Principle 2: Focus on Achieving Goals (Item 1)
Clear direction allows organizational alignment and a focus on achievement
of goals.
Alternatively: Mutually agreed plans translate organizational direction
into action.
You must establish clearly defined goals (i.e., your definitions of
success).
If you do not know where you want to go – your Goal – getting
there will be only a matter of luck, and you probably will not recognize
it if you do get there.
If you do not focus on what you want, you probably will not achieve
it. The process of focussing brings all your capability to bear on achieving
the Goal.
Different parts of the company going in their own direction or running
their own agenda for their own ends is at best sub-optimum and is usually
destructive.
Principle 2 is extremely important. It is the best predictor of an
company's overall managerial capability. Companies that systematically
focus on achieving their Goals do significantly better than those that
do not.
Unfortunately, although it is important for sound management of an
enterprise, it is not done well – even by the best companies. It
is the third largest area of potential improvement.
- You must know what your Goals and objectives are and must have strategies
to achieve them – and be implementing those strategies.
- Each department, division, section and person must know the part
they are required to play to achieve the company's Goals.
- Alignment and constancy of purpose is crucial. Everyone must be
working towards the same Goals using mutually agreed strategies and
in line with company values.
Providing direction is a crucial phpect of leadership.
It is difficult to over-emphasize the importance of this role. People
expect their leaders to be forward looking – to set direction –
to paint pictures of the future. However, it is not as easy as it sounds.
Firstly, bosses suffer from credibility problems – bosses are
not trusted. The extent people will believe in and take on your vision
will depend on your credibility – your honesty and integrity –
the extent you are trusted. Even if you can get over that, there are
other pitfalls waiting.
Setting direction requires you to do much more than write down the
company's purpose (Mission), direction (Vision), milestones (key goals)
and values (beliefs). It goes way beyond the old paradigm of the boss
writing it down and sending out a corporate plan or a memo or even giving
a few speeches about it.
Cognitive psychologists tell us that we unconsciously move towards what we envisage.
If we can see ourselves doing it, we will do it. If we cannot see it,
we do not do it. If we cannot see ourselves doing it, we will not do
it. Or we will not do it willingly. People may go so far as to sabotage
ideas they do not believe in. Usually the sabotage is unconscious, but
it may be very deliberate.
This is about comfort zones. You remain where you are comfortable.
You do things you have done before. You mix with the same friends, go
to the same places for holidays – places where you are comfortable.
It is also about our picture of `truth'. Each of us acts, thinks and
works, in accordance with the truth as we believe it to be. Only when
I change my `truth' (the way I think) can I change the way I act. If
you don't think something is possible, you will not try to do it. If
you don't think it is possible, you won't set it as a goal. If it is
not your goal, but your boss's goal and you cannot see it, you cannot
begin to move towards it.
The leader's ability to have his or her followers see themselves doing
the vision is crucial. That is what setting direction in the new paradigm
means. The old paradigm had the `leader' describing the future or issuing
instructions and expecting everyone to follow. It does not work. It
never did.
You will have heard of people `owning' the vision. Even that is not
right. They have to see themselves doing the vision. Then it will happen.
"Do you bungy jump? It is very safe and great fun. I can see you
doing it. You will enjoy it." Do these words make you see yourself
bungy jumping? Just because someone has tried to talk you into doing
it does not make you want to race out and do it. It has to become your
vision of what you are and what you do. If we push you towards what
is in effect our vision (you doing the bungy jumping), you will automatically
push back. You will find a thousand excuses for not bungy jumping. You
will sabotage our vision.
Could we bribe you into it with an incentive scheme? "You carry
out my vision and you will get this reward." Would you bungy jump
if we paid you enough? Would you be an enthusiastic bungy jumper if
we paid you enough? We doubt it – maybe a few jumps, not the enthusiasm
nor the resourcefulness, not the willing commitment. What does this
mean for most incentive schemes? Will they buy people's belief in the
vision? We doubt it!
Your five year old is about to go to pre-school. What if you told your
five year old nothing about pre-school. Then on the first day, you grabbed
her and threw her in the car, took her to school and dumped her off.
As you drive off, you shout out of the window "Have a nice day".
Do we have one very frightened little kid?
Don't you do exactly that to your employees when you throw them into
your vision without any preparation or support?
What should you do for your five year old? For weeks in advance talk
about what pre-school will be like. Help the five year old picture it.
Your job as leader is to paint the pictures of the future.
Should you be telling your five year old about how much they will enjoy
college? Of course not, it is too far away.
Your job as leader is to prepare the way for the next stage.
You have to Inspire
You have to make the vision theirs and something they want to do and
can see themselves doing.
Set the goal so it is just out of reach. Close enough so that it is
believable. Far enough so that you can't do it yet – so that there
is a challenge.
Should you know how to achieve an objective when you set it? No and
yes. If it is a very useful vision, it may not be possible to see how
to get there. In fact, only after we have set the goal do we allow ourselves
to gather any information that would allow us to meet that goal. Before
that, there has been no need to gather the information. It might have
been all around you but you did not need it so you ignored it. For example,
when you are buying new tires for your car (a goal) you suddenly have
to find tire dealers, prices, the best deal. All of that was there before
you looked. It is always there. A goal is a declaration of significance
- now information can get through. The goal comes first - then you see.
If you can see how to get there, the vision may be too close.
However, do not set the goal too far out. When you are setting the
vision, make it just out of reach or no one will not be able to see
it.
Stretch goals are OK. However, people need a map with the stages marked
out. Not knowing how to get to the next stage is OK so long as they
can see the stage.
The Goal of an company is to make money now and in the future.
There are three necessary conditions for success in reaching your Goal:
- Provide a secure and satisfying environment for employees now as
well as in the future.
- Provide satisfaction to the market now and in the future. (This
condition comes from the idea that the market punishes companies that
do not satisfy the market perception of value.)
- Provide value to the community now and in the future. (This is Principle
9 – the community punishes companies it considers are not good
corporate citizens and takes away there right to operate.)
In the private sector, the Goal of the company is to make
money now and in the future.
Many companies appear to be confused about this. Many companies behave
as though the Goal were cost reduction, or improvement, or technology,
or customer satisfaction, or looking after employees. Important as those
are, they are all only strategies. Things you do to get to the Goal.
Or values you hold while working towards the Goal.
In Out of the Crisis, an excellent book Deming gives his 14
points. He lists constancy of purpose first: "Create
constancy of purpose towards improvement of product and service, with
the aim to become competitive and to stay in business, and to provide
jobs". In this statement, Deming defines the most important
strategies towards achieving the Goal of all companies – to stay
in business and provide jobs. Goldratt comes to the same conclusion
in Its Not Luck. In order to stay in business, most companies
have to make money now and in the future.
The `necessary conditions' bring together all of the major stakeholder
groups – shareholders, company, employees, customers and community.
By `necessary conditions' we mean you are not allowed to violate them
– ever! There are no conflicts between the necessary conditions
or with the Goal. They complement each other.
However, there are modes of operating that conflict with one or more
of them. Those old modes of operating – old thinking – are
not sustainable.
The new paradigm is that you need the approval, willing compliance
and enthusiasm of your customers (Principle 3), employees (Principle
7) and community (Principle 9) in order to fulfill your Goal and make
money.
Notice that the first `necessary condition' carries considerable responsibility
to not lay people off. This is very similar to Deming's constancy of
purpose statement. That is, you should not consider lay offs as a way
to see you through a period of poor cash flow. That solution leads to
a vicious cycle of lay offs, which do not ever seem to improve profits.
Whichever of the four you personally think is your Goal, the other
three become the necessary conditions. However, you must be clear about
which is which; and recognize that necessary means "necessary",
and Goal means "Goal".
- Set direction.
- Understand where you are and where you want to go to.
- Position the company and its people for the future.
- Establish and meet stakeholder needs.
- Assess and manage the risk of not reaching the Goals and objectives.
- Foresee and plan to overcome barriers and obstacles.
- Generate and coalesce opinion.
- Align – so that everyone is working in the same direction.
Not every company has "make money" as its Goal. Many not-for-profit
companies would argue that they are there to help the world. In these
companies, helping the world is the Goal. Making money so they can exist
to help the world in the long term is a necessary strategy to achieve
the Goal. I.e., one of the `necessary conditions' above has swapped
with the `making money' Goal.
For example, in the public sector, the Goal is usually more societal
based. For example, Police will be about `making the community safer';
Health will be about `making the community healthier'. The Goal for
them is seldom about making money. (If the government agency does have
a Goal of making money (e.g. a power utility), it may be an indication
that the agency is in the wrong sector and should possibly be privatized.)
Footnotes
This material is from concepts
gathered and presented by Lou Tice founder of The Pacific Institute.
See our recommended
reading list.
This discussion is from the
concept presented by Goldratt in The Goal, an excellent book.
See our recommended
reading list.
|