Just as ships must chart their position before undertaking an ocean voyage, businesses must measure their position before knowing their direction. The challenge is to find the right tools to measure the organisation’s ‘voyage’.
The fallacy of measurement is that it is not the end but the means to a new beginning. Measurement is common in manufacturing but it has taken a bad rap in other areas of business being seen as a precursor to layoffs. Businesses however need measurement to sustain the changing tides of economy, global competitiveness and rapid technological advancements.
Corporations of any size can fail but the most significant cause of failure is not strategy, but the incapacity to execute a balanced strategy that takes into account the following:
- Monitoring: The art and science of observing employee behaviour and coaching
- Measurement: The art and science of gauging, using numbers and metrics, performance to a task
- Managing: The art and science of motivating, coaching and enabling individuals, teams in achieving the objective
- Direction Setting: The art and science of discovering strategic directions that are unique and differentiating in the market, communicate this to all levels in a form that they can identify and correlate their daily activities to the strategic goal.
Unless a business is able to translate strategy to actionable and measurable objectives that can be executed at all levels of the organisation, it would become increasingly difficult to maintain the edge, remain competitive and attain sustainable growth.
Management is acyclic behaviour. It is the art knowing what to deploy in both good times and rough ones. Scrambling for answers when the chips are down or when a charismatic CEO quits, is a clear indication that the business failed in aspects of managing and direction setting even while they might have been monitoring and measuring.
The major causes of such a paradox are:
- Mistakenly viewing strategy as operational effectiveness
- Mistakenly assuming that strategy and actions in the organisation are always aligned
Often the root cause of the paradox is strategy formulation with little or no regard to the strength and weaknesses in capability and competence existing within the organization. Rather than creating a blind strategy, it would be prudent for businesses to first create the capability, competence and capacity for change and then take on the challenge of strategy formulation when the right operational framework is in place to execute the strategy.
Pushed by the economic drivers and market forces, businesses try to do this backwards. A blind strategy is formulated and then there is the rush to create the operational framework to execute the strategy. It is not unusual then to find that the organisation neither has the capability nor the competence to achieve the strategic objectives and thus ensues the act of hiring and firing as there is no time left now to assess, train and build capability with the existing human resources.
The strength of a resilient organization comes from the ability to change it’s strategic thrust and reflect it in actions and corresponding performance measures. They are able to connect strategy, strategic thrust and actions in a seamless complimentary manner. The strategic themes that any market leader looks for are operational excellence, product leadership and customer intimacy. What is most significant in being resilient is for the organization to build capabilities, have the capacity for change and the ability to institutionalise and operationalise the activities that would drive the strategic theme.
The sole factor that determines strength of an organization are the human resource management practices that build capability, constantly strive to add value to the human capital, build the right operational framework and most importantly, build capacity for change. Status quo is the most preferred state. The only way there can be a shift in status quo is when the senior leadership commits to and aligns itself to the strategic theme. Strategy formulation is still a lesser challenge in comparison to the challenge of creating the operational framework for execution of strategy.
Any attempt to create the operational framework, which requires capability building through development of people and thereby building capacity for change, is destined to fail if the senior leadership itself is unable to break status quo, unlearn and relearn and commit completely to the cause of the strategic thrust. ‘Managing’ and ‘Direction Setting’ would most likely never happen without such a commitment.