Sales are at the center of any business, without it, there would be no business. Strategy is the driver for sales; yet, very few organizations understand the importance of a measurable strategy.
Matt, a sales manager, is frustrated over the lack of clarity and direction at the end of corporate meetings. With a tone of sadness, he says, “We all talk on how we need to ‘reduce this’ and ‘increase that’, but when the meeting ends, I can sense that we all feel disconnected—I’m not really sure who is doing what and when.”
Shirley is in the same boat. As a production manager, she knows the top priorities for her department are on-time delivery and quality, but when she is asked that production needs to be more flexible, her reply is, “What do you mean?”
Words such as value-add, customer-centric, exceptional, innovative, engaged, culture, world-class, and countless others are tossed around in the boardroom as if the entire team is in-tune with there meaning.
Try it. Next time the group is together, ask them what ‘being customer-focused’ means to the organization—as a key strategy for any business, you will be surprised at the level of ambiguity and obscurity that exists. Alternatively, ask managers if they know what the year-end, corporate strategy is, and what it means—not surprising, you will receive different answers and competing opinions.
To end the ‘vagueness syndrome’ and lead people in the right direction, we need meaningful analysis and ruthless focus during the strategy design process. Consider these five steps to make strategy measurable:
1. Determine if each department can engineer specific goals and performance measures that help the organization arrive at the year-end corporate targets. In other words, when formulating the corporate strategy, ask the question, “Can we measure the results or output of our activities?” An effective tool to use is a Results Map to view any cause-effect relationships.
2. Evaluate if year-end metrics are universally-tied to all departments, or are they heavily directed at specific managers, such as sales and engineering—not including operations, human resources, or receiving/shipping. An excellent tool to use is a Root-Cause, Fishbone Diagram.
3. Evaluate the goals and performance measures from each department and consider how they relate to each other. Is there any overlap? For example, are there two goals, when combined, form one goal with one performance measure? An excellent tool to use is a Strategy Roadmap or a Strategy Matrix to see if two paths arrive at a same location.
4. Determine if departmental goals are mimicking corporate goals. For example, rather than production chose a goal of customer-centric because the corporate goal is about customer-centricity, the department might reconsider and select: Improve first-pass yields or add prototyping services.
5. Evaluate the amount of planning and effort each strategic target will consume. What empirical evidence do you have that will encourage buy-in? Is the data unbiased and realistic, or does it come from those with strong opinions and high authority who have never stepped foot onto a shop floor?
Bringing performance measure to life requires a team to be highly analytical and unbiased when reviewing trends and interpreting patterns for important market data signals. Reacting blindly to market conditions and events will create waste and chaos, and we should not tolerate in any organization.
When we define performance measures during the corporate strategy design process, we can be confident that our budget allocation invests in the right activities. This approach will erase any ambiguity for Matt and Shirley—they know exactly the daily activities to engage-in because they can visualize the outcomes with precise clarity—they know what they want and they know how to get there.