Skills SoccerTraditionally, skill development in organizations is approached as a program of activities designed to increase individual capability. The effort is typically led by HR learning and development professionals, the content is shaped by conducting training needs analysis, with the desired outcome being a measurable improvement in the targeted skills.

This traditional approach addresses the question of how to design and deliver suitable training programs to develop people. It encourages employees to think about what training do I need to complete in order to advance my career? The challenge with this approach is that it is centred on the individual needs rather than the organizational goals; it typically fails to develop and leverage skills to accelerate transformation.

Instead of this old world formula, what if we approached skills as a critical lever in the transformation agenda? This new paradigm would start with senior leaders answering the question what skills does the organization need to achieve our aspirations? The identified skills would be those that underpin performance, and any capability gaps that need to be bridged in order to accelerate to the aspiration.

One HR department was at risk of having their entire training budget cut because their CEO was struggling to identify substantial return on training investment. This catalyzed a re-think of their entire approach to skills development. Starting afresh with their customer value proposition and transformation strategy at the core, senior leaders defined the critical skills required by front line staff and leaders in order to execute effectively. The learning and development team then shaped new offerings to develop these critical skills throughout the organization. Within twelve months of implementing the new approach, there was a positive impact on customer advocacy and financial performance.

Delivery of training also needs to modernize; instead of the reliance on formal and classroom delivery, we now have cutting edge research and technologies that enable rapid learning outcomes. Through neuroscience we now know that the individual capacity to learn and grow far exceeds what we previously believed. The science of habit formation, self-directed learning, brain-based science and performance analysis can all be leveraged to maximize the acquisition of critical skills.

It’s time that senior leaders recognise the leverage that skills can bring to their transformation agenda. Leaders must take an active role in partnership with HR to focus their training investment on the gaps that matter. You then have an organization filled with learners, all accelerating in the same direction towards the aspirations.

Systems in alignmentThere are many types of systems in organizations; these include people and performance systems (e.g. recruitment, performance management), management systems (e.g. financial reporting, customer data), and business systems (e.g. resource demand forecasting).

Not surprisingly, it’s the people and performance systems that influence behaviour in our organizations the most. For example, an organization espousing teamwork but with systems that exclusively reward individual achievement will get competition, not collaboration.

Systems are important transmitters of culture, and many companies have systems that perpetuate bureaucracy, not performance. When we measure the extent to which various factors are enabling or inhibiting an organisation’s aspirations, systems score the lowest of all the traditional business levers. Respondents often cite poor systems as a source of widespread frustration and reduced productivity.

Such gaps present an excellent opportunity for leaders and change agents.  Streamlining systems that cause the most frustration for employees results in systems that serve rather than hinder the aspirations.  One client targeted their laborious travel and expense claims processes, freeing up their sales people’s time to focus on their customers.  These improvements translated into feelings of greater autonomy and personal accountability across the sales teams.

How systems are implemented is critical too. Even the very best systems are useless unless consistently applied by leaders.  One HR team which had developed a world-class performance management system was disappointed with the poor uptake, until they realised their most senior leaders were paying it lip service. Once leaders gave the process the attention it deserved and role modeled excellent implementation, a disciplined approach to performance management became embedded in their DNA.

Resolving the conflict between your aspirations and your systems creates the alignment you need to accelerate and sustain your transformation effort.

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The perfect structure imageIn most organisations, ‘structure’ means the distribution of power and accountability through formal reporting lines. But what would happen if, starting today, the only way you could get work done in your organisation was through the formal hierarchy? Not much, right?

The search for the ‘perfect’ structure is elusive at best, and can be expensive, demoralising and futile at worst.  All structures have inadequacies that must be managed. And while structure may be seen as a rational extension of the aspirations, the most rational structures usually land in a sea of human emotion, self-interest and irrationality.

With the right values and behaviours, almost any structure can work. People work around the formal hierarchy all the time to get things done. For example, if you observe the aftermath of any natural disaster, you will typically see human beings purposefully organising well ahead of any official relief agency response.

The most powerful structures within your organisation are almost certainly informal networks and personal relationships; these are the primary structures that enable information to flow and work to get done.

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Business Scorecard Blog ImageIs your business scorecard something that people pay attention to once a year to see if they’ll make their bonus?  It could be so much more. A great scorecard well used enables you to:

  • Tell a story of how your leading indicators will produce your lagging outcomes
  • Engage your people, and
  • Align effort – from the boardroom to the front line – every day

In last week’s blog I suggested strategy is a ‘how to’ achieve your aspirations.  Your scorecard builds on the strategy by answering the question ‘how will we know we are on track?’  It defines the most critical objectives –leading indicators like engagement and product quality, and lagging outcomes like customer advocacy and revenue– by which you will measure success.

The scorecard should be owned and driven by the top team. To keep her team laser-focused on their objectives, one CEO I know filters every potential project or initiative with the question, “where does this contribute to our scorecard?”

Implementing the scorecard well requires leaders to drop their personal biases, and think about the whole business in a balanced way.  Indeed, constructively resolving the tensions that surface across metrics can become a powerful enabler of more robust decision making, increased collaboration and innovation.

Building and reviewing your scorecard should not be a once-a-year exercise, but an important part of your governance and communication rhythm.  And when all your employees have a ‘line of sight’ between their goals and critical business objectives, you have the potential to unlock real discretionary effort.

A great scorecard includes everything that leaders believe is critical, nothing that’s not. The challenge is that every leadership team today has an abundance of data at its disposal.  And to quote economist and political scientist Herbert A. Simon, “…a wealth of information creates a poverty of attention.” Your scorecard allows you to agree what’s most important, make choices, and navigate a clear and compelling path through complexity.

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Great strategy no guarantee of successOne statement you will often hear senior leaders make is that “we need to align everyone to the strategy”. The problem with this idea is that strategy is not a ‘where to’; it is a ‘how to’. What we actually need to do is align our strategy to our aspirations. If, for example, we aim to double our footprint, then we better have a pretty aggressive growth strategy.

Great strategy is based on a mix of hard data and rich dialogue amongst leaders: it leverages the experience, insight and intuition of key organizational members. It articulates a clear stakeholder value proposition and produces a manageable number of themes with which to guide the daily focus of everyone in the organization.

Most importantly, great strategy demonstrates courage; it deals directly with any sacred cows and represents a very clear statement of intent. It not only articulates what the organisation will do to achieve the aspirations, but also what it will not do.

That said, having a great strategy is no guarantee of success. It represents just one (albeit important) pathway to your organization’s aspirations. Senior leaders spend enormous amounts of time, energy and consulting dollars on strategy formulation; the underlying premise being that the right strategy provides sustainable competitive advantage. Yet in the age of real-time technology, increasing transparency, and executive mobility, most company strategies are now easily accessible.

What is much more difficult to access or imitate is an organization’s ability to execute their strategy. As expressed by Richard Kovacevich, CEO of Wells Fargo “I could leave our strategic plan on a plane and it wouldn’t make any difference. Our success has nothing to do with planning. It has to do with execution.”

Organization alignment blogTransformation is not a matter of intention. It is a matter of alignment.

Organizational alignment is achieved through 11 levers. You may be familiar with the so called ‘hard’ levers of strategy (focus and tactics), scorecard (metrics), structure (formal and informal), systems (HR, business and information) and skills (capabilities). However, there are also five so-called ‘soft’ levers that are critical for alignment including; standards (shared behaviours), story (communication), strengths (the organization’s existing assets), symbols (leadership time, focus and money) and sustainability (how the change effort sustains itself).

The ‘hard’ alignment levers are like the ‘bricks’ of alignment, while the ‘soft’ levers are like the ‘mortar’. The irony of the ‘hard’ and ‘soft’ labels is that the majority of leaders are very comfortable with strategy, scorecard or structure, but struggle with levers like standards, story or symbols.

The final lever, Leadership Impact, represents the foundation of the alignment approach. My research, documented in Leadership Transformed, has revealed that the impact of leaders is as important as the other ten factors combined. The alignment equation is S10 x L1, where leadership is the accelerant or handbrake on all other alignment efforts.

It is extremely rare to see any change agenda where all 11 levers are in play, and even rarer to see them applied in an integrated way. Over the coming weeks, I will unpack several of the 11 levers in more depth so that you can apply them to your change efforts.

Ducks in alignment (red)The simplest way to increase the odds of a successful change effort is to stop talking about ‘change’ itself. Change is not the goal; the goal is the goal. We are yet to encounter an organisation who aspires to destroy shareholder value, disappoint customers and alienate employees. Most organisations share aspirations which revolve around the universal principles of financial performance, customer satisfaction, employee commitment, product and service excellence, and sustainability.

When stakeholders in an organisation talk about change, what they are saying is that the organisation is not delivering on its articulated aspirations. Not only is change not the goal, but change is not even the process. The concept of ‘change’ carries significant baggage, has limited continuity, and encourages low accountability. The process by which we reach our aspirations is alignment.

Semantically, the definition of ‘alignment’ rests on the underlying concepts of adjustment, adaptation and cooperation. When a leadership team is clearly in alignment, employees in the organisation have confidence that the goals are reachable. Compared to change, alignment is a strong, positive and unemotional concept. Alignment is respectful of the past, it presumes the basic ingredients for success are already present, it allows for clear accountability, and provides a continuous reference point for improvement. In short, alignment is the business of business and the focus of effective leaders who are continually looking for levers that they can pull to reach their aspirations in a constantly changing and uncertain world.

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Trust deposit imageChange efforts in the modern context are typically messy and peppered with mistakes, problems and unmet expectations. In a high-trust environment, leaders will be given the benefit of the doubt and will be able to course correct and move forward. In a low trust environment, the mistakes and problems serve as further evidence for the dire state of the organisation and the incompetence of leaders. One simple mantra for trust is that you cannot communicate your way out of a problem you have behaved yourself into.

So if all change efforts are messy, and trust is a precondition for change, then the challenge for leaders becomes the building of trust. In my experience, trust is comprised of three key components; credibility (do I believe you can do what you or others say you can?), reliability (do you actually do what you say you will?) and intent (what is your underlying motive and how much do you stand to gain?). Leaders who consistently deliver on their promises, who behave in a way which is honest, open and authentic, and who focus on purpose, contribution and legacy, build enduring trust and dedicated followership.

At a more practical level, one of the fastest ways to build trust is to extend more trust than is warranted. Much like a bank account, this means making continual and significant deposits so that when the inevitable problems occur, the resultant withdrawals do not put the account into deficit. This approach can be humbling for many leaders; particularly those who have been raised on a diet of command and control where subordinates are expected to win their trust.

While the building of trust can seem daunting, the rewards are exponential. Stephen Covey summarises the benefits in his simple formula for the economics of trust; low trust equals low speed and high cost, high trust equals high speed and low cost. To verify this formula for yourself, compare two commercial partnerships you are engaged in; one which you would consider high trust versus one that you would categorise as low trust. Now imagine the commercial implications for your organisation if all of your relationships were like the partnership you categorised as high trust!

Trajectory imageIn the throes of uncertainty and chaos, it is natural for leaders to articulate a new agenda; envisioning a better future can serve as an immediate panacea to the pain of the present environment. Before launching off on the new crusade, however, it is critical to understand the injuries people may carry from previous crusades and whether anyone is actually interested in going back into battle.

Equally important is to understand the strengths and assets that can serve as foundations for the future organisation. Many leaders, particularly those trained in the somewhat risk-focused disciplines of accounting, law or engineering, for example, have an over-developed radar for problems, exceptions and imperfections. While this attribute can be very useful, it should be tempered with a focus on what is going well. In fact, many behavioural researchers concur that for an individual to act on one piece of corrective feedback, they must hear three pieces of positive re-enforcement. Interestingly, the ratio is as high as 1:7 in a marriage; which might explain why up to one in two now ends in divorce.

Capturing the hearts and minds of intelligent, battle weary people requires meaningful engagement in the issues and challenges affecting them; no involvement equals no commitment. As a great mentor once told me, people will tolerate the conclusions of their leaders but they will only act upon their own conclusions.

Finally, it is important to understand the ultimate aspirations of the organisation in the context of its departure point or actual state. For example, if my New Year’s aspiration is to lose 20 pounds by executing a strategy of going to the gym five times a week, and my context is that I have not been near a gym in three years, then I am likely to abandon my aspiration within the first week as I struggle to execute this radically different habit. If, on the other hand, I steadily build up to a rigorous gym routine over a period of several months, then I am far more likely to execute my strategy and reach my ultimate aspiration. The lesson for organisations desiring change is that trajectory is far more important than outcome. We must have many ways to win and few ways to fail in the early days of a change effort until our new behaviours become ingrained habits.

If you listen carefully to the language and metaphors used by most leaders to describe their journeys, you will inevitably hear talk of heroic battles and glorious missions on the path to overcoming adversity. But there is little talk of stumbling and fumbling or falling over, and the truth about change is that even the most successful efforts are far more akin to the world of Maxwell Smart than James Bond. Yet at the moment of truth, when faced with an audience of hopeful, demanding and expectant stakeholders, leaders tend to over-hype and over-commit.

My doctoral research revealed that, paradoxically, any attempt to articulate a sustainable approach to change in the modern business environment requires a blend of confidence, humility and a good sense of humour. In effect, this involves taking off the ‘mask’ of perfection in favour of a more humble and authentic disposition. De-masking however, presents a significant challenge for business leaders and change agents alike. Leaders are under constant pressure from shareholders, boards and analysts to confidently forecast and deliver results which are bigger, better and faster than last quarter.

Leaders and change agents can be liberated by dropping the mask, accepting that there is no simple program, that change is necessarily unpredictable, and that everyone will need to learn and grow through the process. This acceptance removes the weight of unrealistic expectations and enables everyone to channel the energy previously spent posturing, pretending and politicking into an authentic dialogue about the commitment and disposition required for an effort which will inevitably be harder, longer and riskier than anyone would like.

It is no coincidence that all totalitarian regimes are devoid of humour; it is very hard to oppress people who can see the funnier side of life. The human capacity to laugh at ourselves and make light of dire circumstances are critical preconditions for successful change; this capacity allows us to retain perspective, let off steam, develop resilience and bounce back from the inevitable set-backs. Humour is most potent in change efforts when deployed by leaders at their own expense. Self-effacing leaders build trust, followership and encourage authentic dialogue by exposing the human frailties that everyone in the organisation already knows they possess.