Strategy Execution-Establishing the Breakthrough Objectives

Strategy Execution – Developing the Vision
October 28, 2019
Strategy Execution – Developing High Level Strategies
November 13, 2019

Strategy Execution-Establishing the Breakthrough Objectives

Planning Stage 3: Establishing Breakthrough Objectives

In this post we will discuss setting focused high-leveraged objectives to work on the vision. There can be more than one each year, but I recommend establishing one to start out.

It is very important that your organization need to focus. The biggest error most organizations make is failing to focus on the high leverage actions that really make a difference in their long-term competitiveness.

To determine where the highest leverage we need to examine and analyze the vision in several ways. A useful first step is to correlate your vision with the way your organization is currently being managed. We will call this correlation daily management. A second step is to get some idea how far the current state is from the envisioned state; in other words, how big is the gap separating the desired future state from current reality.

Correlation With Daily Management

In an earlier post we discussed critical success metrics and the concept of business processes. These are the tools your organization uses every day to manage and measure your ongoing business, and it befits the management team to know how these relate to the vision. You will want to know if the metrics being used to assess the performance of the organization are, or could be, how well the vision is being realized. You also want to know which business processes have an impact on the vision, in order to align improvement efforts.

Performing Your Gap Analysis

Gap analysis can be completed using many methods, but a relatively simple tool is the Radar Chart. It is constructed by placing each element of the vision around the rim of a circle and representing the current state of your organization on a scale of 0 -10. 10 is at the rim of the screen and represents the ideal performance for that vision element.

Analyzing Cause and Effect Relationships

A great tool for analyzing cause and effect relationships is the Interrelationship Digraph (ID). This tool helps your team identify the deep causal issues that are frequently not apparent in the vision. It is constructed by comparing each vision element with every other element and asking the question does element “A” cause or enables element “B” then an arrow is drawn from A to B. Only relatively strong relations are considered, and arrows are only allowed in one direction between two elements. Interpretation of the ID is straightforward. Elements with the highest number of outgoing arrows are primary causes or drivers. Outcome elements are the ones with the most incoming arrows. These elements almost always relate some or all your critical success measures.

Selection of a Vision Element for Strategic Focus

Choosing the most appropriate vision element to focus on requires careful consideration by your management team, supported by the information provided by the vision, gap analysis, ID and correlation matrices.

Determining the Most Effective Breakthrough for your Vision Element

In about a total invested time of three days, your company will have learned a great deal about itself, has set its direction through the creation of the future vision, and even knows where work should start to achieve success. However, the chosen area of focus is till too broad and needs to be more specific.

An effective way to do this is to have your management team revisit the current situation information used to develop the vision and look at the relationship of the selected vision element to the desired improvement in performance and use the Affinity analysis tool to group the breakthrough actions brainstormed by the team. Your team then rank each potential breakthrough by a multi-voting process. The highest ranked breakthrough becomes the objective to focus on.

Metrics

The next important step is to establish metrics for the chosen objective to help determine progress on and completion of the objective in the planned timeframe. In general metrics fall into four classes:

  • Employee metrics, including training, safety, and morale
  • Quality metrics, which are measures of how well a task or strategy was done
  • Cost metrics, which can include cost of plan implementation and ongoing cost of an improved operation
  • Delivery metrics, which are measures of on-time or timely performance and/or capacity

Your management team should select from this list the types of metrics they believe are most important to the success of the objective. More than one metric can be used, and the above list should always be used to validate chosen metrics.

Having selected a suitable metric a numeric goal for the metric must be developed. Some level of analysis is required in order to set appropriate goals if the intent is to achieve true breakthrough. Using facts and data is paramount to understand the current situation and to set goals. The idea is to set aggressive stretch goals that are out of reach of the current set of management practices, so that your organization will be forced to consider innovative new approaches to achieve the goal.

Where do Breakthroughs Come From?

The process of achieving breakthrough performance starts with establishing challenging stretch goals that forces your organization to consider new approaches to doing the task in question. The goal must be seen by your managers and employees as worthy and necessary, or commitment to it will be inadequate and of short duration. The managers setting the goal must be able to demonstrate a clear need or desire to meet the goal, and this is critical for achieving the vision.

Handling the Remaining Vision Elements and Operational Objectives

What of the other vision elements identified in our planning process? The option exists to begin tracking some of the other vision elements through your organization’s Critical Success Measures or process measures.

Operational or daily management objectives can focus on continuous improvement of your business processes to help establish new goals for your critical success measures.

In the next blog post we will discuss developing the high level strategies that support the breakthrough objectives.

Willie Carter is president of Quantum Associates, Inc., an independent process improvement consulting firm that helps organizations produce defect-free products and services with less human effort, less time, less space, less capital and at far less cost.

Leave a Reply

Your email address will not be published. Required fields are marked *