People are hardwired for purpose. While it is easier to focus on all of the “whats” that we do on a day to day basis, we naturally perform at a much higher level when we know “why” we do what do.
When I was at 3M, we had a long time product that was starting to experience some quality issues. The lead engineer pulled together a crossfunctional team to examine what was going on. In our kickoff meeting, it became apparent that many of the operators didn’t know anything about what the product was. Our plant did not package the product and it was identified by a product number, so operators who had been making the product for 10 years or more didn’t really know what it was. So the engineer arranged a product demonstration for the team and showed everyone how it was used. Many operators were surprised because they had seen the product used in public. Before we could make any process improvements and without making any other changes, the product quality improved dramatically.
Many organizational leaders get stuck working in the business and don’t spend enough time working on the business. The result is an organization that works very hard without planning for the future which can ultimately lead to failure.
Great organizations take time regularly to think about who they and what their place might be in the future. They track their progress creating an endless feedback loop that helps steer the company forward proactively. This involves more than just senior management. It involves front line employees throughout the company so that are all rowing in the same direction with a clear purpose and direction.
While the idea of a Mission Statement has been widely adopted by organizational leaders, there is still some quiet skepticism about its impact. Often times, top executives spend hours in a room wordsmithing the perfect Mission statement only to have it forgotten and unknown by employees. Establishing an organizational identity only starts with the creation of Values, Mission, and Vision. This identity really impacts the organization only when the identity is transmitted throughout the organization.
There are thousands of definitions of what Values, Mission, and Vision really are, but I like to keep it simple. Think about your organization as playing a game. Your Mission is a statement of what the game is. Your Values are the rules to the game. Your Vision is what winning the game would look like (something you may never accomplish). It’s not important that employees memorize the specific wording around a Mission or Vision Statement, but it is very important that they feel it and know it and use it to help them make decisions.
Unique Value Proposition (UVP) | Strengths & Weaknesses
Every organization exists within its own paradigm of habits, rituals, processes, and overall culture. Two different organizations making the same product will often operate very differently. It is very important for organizational leaders to understand their own paradigm or what makes them different. This is called a Unique Value Proposition or UVP.
The reason understanding your UVP is important is because it helps you to focus on playing the game that you can best win. Think of a restaurant that has a huge menu that serves a massive variety of foods. They have Mexican, Italian, American, Japanese, Korean, French, and even Guatemalan options. Do you think this is the place to go to get the best Korean food? Probably not. How can they possibly cook all of those things well. The answer is that they probably can’t. Knowing your UVP helps to stay focused.
Sometimes we get a call from a CEO who asks us about our strategic planning. A common story is some version of ‘we did our strategic plan 5 years ago and probably need to update it’. I always ask them how successful the plan was and usually the CEO has to flip through it to remember what they said they were going to do.
Strategic planning is just a part of a successful Planning Cycle. A plan is a one-time creation. It’s an initiative. It works only while you do it, then it’s affect wears off. Great organizations prefer to employ a strategy system. The system is ongoing. It becomes a living thing that helps to guide the organization. It is your Planning Cycle.
Examples of good Planning Cycles include Traction’s EOS System or the Great Game of Business’s High Involvement Planning. Any good Planning Cycle has multiple components including sales forecasting, strategic planning, budgeting, goal setting, and goal tracking. Each component is done with some frequency so that the organization is constantly establishing high level Key Objectives based on its identity and current situation and then applying those Key Objectives to day to day activities within the organization.
Larger organizations can design detailed Planning Cycles where feedback is rolled up from throughout the organization and then Key Objectives are rolled back down for execution. Small organizations can use simpler Planning Cycles. Whatever the size of the organization, all organizations benefit from a good Planning Cycle.
Great Game of Business™
Many employees go to work and are consumed by their day to day tasks with little to no visibility or thought of a bigger picture. Jack Stack, founder of SRC Remanufacturing, saw this problem and invented a solution that he called the Great Game of Business™. The Game is a set of habits that help employees to understand how their jobs impact the success of the organization and then how the success of the organization impacts them. It accomplishes this by teaching the common language that exists in every organization; the financials. Employees become knowledgeable in the detailed financials of the company and how they impact them in their day to day jobs. In turn, the organization agrees to share profit (or growth) with the employees. This gamification of business earns engagement while keeping everyone focused on a brutally unbiased measurement of success.
As part of a series of articles, I am creating an overview of the 5 sets of systems within our Cultural Framework.This Framework helps you keep a high-level perspective on how systems can work together to help you to drive a culture that both empowers and aligns your team.The 5 sets of systems in our Framework include People, Communication, Management, Process, and Strategy.Your Strategy Systems helps every in your organization to know what “winning” looks like.