Ensuring that the strategy is rigorously translated into performance objectives that are actively managed throughout the organization

A disciplined performance management process is essential to ensure that key elements of the strategic plan are being properly implemented. I have described below a codified performance management process to support the execution of your strategic plan. While not original or foolproof, it does provide specific and detailed guidance on actively managing (not macro or micro managing) your team to ensure that the performance objectives that directly support meeting your strategic agenda are receiving top priority. It is a systematic process for monitoring, evaluating, ensuring and communicating the performance of each organizational unit of your organization. Properly executing each of these steps is critical to success but is easier said than done. Each step has its share of pitfalls that doom many strategies which is why over 70& of all strategies don’t meet expectations. We will point out some of the pitfalls to avoid in this and future STILE points.

The Performance Management Process consists of five distinct steps outlined in Figure 1.

Developing annual institutional objectives that ensure meeting your strategic thrusts

The first step in the performance management process is to list your strategic thrusts in your market, product, resource, regulatory, and stakeholder strategies and brainstorm the critical success factors needed for each thrust. You can then develop specific actionable objectives for each strategic thrust that must be met to achieve success. As mentioned previously, this is not an easy exercise. There are many objectives that would contribute to each of the strategic thrusts but wouldn’t guarantee success. You must identify and focus on the critical few which ensure the success of each thrust area otherwise, you will get bogged down in too many objectives and deceive yourself that you are making more progress than you are.

As a way of illustration, during a strategic planning exercise for one of our clients we conducted a customer survey and identified a general dissatisfaction with level of engagement and service being provided by our client’s technical project managers. This was viewed as a serious threat not only to the current business, but future business growth, As a result, we identified “becoming more customer focused” as an important strategic thrust in the strategic planning process. After considerable brainstorming, we determined that:

  • The organization had hundreds of clients/year that were all treated exactly the same
  • Several of the clients were mission critical while many were opportunistic
  • Project managers were overwhelmed by the number of projects managed
  • Clients were treated as funding sources for internally generated ideas with little consideration for client needs.
  • Project managers from different departments were unaware of projects being conducted from other parts of the organization
  • There was no systematic external feedback on project performance

We determined that the critical success factors for this strategic thrust, becoming more “customer focused” were to identify the mission critical client base; develop and implement a client engagement process for that client base, dedicate management time and resources, and measure improvement through continuous client feedback. For each research department, institutional objectives included

  • Develop meaningful evaluation criteria to down select mission critical, or “key” clients
  • Establish a key client list based on the evaluation criteria and communicate it throughout the organization
  • Conduct an annual client visit by senior management to listen to client needs and concerns.
  • Develop a client strategy based on feedback from the annual client engagement
  • Assign a key client relationship manager to continuously manage the client relationship and obtain monthly client feedback
  • Develop a client satisfaction survey and conduct the survey after every project
  • Document “lessons learned” from every project
  • Conduct follow up meetings with clients on areas of concern

Although these institutional objectives would require a major amount of time, they were essential to ensure that the strategic thrust would have a successful outcome for selected, mission critical customers.

The feedback obtained from key clients contained an operational element; how well are we performing currently, as well as a strategic element; what could we be doing to support you in the future? Every organization faces both operational and strategic issues during its strategic planning.

Operational performance management focuses on meeting current commitments to owners/stockholders, clients, and stakeholders as well as improving operational efficiency, effectiveness and timeliness. The goal is to maintain and grow the current business and is present-oriented with institutional objectives measured daily and monthly.

Strategic performance management focuses on strategic objectives that build the organization’s future and achieve its vision listed in the strategic plan by developing new products and expanding into new markets, thereby growing, reputation and commercial income. By its nature, strategic performance management is future-oriented with institutional objectives that are measured over several years.

Another example of a strategic thrust that was developed for a technology-based consulting and contract research organization was to “become the employer of choice for scientists and engineers”. We recognized that a critical success factor in growing a technology-based business was to attract, recruit and hire the best and the brightest technical talent in their respective fields who could provide the thought leadership and technical skills to compete in a highly competitive consulting market.

We brainstormed the critical success factors that would aid in our recruiting efforts and determined that to be the best place for scientists and engineers to work we would need to start from within. When asked what is it like to work in our organization, we wanted our senior technical staff to give a glowing recommendation. In a tight knit technical community, when being recruited, we believed that input from colleagues plays an important role in the decision-making process. We surveyed our senior staff and not surprisingly came up with the following suggestions for the ideal workplace:

  • Challenging technical assignments and difficult problems to solve
  • A high degree of autonomy and lack of bureaucracy
  • A reward and recognition system based on merit
  • Supportive management team that listened and learned
  • A collegial atmosphere and fun place to work

We felt that these suggestions were a good place to start and needed to translate them into actionable institutional objectives. Once again, we focused not on easy objectives, but ones that we felt would be critical to ensuring success at become the best place for scientists and engineers to work.

  • Establish bidding criteria that eliminated projects of a routine nature and focus on challenging technical assignments
  • Developed a three-stage career ladder of equal stature and compensation that afforded options for technical staff in technical leadership, project management leadership, and general management leadership.
  • Implemented a reward system, that was merit based and emphasized the ability to sell technical projects, manage projects, or manage people.
  • Conduct an annual satisfaction survey and develop improvement goals for any survey item lower than 7 out of 10.
  • Establish an annual reward and recognition program (our version of the Oscars) overseen by peers and including multiple categories.
  • Hold an annual company Oscar party attended by spouses in recognition of outstanding performance.

We were highly successful in recruiting top talent to our organization we believe due to the steps we took to achieve the critical success factors for becoming the employer of choice in our field. An important lesson-learned was to recognize that the most important factors were the type of work assignments that challenged our senior technical staff and the degree of independence they had to execute their project work including budget control. Next, the reward system and compensation needed to be merit based and widely recognized as fair. And finally, the parties and trophies that publically recognized accomplishments were “icing on the cake”. Napoleon once said that “the most important lesson I learned in military school was that men are willing to die for medals”.

Once you have identified the critical performance objectives in step one, the next step is to determine how to measure whether or not you are meeting them which is the subject of the next STILE Point.