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1、Steve Sherretta六月 11, 2019Performance Management:Enhancing Execution Through a Culture of DialoguePeter is Chief Executive Officer for a medical supply multinational that recently crafted a new strategy to counter competitive threats. The plan stressed the need to cut cycle time, concentrate sales o
2、n higher-margin products and develop new markets. Four months after circulating the plan, Peter did a “walkaround” to see how things were going. He was appalled. Everywhere Peter turned people, departmentswhole business unitssimply didnt “get it.”First surprise: Engineering. The group had cut produc
3、t design time 30%, meeting its goal to increase speed-to-market. Good. Then Peter asked how manufacturing would be affected. It turned out the new design would take much more time to make. Total cycle time actually increased. “Our strategic plan message is not really getting through,” Peter thought.
4、Second surprise: Sales. The new strategy called for a shiftemphasize high margin sales rather that pushing product down the pipeline as fast as possible. But just about every salesperson Peter spoke to was making transactional sales to high-volume customers; hardly anyone was building relationships
5、with the most profitable prospects. Sales is doing just what its always done, Peter thought. Worst surprise: Even his top team, the people whod helped him craft the strategy, was not sticking to plan. Peter asked a team member: “Why are you spending all your time making sure the new machinery is wor
6、king instead of developing new markets?”“Because my units chief goal was to improve on-time delivery,” he answered. “But what about company goals?” said Peter. “We came up with a good plan and communicated it very clearly. But nowhere it isnt being carried out. Why?”Many organizations create good st
7、rategies, but only the best execute them effectively. Fortune magazine estimates that when CEOs fail, 70% of the time its because of bad execution. “Why CEOs Fail,” by Ram Charan and Geoffrey Colvin, Fortune magazine, June 21, 1999. Weak execution is pervasive in the business world, but the reasons
8、for it are largely misunderstood. Why is it that no one in Peters organization was acting in sync with the strategy? Unless we understand the reasons, we cant hope to solve the problem.Imagine someone hitting a tennis ball. When the brain says “hit the ball,” it doesnt automatically happen. The mess
9、age travels through nerve pathways down the arm and crosses gaps between the nerve cells. These gaps, or “synapses,” are potential breaks in the connection. If neurotransmitters dont carry the message across the gap, the message never gets through, or it gets distorted. When that happens, either the
10、 arm doesnt move at all, or it moves the wrong way.Creating a “culture of dialogue”Just like a nervous system, organizations also have gaps that block and distort messages. The secret to effective strategy execution lies in crossing hierarchical and functional gaps with clear, consistent messages th
11、at relay the strategy throughout the organization. Sound simple? Its not. The reason is that the “neurotransmitters” in organizations are human beingsexecutive team members, senior managers, middle managers and supervisorswhose job it is to make sure that peoples behavior is aligned with the overall
12、 strategy. Doing what it takes to achieve alignment is very difficult. It is what Ram Charan calls, the “heavy lifting” of management, and its the key to executing strategy. As well see later, there is an important difference between companies that successfully align behavior with strategy and those
13、 that do not. Companies that effectively execute strategy create a “culture of dialogue.” A culture of dialogue encourages pervasive two-way communications where individuals and groups 1) question, challenge, interpret and ultimately clarify strategic objectives; and 2) engage in regular performance
14、 dialogue to monitor behavior and ensure it is aligned with strategy. Three keys to managing performanceA culture of dialogue doesnt happen instantly, any more than a fluid tennis stroke does. It takes practice, persistence and hard work. So how exactly can leaders ensure that strategy messages go a
15、ll the way down the linethat the tennis ball gets hit correctly? The three keys to managing performance effectively are:1. Achieving radical clarity by decoding strategy at the top. Many organizations think they send clear signals but dont. In some cases, managers subordinate broad strategic goals t
16、o operational goals within their silos. Thats what happened with Peters top team. Elsewhere, top team members often have too many “top” prioritiesweve seen as many as 100 in one casewhich results in mixed signals and blurred focus. Strategy decode requires winnowing priorities down to a manageable numberas little as five. 2. Setting up systems and pro
