By now, most of us have read about organizations that attempted to improve their performance by deploying dashboards populated with financial and operational metrics only to discover that managing by numbers alone didn’t improve their performance. Instead, organizations must go beyond keeping score to ensure that everyone has a common understanding of both what they are trying to accomplish (goals and objectives) and how they intend to accomplish them (programs and initiatives). An organization that aligns goals, initiatives, and metrics increases internal and external transparency, becomes more productive, and can respond to performance issues and market changes more quickly. They become an alignment focused organization.
To become an alignment focused organization, you must motivate employees with integrated and cascaded objectives, manage priorities based on impacts rather than perceived urgency, monitor progress towards outcomes, and measure both operational and financial performance.
While most organizations have developed objectives and many have formalized them into a strategic plan, too often, only the goals’ authors understand exactly what they mean, while others rarely understand how the goals should impact day-to-day activities. Consequently, goals become empty visionary platitudes and don’t motivate all stakeholders. Without proper motivation, stakeholders often operate with disparate agendas and are less effective. To advance performance, organizations must transform goal development from its current isolation in the planning office to an exercise that involves more stakeholders and is more interactive, more frequent, and more explicitly tied to organizational operations.
Once an alignment-focused organization has decided where it wants to go, it must manage priorities to ensure day-to-day execution supports objectives. In most organizations, there is no explicit link from each project to a specific goal; consequently, it is difficult to prioritize between projects that compete for resources. As a result, priority is given to projects with the most political capital or those that are the furthest behind schedule, rather than to projects with the highest impact.
Organizations must move from simply tracking project resources and activities to collaborating on cross-departmental milestones and dependencies. Rather than optimizing their current processes to be more efficient (i.e., “do the work right”) they should consider which projects justify the most emphasis to become more effective (i.e., “do the right work”).
The alignment-focused organization monitors progress on a regular basis by systematically alerting stakeholders to performance anomalies. Stakeholders can then react quickly to problems, identify where things are broken, and correct issues in a timely manner. Conversely, monitoring helps stakeholders identify what is working particularly well in one area and propagate these methods to other groups, contributing to more effective advancement of its goals across the organization.
For successful monitoring, organizations must translate strategy into quantifiable terms and establish target achievements in advance. Even “soft,” or intangible, objectives should be monitored. Without quantified goals, it is difficult for an organization to have a consistent view of its performance and to know where to focus its attention to improve performance.
Through careful monitoring of its goals, an organization can focus its efforts of measuring performance on those metrics that have the greatest potential impact. By adding context to each key performance indicator that explains what they are, how they’re calculated, and how they’re to be used, the alignment-focused organization avoids the resource drain and potential confusion caused by most metrics dashboards. Key performance indicators easily show trends of time and allow organizations to benchmark themselves against others.
An alignment-focused organization provides a shared frame of reference for all employees and empowers them to effectively contribute to organizational objectives. Following the 4M’s of alignment (motivate, manage, monitor, and measure) allows an organization to drive functional and individual accountability and provide transparency across different business units. Only by ensuring alignment of its day-to-day operations with its overall strategy can an organization hope to effectively execute.