Personal Objectives Aligned with the Strategy

Are your employees’ personal objectives clearly aligned with and supportive of your strategy?
A. Strategy is for management.
B. We like to think that our employees’ ambitions reflect the companys’.
C. Some managers and employees have set personal objectives that are aligned and supportive of our strategy.
D. Each of our key managers has set personal objectives that are clearly aligned and supportive of our strategy.
E. Each of our employees has set personal objectives that are clearly aligned and supportive of our strategy. 
[Score:  A=0, B=1, C=2, D=3 and E=4]
Why is this question important?

A successful company and its leadership must have the ability to meet financial and customer expectations in a changing business environment.

To win customer confidence and meet business plan objectives, the leadership team must not only develop a coherent written strategy, but drive results by turning the strategy into a reality through communication and a performance measurement system.

Turning business strategy into ‘actions’ is a difficult undertaking.

In their book Marcus Buckingham and Curt Coffman (First, Break all the Rules: What the World’s Greatest Managers Do Differently) identify 12 questions that describer a productive work environment:

  1. Do I know what is expected of me at work?
  2. Do I have the materials and equipment I need to do my work right?
  3. At work, do I have the opportunity to do what I do best every day?
  4. In the last seven days, have I received recognition or praise for doing good work?
  5. Does my supervisor, or someone at work, seem to care about me as a person?
  6. Is there anyone at work who encourages my development?
  7. At work, do my opinions seem to count?
  8. Does the mission / purpose of my company make me feel my job is important?
  9. Are my co-workers committed to doing quality work?
  10. Do I have a best friend at work?
  11. In the last six months, has someone at work talked to me about my progress?
  12. This last year, have I had opportunities at work to learn and grow?

“The most successful Balanced Scorecard implementations have occurred when organisations skilfully melded the … motivation emanating from its leadership and communication program with the … motivation created by aligning personal performance objectives and incentive compensation … employees develop personal objectives that are aligned with the strategic objectives … personal objectives create a clear line of sight between strategic objectives and the work that each employee does every day” – Kaplan & Norton (The Execution Premium)

Many organisations encourage employees to develop Personal Scorecards, with each employee setting targets to improve a cost or revenue figure, boost performance with customers, improve a process or two that will deliver customer and financial value, and enhance a personal competency to drive process improvement.

Many companies also link incentive compensation to targeted Scorecard measures.  In such cases management often see a significant increase in employees’ interest in the strategy.  The philosophy of such a link is that if the company does well, the employees should share in the value they have created.  Further, by linking incentives to performance on Balanced Scorecard Metrics, management signals that it is serious about the strategy the Scorecard represents.

To align employees with the Strategy, employees must develop the competencies – the knowledge, skills and values – that enable them to excel.

Knowledge

Knowledge is what an individual knows, an understanding gained through education and experience.  It represents mastery of a filed of study, a professional or technical discipline, or a focused area of expertise.

Skill

Skill is the knowledge of how to do something in a consistent and efficient manner, s.a. executing a sales call, facilitating a meeting, scheduling a work plan.

Values

Values are the behaviours,  traits and motivations that people bring top the tasks they perform; they are sometimes categorised as: customer-focused, pragmatic, innovative, or goal oriented.

The company can develop knowledge and skills among its employees through training and development programmes, along with career development that gives employees experience in various tasks and functions.  Installing values is more complex – apart from careful selection and recruitment, it takes extensive training and communication of corporate mission and values

Personal Scorecards

  • Personal scorecards can only be effective when the employee can personally influence the measures.
  • It is sensible – and encourages adoption – to create personal scorecards that comprise only the perspectives that the individual can influence.
  • The individual must not only be shown ‘what’ they must achieve, but also ‘how’ they can achieve this.  The ‘what’ comes from the creation of an individual scorecard or the selection of key measures / targets generally from a team scorecard.  The ‘how’ is provided by the identification of a set of competencies that are found to be related to the demonstration of ‘excellent’ performance.

Clarity: we have determined what we must do and how what we do supports the overall strategy.

Simplicity: there are only two or three measures for each area.

Accountability: we have measures to identify our progress and stay on course.

Focus: having only a few measures enables us to concentrate on what’s really important.

Machines and computers do not make any company successful –  people do.