every organization, there's no doubt about that - and the best performers always have options," Edwards said. "In the companies we studied, correlation was high between those organizations that were high performers and those that had developed and implemented global leadership curriculums."

Another finding was that almost 10 percent of companies said that they open their global leadership programs to everyone in their organization. Edwards said that this was unexpected, since scarce budgets for development programs typically limit the number of employees who are able to participate in them.

For the companies that do limit the employees who enter these programs, they often offer other development opportunities for all employees. Coaching programs, on-the-job learning, job shadowing and rotations can give an individual more exposure to the different parts and people in an organization. An employee's performance during these opportunities may qualify him or her for further development training.

Edwards stressed that while companies can do many things to ensure employees are engaged, there must be a consistent thread of logic that links every development program to competency expectations within the organization.

[About the Author: Bettina Chang is an editorial intern at Talent Management magazine.]