At the Gartner BI Summit this week, Robert Kaplan, a professor with Harvard Business School and co-author of the Balanced Scorecard, shared a few interesting anecdotes on how CEOs motivate employees to stay in sync with the corporate strategy.
The Balanced Scorecard is a performance management methodology that helps executives develop and measure strategic corporate objectives and make sure that everyone in the company is aware of his role in making the corporate strategy a success.
A lot of that methodology involves setting objectives and measuring those objectives. For example, Southwest Airlines had an objective of faster ground turnaround times for its planes. Executives did not measure this by timing takeoffs alone, but by how many ground crew employees were stockholders. In other words, being a stockholder would motivate ground crew to get the planes off the ground faster. More importantly, executives measured the success of this objective based on how aware the ground crew was of this objective and how it related to the airline’s overall corporate strategy.
One CEO at a financial services company drove the message of corporate alignment home by walking up to random employees with a corporate strategy map in hand. A strategy map is a visual representation of a corporate strategy that charts out the objectives of an organization, such as to increase employee satisfaction, and shows the link between that objective and how it will be implemented and measured. The goal is to show the cause and effect that objective has across several perspectives: financial, customer, internal business processes and learning and growth. A measurement linked to the employee satisfaction improvement objective could be employee turnover rate, for example.
This CEO would place the map on the employee’s desk and ask:
Do you know what this is?
Can you explain to me what this is?
Can you explain what you were just doing on your laptop and how it applies to our strategy?
The point of this exercise was not to instill fear in employees, although it did; the point was that internal email traffic exploded after an employee received such a visit, with everyone saying, “You better be prepared to answer these three questions.”
The CEO accomplished his goal of making sure employees knew what the corporate strategy was and their roles in making it a success.
The CIO should be taking a similar tack, or the IT department may find itself outsourced, Kaplan warned. Your success is tied to the success of your customers, the business users. You must be aligned to their needs.
“You should know what your value proposition is in the overall strategy and link your strategy to that of the business users,” Kaplan said. “That’s how you can sustain your existence and not be replaced by an Infosys [outsourcing company].”
So are you prepared to answer those three questions?