Keys to Successful Strategy with Michael Stewart of Work Effects
There are a few keys to a successful strategic plan as well as multiple different approaches to tackling the strategic planning process and generating organizational alignment.
During my chat with Michael Stewart of Work Effects, he shared how they align company culture with business strategy. They help organizations leverage trust, inspire their people, and transform their leaders.
Who doesn't want that? You can find out more about Michael and Work effects at: work-effects.com
This interview is part of the "keys to a successful strategic plan" series that will culminate in a book release in March 2017.
The Work Effects four phases of getting alignment in a strategic plan:
Phase I – Define the Culture – Strategy Culture Alignment Workshop
- Create a common and organization-specific definition of culture
- Identify the current and most critical cultural beliefs needed to accomplish the goals
- Create an interdependent team with one voice
- Establish a set of communication tools that address how to think about doing the work, not just what work needs to be completed
Phase II – Discover the Culture – Health + Culture Organizational Assessment and Analysis
- Identify the gaps between current and needed culture for each workgroup in the organization
- Ascertain the workgroups which have the greatest impact
- Pinpoint examples of near perfect alignment
- Establish metrics to track progress and success of the transformation
Phase III – Develop the Culture Change – Workgroup preparation, actions, and buy-in
- Prepare people leaders to become culture ambassadors
- Cascade and translate the strategic goals for each person…demonstrate how each person provides value
- Connect level of cultural alignment to strategic goals
- Address organizational health issues which may create road blocks
- Create short and long-term plans for action to create alignment
Phase IV – Deploy an Aligned Culture – Change Agents, Accountability, Recognition, and Dashboards
- Identify and prepare change agents who can mentor workgroup leaders throughout the journey
- Establish accountability for people leaders for alignment targets
- Establish monthly tracking metrics for key rate of change, people, operational, customer, and financial metrics.
- Create recognition and rewards for workgroups
00:00 Anthony Taylor: Alright, so Anthony Taylor here with SME Strategy and I'm here with Michael Stewart from Work Effects. Mike, how are you doing?
00:08 Michael Stewart: I'm doing very well.
00:09 AT: Excellent, excellent. I appreciate you taking the time to share with me and share with everybody at the SME Strategy about your company and some of your best practices for leading strategy. So first and foremost, do you want to tell us a bit about Work Effects, and what you do, and how you help people?
00:26 MS: Sure. Work Effects is a consulting firm that works both in the HR talent management side as well as in the traditional management consulting side. So we married those two things together, and our focus is on connecting the business strategy and the culture to help execute the strategy much more effectively and increasing the likelihood of success of the strategy.
01:00 AT: Fantastic. And you've been doing this a little while?
01:02 MS: We've been around for 20 years, we were started in 1997. The first years that we were in business, were doing large scale customized solutions for some of the Fortune 300 companies. Our largest client is City Group, where we work with the top 33,000 leaders in 97 countries and 24 languages. Smallest clients are family-owned businesses and we work with non-profits as well.
01:30 AT: Perfect, and everybody has those, the strategy issues, those HR issues, I mean call them issues or call them whatever you wanna call them, but...
01:39 MS: Absolutely. I think there are typically five situations that we find that there is pain in our clients, and those five situations are when there are changes in leadership. And second situation is when there are murders and acquiescence or M&A kinds of things going on, or when they are targeting exponential growth into a 15, 20%, 100% year-over-year growth. The next situation is when there is big market disruptors, there's a new competitor that's come into their space. Or the last one is brain drain, when they have a lot of very tenured folks and they also have fairly high turnover in their new hires. I think underlying all of those situations is that the strategy, or the "what" they used to do really needs to shift and to change, and therefore they need the understanding of how, how do you really think about doing that work also needs to change and get in line with that new strategy.
02:47 AT: Absolutely, my first question would be how do you align strategy and performance in an organization? And then the second question will be how do you develop culture in the organization? So I know those two are tied together, so approach it however you feel appropriate.
03:06 MS: Sure. I think that at the end of the day, it's about having individual contributors understand the what, what it is that they're supposed to do, and how does that connect to the strategy. And as we look at the senior teams and they develop a strategy, how does that translate through the different business units and the functions and front line leaders to the individual? And so I think that's the first and most important component, is how you really understand, from an individual point of how do you contribute value? What is it that you're supposed to do to execute that strategy, what are those goals? I think the second component, which I think is often, or historically been hidden, is the real "how," how do I need to think about doing that work and do we have alignment throughout the organization?
04:01 MS: And we have a slightly different approach to what the how is, I think many people talk about culture on those things that are more of a bad-to-good basis. We have a strong culture, it's a healthy culture, we live out our values, we have good leadership, we treat each other with respect, but I think that's not really the hidden culture, that's the healthy side of an organization. And those things are quite common, they're kind of the same things across each organization. But the real how, the unique ways that an organization does things is this other hidden culture. And so that's why we call that the how, the strategy should be executed. And then the third component really is "how well" the organization is. Are they healthy enough to create that alignment? And so I think from top to bottom, it is about connecting the what and the how and the how well.
05:00 AS: That's awesome, okay perfect. Can you speak a little bit more about driving those things as part of, we talked about the real how and then actually getting people to contribute, but what are some of the things that would get the ball rolling in that? So maybe some of your two or three your best practices that you say, "This is what almost every organization can do to help get the ball rolling," if that is the case.
05:29 MS: Well, I think the first step is getting the senior leaders aligned on the same page in terms of defining the culture that they need to have. What is the unique things that they need to have? And I think those things are much more on a continuum of good-to-good. So for example, should an organization be more service-oriented with the approach of a transactional approach, or a much more of a deep customer intimacy approach. Should they be more like a McDonald's or a five-star restaurant? I think a healthy organization needs to provide service, but trying to attach that to the strategy, how do they start to define the real how? And is that around how decisions are made based on factor intuition? Is that being more externally or internally focused. But really trying to define what is the culture, what is the how? That strategy needs to be accomplished.
06:32 MS: And then it's certainly identifying where is the culture currently at and where are the gaps? Who are the groups? What are the functions? Who are the people who are really most critical for leading the execution of that strategy? What's the 20% of the people and what are those gaps, and how do you start deploying resources? And whether that's management resources, mentoring those folks, whether that's other sort of champions inside that are partnering with those folks to really create that alignment. I think the sort of third part is cascading those views to the front line levels. I think oftentimes when people are trying to implement new strategies, they form a cross-functional team and they come up with what is the new org structure, the technology, or the new policies and procedures.
07:26 MS: But the real execution of strategy happens on that front line and it's about getting those front line leaders to help connect the dots of the what and how do we think about doing the work and the how well. I think that many organizations don't always have the greatest skills of people at those levels. And I think the fourth step is to develop, identify who are those champions internally, typically maybe a 1:4, 1:5 ratio, one champion working with those four or five front line leaders to help them identify, how can they create the alignment? How do they get healthier as a team? How do they define how they think about doing the work and creating the right actions and then sharing those best practices across the organization with the other champions, figuring out what are the obstacles that they're running into, devising the solutions, and then creating some accountability through different tracking of metrics and looking at the rate of change and the key people metrics and the impact to the operations. How many jelly beans are going through the factory? And what's the impact on customers and the key financial components?
08:47 MS: And so creating that dashboard that's reported back to the senior management, that creates that accountability as well as the rewards and recognition. And so really, through those four steps, define what is the culture that you need to execute this strategy. Really discover what is the current culture that you have and the gap. Develop the plan and the skills with the front line leaders, and then deploy those solutions with the culture champions and the metrics that are showing the impact.
09:23 AT: Wow, well, it's just that simple. Right, Michael?
09:27 MS: Well, it's not that simple. But a lot of times, people talk about this kind of work being a whole bunch of extra effort and in other systems and processes, and it really is simple to put the habits into place. And every time somebody is talking about the "what," what needs to get done, either globally in the organization, within a business unit, at a functional level or even just those day-to-day interactions of what needs to get done, it's always following that conversation with how. How do we need to think about doing that work from that cultural perspective? And that's the extra word at the end of the sentence, the extra sentence at the end of a paragraph, the extra paragraph... But it really is about developing those habits throughout the organization so that that is happening on a consistent basis. And so that is the key. That's not easy work, as we know, trying to develop new habits. It's not always the easiest thing, but it can be done and it's not extra work. It really is kind of the work of leading people.
10:35 AT: Yeah, that's excellent. I think, yeah, coming from a place of working with organizations and leading them to the facilitations, so they basically uncovered that first step that there's an issue that they need to sort of resolve or address or work on, and then you can go in and talk about those things. But I think you hit the nail on the head there with developing the habits and putting the processes and the systems into place. So it's not something that you do, it's just part of your DNA, it's part of the way you work, and it's part of the way that, as an organization, you lead people.
11:08 MS: Absolutely. And that's really what embeds the culture and that's what makes it, in some organizations, so difficult to change, because the old way of thinking, the old habits are very entrenched. And again, they're hidden, they're sort of like the molasses that's in the organization, in the way they do things. And so you need to sort of extract that and crystallize that and really define it much more clearly and then you can measure that and then you can speak to, again, what's the unique "how"hat things need to be done in this group and this team to sort of execute the strategy.
11:51 MS: If we look at two people who are on a team and they both have a common goal and one person believes that decisions should be made based on all of the facts, and the numbers, and figures. And the other person believes that the decision should be made based on the history, and the cycles, and the intuition, and experience, there is a fair amount of wasted time, ineffectiveness that happens. And some of the research says that that can be as much as two hours per day, per employee for every employee throughout the entire year. And so when you look at that that can be as much as a 25% wasted efforts and those are the things that sort of kill the ability to quickly execute a strategy. And so by more clearly defining those things, you can create alignment between, again that what, and the how, and the how well, much more quickly in that two to three year cycle rather than a seven to 10 year cycle or at least one generation of employees.
13:00 AT: Absolutely. Perfect. So within the context of all of that, what are some of the risks to avoid as apart of that process? And I think you alluded to it a little bit saying, it can really take a lot of time, but what are some of the risks to avoid as apart of the planning process and getting alignment with culture, and the how, and the why?
13:22 MS: Well, I think some of the biggest risks are one, not having a well-defined strategy. I see many organizations that they have a financial target, but they don't really have a well-defined strategy. And if you don't know what the what is, getting to the how is nearly impossible, so I think that's one of the biggest risks. I think the other risk is assuming that you can install new systems, or change the org structure, or build a new plant, or change locations, or buy a new organization, and that's going to suddenly change how things are done. And even looking at the private equity and the merger acquisitions world, they say that maybe less than 20% of those deals are really successful because they can't get the culture to really be aligned.
14:21 MS: And so again, getting a clear strategy is critical. And then again, I think it is about being very well-defined on what is the how? How do people need to think about doing that work? We are a knowledge-based workers now and the work we do is between our ears and so how we think about doing that work is really critical. And I think many organizations, the challenge that they run into, is that they have lots of different opinions and there is no alignment on the culture and defining that clearly. So those are the two, I think, big obstacles that organizations run into as a not very well-defined strategy and not defining the unique how things should be done for the organization.
15:15 AT: That's awesome, definitely a lot of good insights. And I find that a lot of organizations, they do things, but they don't understand [chuckle] why they're doing things. So they're so busy being busy, but they're being busy on the wrong thing.
15:30 MS: Absolutely.
15:31 AT: Perfect. And then my last question today is, is there anything else that you would recommend to our listeners, so either CEO or a manager who's in charge of leading strategy that they can take and say, "Okay, this is what we can start applying or start working within." Obviously, you've given us a lot of great stuff but yeah, anything else that you would recommend?
15:50 MS: Well, I think it's just reiterating the component around defining things so that you can measure them. And you can't manage things that you can't measure. And so when we look at this soft, squishy world of culture and again the hidden side, the molasses, you need to pull that out of the shadows and be able to measure those things. And I think the key kinds of measurements, these are different for each business, but what is the rate of change that's being accomplished? Are people putting those plans, are they getting those habits into place, I think is the first one. What is the key people metric that an organization has? Is it about scaling and getting people onboard and finding the right talent? Is it about having the right people in the right seats on the bus? Is it about what is the amount of turnover that they're having? Every business has a different key people metric. I think the third metric is the operational throughput. Again, how many jelly beans are going through the factory and what's the speed, what's the quality that those things are happening through the organization?
17:06 MS: And then the fourth one is the customer impact. And is that loyalty? Is it retention? Is it growth? And then the last one is really the financial component. Is it revenue? Is it profitability? Is it IBIDA? What is the key financial metric? And then just tracking those at the lowest level in the organization that you can. If you can do that on the front line team level, that provides real clear insight of who's winning and who's not, who needs additional help, where do you need to focus your resources, and time and attention. So I think that developing that real critical dashboard to drive those changes and provide clear visibility to how well you are executing the strategy.
17:56 AT: That's fantastic. Well, thank you so much for that, Michael. I think a lot of insights being shared with some CEOs and managers here that'll definitely give them the building blocks on how to create culture, figure out on the things that they need to focus on, and if they implement those four steps, along with all of the accompanying insights that you've given; so finding the additional contributors, the real how, finding the right measurements and then building those transitions through, I think they'll be well-versed to be able to work with their teams, and at the end of the day, like you said, move those jelly beans, get the throughput, and drive real results.
18:34 MS: Absolutely.
18:35 AT: So I just wanted to thank you, Michael. So I've got Michael Stewart of Work Effects, and my name is Anthony Taylor of SME Strategy. Thank you so much for chatting with me today, and I really look forward to sharing the rest of this with everybody else. So please check out Work Effects, and if you're in the Minnesota area, best place to find you?
18:55 MS: Most of the time, but certainly I'm on airplanes on occasion and travel throughout the country.
19:00 AT: Fantastic. And how else can people get a hold of you?
19:03 MS: Certainly, our website has a lot more information on our approaches, and that's work-effects.com, and we certainly have a number of webinars and other materials and a free assessment that you can take as a team to see how well your culture is aligned to your strategy, so there's lots of tools on our website. It's really probably the best place to get a hold of us.
19:31 AT: Fantastic. Awesome. Well, once again, thank you so much, Michael. I really appreciate you taking the time.
19:36 MS: Absolutely.
Want to learn more about Work Effects and how they can help your organization, visit :work-effects.com to learn more.
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