Performance Management & Strategy Execution Blog: The Glue

How to Make Your CEO Passionate About Performance Excellence

If you are a "performance excellence believer" and your CEO is not bought-in to the framework, prepare to be disappointed, because the one common attribute across all organizations that achieve significant improved results from performance excellence is a CEO who is bought in-and highly involved in the process. The converse is also unfortunately true (no CEO buy-in will mean few or no results).

So how do you get your CEO interested and involved in performance excellence?

You have to focus the entire effort on addressing whatever it is that keeps the CEO awake at night (profits, a critical product launch, customer retention, etc.). Finding out what this is for your CEO is relatively easy as it is totally top of mind for them. When I ask a CEO that question, there is no hesitation in the response. I always confirm that I understand which specific measure he or she is fretting about and what success (i.e. a target) would look like.

Once you understand the issue, a good place to start creating focus on it is during monthly performance reviews. How are reviews conducted today? What do they focus on? If they get too granular, focus only on silo or department issues, or wander too far from the key issue that's keeping the CEO awake at night, it's time to change them.

I used to think that reviewing the organizational Balanced Scorecard (BSC) was the best way to conduct a business review. I still think that works well for department- or division-level tracking of all of the drivers of strategy, but it just seems that a top-level BSC is too busy for most CEOs, who are primarily concerned with one or two key cross-cutting outcome measures.

Of course some CEOs are truly passionate about business reviews and, for them, building reviews around the BSC is great. But from my work with a lot of client CEOs, I can tell you that most CEOs don't want to see an operational review of all departments. Rather, what they want to know is whether all departments and areas are working on that big keep-me-up-at-night problem and, if they are, how well they're addressing their portion of the issue.

Since most organizations are not structuring performance reviews this way today, odds are that most departments are not currently focusing on the right drivers of that key focus area or outcome measure.

How do you create that alignment?

I find that a tool called a "measure structure tree" works great for this part (see example below). Basically, it's a correlation tool that helps define the cross-organizational measures that align best to the CEO’s "insomnia measure." The first level may be simple dis-aggregation for measures like profit. In that case the first breakdown might be profit by business unit. The next level of breakdown is usually by correlation. In other words, what drives profit in each business unit? Those can be measures of volume or expense by type, followed by measures of quality as the structure tree is further populated, finally getting to more and more process-level measures.

The next step is to determine which of the identified process measures are underperforming and deserve improvement resources assigned. Then, teams should use a sound methodology to find and eliminate the root causes.

Finally -- and this part is absolutely critical -- format your monthly performance reviews so they make it incredibly obvious to the CEO that every initiative is indeed focused on improving the most important “drivers” of the "insomnia measure" or problem.

If you'd like to see how we do this really dynamically using ASE 10 (ActiveStrategy's newest software release), let us know. It's making lots of CEOs rest easier (and become true believers in the power of performance excellence).

Master Showmanship or Truly Great Performance Results?

One really interesting part of my job over the years has been to see how organizations report and discuss performance. Some organizations have very clear, concise scorecards or reports that they use as the basis for all performance discussions and business reviews. These are definitely the minority. 

Most organizations--even those that have a pretty well-defined process for reporting and discussing performance--tend to use an ad-hoc "product" for these purposes (typically involving varying combinations of spreadsheets, reports from software packages, and department-specific PowerPoint decks). I've found that this wild and loose approach to presenting performance leads most organizations to think they are doing better than they actually are (especially if under-performing areas happen to be led by great presenters).

Let me explain by using an example. A very large health insurance company I was working with religiously tracked the total number of people that were members of their various plans. A “total membership” target was set by geographic region and a significant portion of management pay was tied to hitting these targets.

Every month, the leadership of each geographic area would present an in-depth PowerPoint presentation showing their performance for the preceding month. The first chart would always be total membership.  The rest of the presentation would discuss various other performance issues for the unit. It was actually a pretty good performance review process. Each area had an allotted time, there was an agenda to review action items from previous meetings before presenting current performance, and there was ample time for Q&A.

But as I started going back through many months of PowerPoints for different units, a different picture began to emerge. (Put aside for a moment that it was very difficult to even find the historical PowerPoints.) It quickly became apparent that there was no standard template for what the presentations contained, other than that the first slide showed the total membership number. I noticed several trends:

• When the total membership number was met, the overall presentation was shorter (in number of pages) and the number of under-performing measures or objectives that were included in the presentation was larger.
• When the total membership number was not met, the presentation was longer and consisted of more pages showing “good news,” as if in an attempt to make up for the miss in the most important metric.
• Very often, a measure that was called out in a presentation as missing target or poorly performing would never appear in subsequent presentations (either to show that it had improved or was still under-performing).
• There was a core of about 25% of content that was somewhat consistent, but the other 75% of the presentation differed from month-to-month and unit-to-unit.
• Frequently, the scale of charts favored the message being delivered. That is, if a chart showed that a goal was missed, the scale of the chart tended to make the miss “look” small. If a target was exceeded, a different scale was used to make it “look” more impressive.

A little more poking around led to the astonishing finding that the combined work effort of all of the staff in the various geographic units involved in creating these presentations was many hundreds of hours per month. Even worse, it turned out that many of the new “members” helping to meet the critical front-page number were coming from low- (or no-) profit-margin plans, or even from new hires made within the company itself! Yet it was not at all obvious from the presentations that this was the case.

So what we had was many people spending hundreds and hundreds of hours to make a custom presentation every month that made their performance look as good as possible. Highlight the good, mention the bad, make the charts look as “good” as possible, and then forget about it. Senior management could be influenced as much by showmanship and style of each presentation as by the actual underlying performance numbers.

There is a lesson here. Even the tightest business or performance review process is dependent on the "product" being used to conduct the review. That product can be PowerPoint, reports, spreadsheets, or a software package. What is important is that as much of the "product" is consistent month-to-month as is possible.  If it’s a PowerPoint, this means using the same set of slides each month, reviewing the same important objectives and measures, using the same charts (with the same scales), as well as the same set of important strategic initiatives. If things are going well, flip past the slides and don’t focus on details; if not, spend some more time in review. But don’t allow the presenter to create a fancy new dog-and-pony show from scratch each month that obscures reality.

At ActiveStrategy, we’ve always believed that using consistent software presentation vehicles: 1) make for a better business review and 2) save staff time. With our newly-released ActiveStrategy Enterprise 10 (ASE 10) we’ve introduced a new feature called ActiveView, which eliminates the problem I described above. 

ActiveView allows any user to create a performance “presentation” deck, which can look however they want, with flexibility similar to PowerPoint. But unlike PowerPoint, an ActiveView links dynamically to live performance data that already exists in ASE 10, such as measures/KPIs, objectives, performance charts, etc. Every time you access the ActiveView, it automatically displays the most up-to-date information available. So you only need to create it once. You can print the entire presentation with a single button, or better yet use it directly in a performance review so you can click into any part for more in-depth information. Organizations save many hours each month creating presentations, they have consistency month-to-month, and they have immediate access to historical data and commentary. No more dog-and-pony shows.

Even if you don’t have a software package to support your business reviews, I’d strongly recommend getting started by establishing a consistent reporting process and using a consistent product. 

How to Organize Your Initiatives to Drive More Effective Improvement

When we started ActiveStrategy more than 11 years ago, we based our new solutions on the knowledge we'd acquired over many years deploying performance excellence and strategy execution frameworks in the real world. This practical experience taught us that the software we were developing (to help make these frameworks easier to deploy successfully) had to have rich support for monitoring and encouraging the actions people take to drive performance.

So, from version 1.0 of our software through today, we’ve led the industry in support for tracking tasks and projects to make sure that all of the actions needed to get results are front and center when our clients use ActiveStrategy Enterprise (ASE) to run a business review. (As an aside, it still amazes me that, even today, some so-called “performance management” software packages have little or no way to truly track and manage actions.)

Because of how critical initiatives and actions are to driving performance results, I want to share some insights into some of the ways our clients are having particular success using ASE to manage them.

One way is by using "phases" in ASE, which let users group and manage large numbers of initiatives (which some clients relabel as "projects") according to various factors or attributes, such as the responsible department, the quarter in which the initiative is occurring, or type of project. I'll explain more on phases in a bit, but I first want to explain some of the more fundamental ways we handle projects in ASE.

Initiatives in ASE can have their own lower-level tasks and milestones, allowing you to get quite granular with project management. And you can group multiple initiatives and tasks together into what we call "program groups."

Initiatives and program groups display (among other attributes) owners, current status (at several levels), and status reports. They can all also be linked to measures, objectives, and to each other (so you can create hierarchies of program groups with initiatives below them, and tasks below them).

By linking tasks to initiatives, and initiatives to program groups, and then creating additional higher-level "parent" program groups, clients are capturing the status of hundreds (and in some cases thousands) of important projects that are being worked on throughout the organization. 

But wait a moment. You might be thinking (if you're already familiar with ASE) that since ASE is a strategic management system, you should really just be using it to track the most important top-level strategic projects. To that I'd say yes...and no.  Yes, you need to track the highest-level strategic initiatives and have your top management team review their progress on an ongoing basis. But no, that isn’t enough. The real value of any Strategy or Performance Management system is to drive accountability, transparency, and (most importantly) regular business reviews down to the people who actually do the work, so cascading initiatives is a critical piece.

Let’s take an example. A large government agency client of ours has about a dozen main strategic initiatives (to get a sense of scale here, many of these initiatives approach a billion dollars in funding).  These are the 12 things that the leader of the agency reviews on a regular basis. But in preparing to report the status of each of those 12 top-level initiatives, the owner of each has to review the status of 20-40 sub-projects that drive each initiative. Each of the owners of those projects, similarly, needs to monitor the status of one project across many regions and several other contributing projects. And so on, and so on, and so on.

In a standard “Balanced Scorecard” model, these projects at the top level would (and should) be linked to the objectives (and, through association) to the measures they would drive. But once you get past the top few levels, it gets very difficult to meaningfully cascade objectives and measures down really deep into the organization. 

But cascading the initiatives and child initiatives down many levels is much more practical--and meaningful. This actually does make it straightforward to link the actions of tens of thousands of people with those 12 top-level initiatives.

And by using  ASE's “phases,” it’s easy to review progress during a business review, even though the projects may now involve thousands of people.

Here's how. In ASE, phases are more or less just "buckets" that you can use to group initiatives or program groups within a parent program group. You can have as many phases as you want, and you can call them whatever you want.

In the example above, each top-level program group might break all of the initiatives and program groups into the following phases: Cost Savings, Outreach, Effectiveness, and Efficiency. Thus, rather than working one-by-one through the status of 20-40 sub-projects during a business review, our client can examine and discuss how they are doing on projects within each specific area. In this case, phases allow for a logical grouping of actions that make the business review much easier.

Now let's consider a large corporate client. They have more than a hundred Balanced Scorecards throughout the organization (some are more "balanced" than others, depending on where they are). There are about a thousand initiatives being tracked, each dutifully linked to the objective it drives. When they are doing a business review of a particular business unit, they can review each initiative in turn with related objectives on the scorecard. 

But what if I’m the CIO and I only want to review my IT projects ? What if I’m the head of marketing?  Or the person in charge of compliance? It would be pretty difficult to find all of the initiatives I’m responsible for across the entire organization (because they are all linked to the cross-functional objectives). How can I quickly get a feel for the status of the activities related specifically to my group?

No problem! We can quickly create program groups that link to those IT, or marketing, or compliance projects and group them into their own view. Now don’t forget that they are STILL linked to their respective objectives, but we can also view them separately as part of a phase. 

In IT, the groupings might be by development phase: ideation, requirements, development, QA, production.  In Compliance they might be by area: federal securities law, affiliate rules, antitrust, environmental, political, and facilities management.

By creating the right hierarchy of initiatives and program groups and using phases to further group them into categories that make sense to specific leaders, we can make it possible to quickly and easily monitor the status of hundreds (or more) initiatives in a business area that are important to driving results throughout other areas of the organization. 

The best part is that with ASE your business users can easily do all of this linking, grouping, initiative/program group creation...without needing any help from IT.

I welcome your comments on how you're handling initiatives today and thoughts on whether phases and program groups could help.

Using Balanced Scorecards to Manage Strategic Alliances

Note: This is a special guest post from Michael Contrada, Founding Partner of Bull River Group, an ActiveStrategy Strategic Consulting Partner.

Creating internal organizational alignment is one of the key benefits of adopting the Balanced Scorecard. Less appreciated is the power of the Scorecard strategy management approach when it comes to driving alignment and results across two separate, but strategically related, organizations.

An excellent example of this application of the framework was presented by a provider of security services at the recent ActiveStrategy client conference this past May.  The organization shared how it uses performance measures to track and communicate performance to its key customers.  As part of their contractual agreements, in fact, the security provider’s customers get direct access (in ActiveStrategy software) to current performance across several dimensions, including audits, response time, incidents, turnover, and IT uptime. This approach allows the service provider to demonstrate success, highlight individual location performance, and foster a forward-looking dialogue on their relationships with key customers. This is a great example of a practice that is growing in importance across many industries.

At an upcoming ActiveStrategy webinar (on August 10th at 2 pm ET), Randy Cole, my colleague at Bull River Group, will discuss another example of using the Scorecard approach to drive alignment across organizational boundaries.  His webinar will focus on Strategic Alliances where the goal is not simply monitoring performance against SLAs but the joint accomplishment of shared strategic goals — “making one and one equal three.”  These kinds of strategic partnerships are increasingly important, but are also difficult to manage successfully. The obstacles include:

1.    Over-reliance on financial and legal factors
2.    Lack of shared understanding and agreement on the drivers and actions required for success
3.    Focus on control as opposed to building a long-term relationship 

Experience suggests that two partners working together to build a joint Scorecard management process goes a long way to overcoming many of the barriers of traditional strategic alliances. The webinar will include a case study and describe the approach that was used.

For readers who want more information on this topic of managing strategic alliances with the Balanced Scorecard, I recommend looking at the article by Kaplan and Norton in the Harvard Business Review January-February 2010.

And if you would like to further discuss how to get the most value out of strategic alliances now or after the webinar, please comment below or send me your questions.

De-mystifying Strategic Planning, Part 4

Here's the final installment in this series. As a recap, Part 1 described the overall process of preparing for a strategic plan and introduced the key outputs of a strategic planning session. Part 2 covered the tools and techniques commonly utilized in the process. Part 3 described why you might want to consider using an outside facilitator for your next planning session. This time I'll dive a little deeper into the planning outputs and how to derive them.  

As you're working through your strategic planning sessions, you should aim to complete these items:

1. Confirmed or refined Mission, Vision, and Values statements
If these three documents already exist, they can simply be shown on a flip chart or a Word document and updated or refined, as needed, by the group.

If they don't already exist, a small group should draft something ahead of the session to provide a constructive starting point. As a recap, the Mission spells out why you are in business. Vision clarifies where you'd like to be (in a measurable fashion) at some defined point in the future. Values should describe the attributes of your desired organizational cultureand daily behaviors.

The task of carefully finalizing all of the wording and punctuation should become a follow up action item that is assigned to a few people to complete after the session. Group "word-smithing" is neither fun nor productive.

2. A Strategy Map
A strategy map is merely a pictorial view of your 3–5 year strategy. It contains perspectives, or strategic areas, that help ensure a balanced approach to setting goals. It will contain your top strategic objectives (the same ones that will live on your top-level scorecard), as well as arrows showing the causal relationships among the objectives. It may also include strategic themes, which are groupings of strategic objectives that may live in different perspectives and that add clarity to the picture. Here's a bit more information on each part:

• The perspectives look like "horizontal swim lanes" on the strategy map and will either come from a previous year’s scorecard or, if you're building your first strategy map, you might try to find examples from another organization within your industry (or in a similar industry) to use as a starting point. This is an area where an outside facilitator could help provide ideas on appropriate perspectives, as well as the cause-and-effect sequencing.
• The objectives should come directly from an organizational SWOT analysis (as mentioned earlier in this series), and are built into the perspective areas on a flip chart or white board (as a draft). As you go, the facilitator can start to add arrows between objectives to indicate cause-and-effect relationships.
• A good way to "test" the strategy map is for the facilitator to talk through the strategy map from bottom to top, reading out the objectives and calling out the causal relationships depicted by the arrows. If it sounds like it encapsulates the strategic plan and also fits the organization's mission and vision, it's a good strategy map. Otherwise, you may have missed a key objective or two.

3. A preliminary Balanced Scorecard
A Balanced Scorecard takes the items on the strategy map and "operationalizes" them for deployment by adding measures with 1- and 3-year targets for tracking progress, along with key improvement initiatives.      

It is difficult to finalize a top-level organizational scorecard in a strategy session since the attendees are often senior managers who are not always the best people to determine the best measures. It’s not that they don’t understand measures, but they may not know which measures are currently tracked or how difficult it might be to collect data on proposed new measures. It’s better to engage subject matter or process experts to develop the measures and have the senior managers review and approve them at a later time.

If you're new to scorecard development and measure creation, you might find it helpful to view our recorded webinar, "Balanced Scorecard Fundamentals," available through this link. Or, again, this is an area where an experienced facilitator can make the process run smoothly and quickly.

4. Identified breakthrough improvement areas
It’s important to identify a few issues, objectives, or preferably measures that are severely underperforming. For these areas that need to be improved dramatically, you should identify multiple initiatives that address the drivers of the problem(s). These can be issues like Revenues, Operating Income, Margin, Organizational Readiness, Customer Satisfaction, Employee Satisfaction, etc.

5. Preliminary prioritized initiatives
Every single organization I have worked with has historically tried to work on too many initiatives. The result is that the most important projects or programs do not get successfully completed. Prioritization of initiatives is absolutely critical because organizational performance will never change without an initiative that changes a process or adds a new program.

The prioritization process begins at the strategic planning session, though it is never completed there.

There are several types of initiatives that can emanate from an organizational SWOT analysis. Those initiative types are capital expenditures (like brick and mortar, technology, etc.), the development of new programs (like services offered, a diversity program, a knowledge management system, etc.), or initiatives to address breakthrough improvement targets.       

There are two keys to prioritization. First, choose quantitative prioritization criteria such as the priority of the objective addressed by the initiative, the magnitude of the underperformance being addressed, return on investment, ease of execution, etc. This focuses the discussion on data rather than opinions. Second, always “leave room” to put a full-court press (multiple initiatives addressing multiple drivers) on the breakthrough improvement targets.

I hope you've found this series helpful. I welcome your questions, suggestions, and comments below. If you'd like to chat with me about your own planning process and unique challenges, I'm happy to hear from you! Send me a note through our contact form anytime.

How to Capitalize on One COO’s Key Challenge and Lesson Learned

Becker's Hospital Review featured a Q&A with Johnese Spisso (Chief Health System Officer of UW Medicine) earlier this week about the challenges and lessons she's learned while running an academic medical center.

When asked about challenges, her answer boiled down to this: staying financially viable while doing more with less (achieving better outcomes with fewer resources).

What about her lesson learned? She mentioned the importance of having the leadership team embrace their strategic goals and be accountable for achieving them.

Both the challenge and the lesson are, I'm sure, familiar. And they're intertwined. The only way to do more with less is to focus everyone--from the leadership team to the front-line staff--on achieving the same strategic goals, and to hold each person accountable for his/her share of the results.

How? Incorporating strategic goals into the incentive plans of your senior leaders is a good start, but it’s not enough. Most leadership teams do this, and still I don’t see stellar results across the board.

Here are two elements that are far too rarely embraced, but which can help any COO achieve Johnese’s vision:

1. Adopt a new kind of business performance review 
   • Leaders should sequence or prioritize which strategic goals will be discussed (most typical reviews cover far too many topics).
   • All the right people must be in the room to address a specific focus area (otherwise, this is a missed opportunity to think and manage cross-functionally, which is required for almost every high-level issue in a health system--or any other type of business, for that matter).
   • Have access to all necessary information during the review (having only surface-level data available in the reviews means that probing questions often can't be answered).
   • Ask the right questions (as mentioned above, most review discussions do not lead to verified root causes of underperformance--partly because underlying levels of information aren't accessible and partly because leaders fail to ask enough of the right probing questions).
2. Prioritize resources 
   • Success is not only determined by what you WILL do, but also what you WON’T do. Leaders must make the tough calls on which less-strategic projects won't get resources--at least not now.
   • If you don't already have one, you need to put a system in place that lets you see all of the work that's currently going on in the hospital.
   • You need to have a structure and process in place that enables you to make resource decisions based on rational criteria (including degree of alignment to the prioritized goals).
   • COO reviews must include decisions on sequencing and prioritization for improvement projects and other initiatives.
   • If you don't already have one, you need a system in place that lets you monitor if resources actually get allocated and deployed as suggested, who is responsible for the work, and if the related improvement work has the desired effect on outcomes.

 

De-mystifying Strategic Planning, Part 3

Here's the next installment in my series that I hope is adding some new clarity and understanding to your strategic planning process. As a recap, Part 1 described the overall process of preparing for a strategic plan and the other key outputs of a strategic planning session. Part 2 covered the tools and techniques commonly utilized in the process. This time, I'll talk about why you might want to use an outside facilitator for your next planning session and what qualities you should look for if you do decide to bring in such a person.

Even many organizations that have strong internal planning capabilities find that bringing in an objective outside person to facilitate the strategic planning process can lead to better, faster results. There are several reasons third-party consultants can be at an advantage. First, an outside consultant can bring a fresh perspective that can help the group think about possibilities that they might not otherwise consider because of pre-conceived notions and biases. Second, an outside voice can often nudge senior leaders toward consensus in a way that may not be politically viable for an employee. Third, experienced consultants benefit from having worked with many, many different senior teams, which greatly improves their odds of success when dealing with leaders that have strong personalities.

If you're thinking about bringing such a person into your organization, here are some things to keep in mind as you interview them and check references. This is really important because just as the right consultant can drive success, the wrong one can completely derail your efforts and even sour the entire executive team on strategic planning.

To be a good strategic planning facilitator, an outside consultant MUST:

1. Have a style that fits your organizational culture and meshes with the personalities of those attending the planning session.
2. Have a wealth of strategic planning experience from many types of industries and companies.
3. Be a good coordinator to help ensure, among other things, that the necessary pre-work is done and communicated in a timely fashion.
4. Be able to facilitate senior executives effectively in order to move the group ahead while extracting the key information from all of the discussions.
5. Be able to help the group feel positive about the overall strategic planning process and its outputs.

Many of these things might seem obvious, but they can be particularly difficult to judge from an initial conversation or interview, so be sure to ask about these things when you're speaking with previous clients of your potential facilitator. And, as always, please comment below with your thoughts and any additional questions you might have about strategic planning facilitation.

In my next and final post in this series, I'll dig a little deeper into the strategic planning outputs that will put you on the path toward successful strategy execution.

4 Keys to a Speedy and Sustainable Financial Turnaround

I see a lot of work being done within hospital departments aimed at improving bottom lines. I see teams working on IT projects and process improvement and lots and lots of measurement. The problem is, these efforts are creating a lot of busy work, but they are not translating into quick and sustainable financial results.

Here are four things I suggest you put in place to capture--and sustain--the ROI you're looking for:

1. Alignment
2. Stretch Targets
3. Prioritization
4. Reviews

I recently read Leigh Page’s article about three common hospital coding problems (read article here) and thought this would be a good example to highlight what I’m suggesting. In a nutshell, improving coding problems with short stays, infusion therapy, and discharge status may represent a substantial financial opportunity for your hospital. Here’s how to work through the opportunity using the four keys I suggest above.

(By the way, this approach applies to organizations outside of healthcare, too).

1. Alignment 

Too often, I see project work with no measurement of project success, nor timely completion. I'm talking about outcomes that are directly correlated to moving the needle on the top level measure "$ cost savings." Often this is the case because each team does not control the ultimate outcome; they merely influence it partially. To capture the ROI from coding changes, it will require a multi-department, cross-functional effort with changes from IT, finance, nursing, medical staff, and more. As individual departments, it’s hard to get motivated by implementing work and not seeing a result.  I suggest:

• A sponsor at the executive level who can foster dialogue between departments
• One cost savings measure that each department can align to (when work is done across all the departments, this one needle will move)

2. Stretch Targets

Your participants need a stretch, but realistic target at the top of the house ($ cost savings) which helps the team guage "how close we are.” For RAC denials, this will be a significant (potentially $ millions) opportunity.

Stretch, but realistic, targets must be set for each project outcome measure as well.

One way to challenge yourself is to ask this question before you get started on project work: “if I reach the target on every outcome measure I've identified for this effort (short stay, infusion therapy, discharge status project outcomes), will I achieve my cost savings goal?” If the answer is no, then either you have not set the right targets or you don’t have all the right improvements in place.
 
3. Prioritization

If your hospital is like most of those I work with, you’ll know how easy it is to add more work for your staff and how hard it is to take existing work off the table (I work with a client who uses the term “to don’ts” for the second group, which I really like).

This is where the cross-functional team, led by the executive sponsor plays a key role. In order to achieve financial results quickly, you need to re-sequence, reprioritize, delay, or simply take some other work off the table. 

For each “to do” you introduce to the medical, nursing, and IT staff, have you introduced a “to don’t?”

4. Reviews

Just measuring something won’t change an outcome. It might give you a temporary blip, but it certainly won’t lead to a sustained improvement.

Rather than "what gets measured gets done," we like to say  “what gets reviewed gets done.” To drive something as big as a financial turnaround requires that the executive sponsor challenges their cross-functional team on many levels and frequently enough to convey the right sense of urgency. I'd expect to see these types of challenges occur during the project reviews:

• Is it OK for a project to be on hold for 3 months if it’s holding up your ROI?
• Is it OK for a project to be classified complete, but to see no change in the outcome measure?
• Is it OK for staff to go back to old habits if it threatens a sustainable ROI?

I've seen this basic structure work in many areas of financial turnaround. It takes discipline and dialogue, though, not just measurement.

Learn & Network at ActiveStrategy's 2011 Conference

Learn how senior leaders at all types of organizations are successfully applying the same principles  discussed on The Glue by attending ActiveStrategy's 2011 Annual Conference.This networking-intensive conference will take place May 2-5 at the Hyatt Regency Penn's Landing on Philadelphia's waterfront.

This is a great chance to hear practical approaches that have worked for other organizations (and to learn about potential mistakes to avoid as well!)

Speakers will include three state-level Baldrige recipients (Feather River Hospital in CA, Miami-Dade Park & Recreation Department in FL, and the Ohio Army National Guard), plus senior leaders from other hospitals, pharmaceutical companies, governmental organizations, non-profit organizations, and profit-focused companies.

Here are a few of the topics and speakers on the agenda:

• Achieving Alignment through Strategy Execution, presented by Patricia Jaar Watson, Manager, Strategy Realization, Merck, a Balanced Scorecard Hall of Fame Organization
• Becoming an Outcome-Focused Organization, presented by Evelio Torres, President and CEO, Early Learning Coalition of Miami-Dade/Monroe
• Best Practices in Strategic Planning & Deployment, presented by Yvonne Hochfelder, Chief Strategy Officer, U.S. Department of Veterans Affairs VHA Chief Business Office
• A Leader’s Role in Performance Excellence, presented by Clayton Fitzhugh, Executive Vice President of Shared Services, Catholic Health East
• Thinking Outside Your Walls: Using ActiveStrategy Enterprise Sofware to Win Business & Manage Customer Relationships, presented by Scott Walters, Vice President of National Accounts, AlliedBarton Security Services 

There will also be highlights of the latest release of ActiveStrategy Enterprise software, which enables organizations to develop a holistic strategy management framework by deploying, linking, and automating scorecards, performance metrics, improvement projects/initiatives, and more.

This event is open to ActiveStrategy clients, as well as all other organizations hoping to learn more about successfully executing strategy and improving performance.

Read more about the agenda or register online.

De-mystifying Strategic Planning, Part 2

Any organization hoping to develop a solid, ready-to-execute strategic plan absolutely must have these four things:

1. The right strategic planning process
2. The right tools & techniques that support the process
3. The right person to guide the organization through the preparation steps as well as the actual planning session
4. The right planning outputs to deploy to the organization and to execute

In my first post in this series, De-mystifying Strategic Planning, Part 1, I described the overall strategic planning process (#1 above), including how to prepare for and develop a strategic plan, as well the other key outputs of a strategic planning session.

This time I'll talk a bit about a couple key tools and techniques that I find are most successful in supporting the process.

As a quick review from Part 1, the actual planning process is comprised of the following components:

1. A series of inputs to the planning process that are both internal and external to the organization
2. A forum to discuss and understand those inputs (the planning session)
3. A method to choose the most important inputs to address in the strategic plan
4. The creation of a few key outputs that will be part of the plan

And the main three inputs are:

1. Stakeholder feedback on their requirements and your performance on those requirements
2. External input from a variety of sources
3. Internal input from the employees by department or business unit

Okay, so what are some tools and techniques to gather these inputs?

Stakeholder feedback often comes in two steps. First, focus groups are qualitative interviews of small groups of stakeholders to determine the key requirements that a stakeholder group requires of the organization. Second, surveys (e.g., customer survey, employee survey, etc.) are quantitative and statistically significant feedback on the relative priority of those requirements to the stakeholders and the stakeholders' perception of the organization's performance.

External inputs may also come from interviews, questionnaires, or even written guidelines or mandates, such as from government sources.

To gather internal input, I like to use a SWOT matrix. It's simple, but it's also a great way to capture issues from departments or business units.

To create a template, make a 2 x 2 table in a Word document and label the four blocks “Strengths (Internal), Weaknesses (Internal), Opportunities (External) and Threats (External).” Provide instructions as follows:

Responsibility Area: ___________________

Responsibility Area Owner: ___________________   

• Identify in bullet form the Strengths, Weaknesses, Opportunities, and Threats for your responsibility area as they relate to achieving your contribution to the organizational Mission 
• Strengths and Weaknesses are internal to the organization and Opportunities and Threats are external 
• After you have filled out your SWOT, choose and italicize the 4- 6 most critical and/or poorest performing issues across your SWOT as critical input to the upcoming organizational strategic planning session. 

As mentioned in my previous article, at the actual strategic planning session all of the inputs should be presented by different individuals, who highlight the few most important issues from each information source. Then the inputs should be discussed as a group and the key issues (based on the group’s decisions) should be moved to an organizational SWOT Analysis that is being built as you go.

Again, the tool is the same 2 x 2 table mentioned above. It can be built on flip charts on a prominent wall, on a white board, projected on a screen, or in some other way in a very visible location in the room. Throughout this process, the facilitator should be encouraging discussion, while keeping the session moving at a good pace, ensuring that priority issues are being captured and moved to the organizational SWOT.

Now it is time to begin focusing and prioritizing the key themes, objectives, breakthrough improvement areas, and initiatives (step 3 in the process above). At this stage, the group is attempting to identify strategic challenges to address and strategic advantages and core competencies to leverage or strengthen.

This focusing part is probably the most critical (and most difficult) part of the session.

What I've found works well is for the facilitator to use an affinity process, which involves sorting through the organizational SWOT, grouping related items, and using the groupings to come up with 10 to 12 topics. Then I'll write them on a flip chart, have the group confirm or refine them, and do a quick check on the SWOT to make sure we captured all of the main ones.

The next step is to turn those topics into “verb noun” objectives like “Increase Customer Satisfaction” or “Grow Revenues in the Commercial Business”, and even into groups of related objectives, which are often called themes by strategy map aficionados.

In my next post, I'll talk more about the role of the facilitator, including why a third-party consultant can often be the right person to guide you through this critical process. I'll wrap up with an article that will go into more depth on the planning outputs.