Connecting strategy and performance
HOW DO you ensure that employees are balancing their time between routine activities and long-term, strategic projects?
Managers and their human resource partners have been tackling this problem for decades but continue to fail to separate the two different energies essential to sustain high performance. Here’s why.
Robert Pirsig’s Zen and the Art of Motorcycle Maintenance was a cult hit, but his follow-up book ‘Lila’ offered important, practical ideas for every organisation. He outlined two kinds of value in everyday life: dynamic and static quality.
Dynamic quality is the energy needed to make change happen. He defines it as a disruptive force that upsets the status quo, drives improvements, and makes a difference. Its opposing ‘yang’ is static quality the energy needed to keep things the same. This is the source of maintenance chores; the continuous reliability that allows daily life to function.
Most people prefer one or the other, but in Pirsig’s brilliance, he brought the two together. Instead of seeing them as enemies, he imagined they exist in a symbiotic, alternating partnership.
He explains that each kind of quality has its season. There are dynamic moments when change must be driven versus its static counterpart, where gains have to be consolidated. The key is to ratchet between the two at the right tempo without getting stuck in either harem-scarem chaos or brain-dead stasis.
How does this idea apply to your organisation?
Each year when your firm conducts its annual strategic planning retreat, it’s allowing dynamic quality to run unbridled and free. Representing a dramatic departure from the routine of daily activity, it deserves its vaulted place in the calendar.
However, static quality probably reigns supreme on every other day. Immediately after the event, the status quo reasserts itself, adding friction. Innovation degrades into wishful thinking. Customers remain upset, processes are never fixed, and profit margins don’t improve. The retreat is ultimately judged as an expensive waste. Some companies stop having them altogether.
In the 1990s, to answer this problem, Drs Kaplan and Norton invented the balanced scorecard. Along with the strategy map, these tools were intended to connect long-term plans with daily activity. After two decades, we now realise that much more is needed.
The duo never imagined the mistake most companies make in implementing their ideas. In direct contravention of Pirsig’s call for clear separation, they implement performance management systems, which throw dynamic and static quality into a single lump. As a result, staff is unable to answer the questions of what to do to keep things the same, versus change, and how to achieve a balance of time and effort between the two.
The result? Staleness. Boredom. Failed improvement initiatives.
Here are three tactics that will begin to break them out of their predicament.
First, bravely separate dynamic and static quality. In my firm’s planning retreats with executives and board members, we find ourselves working hard to keep the two energies apart. ‘The effort to envision a shiny future must be informed by the status quo but not limited by it’ is our mantra as participants reach for dynamic quality.
The very purpose of a retreat is to consider a brand-new vision — a courageous act for most teams.
To wit, I have been in retreats where attendees risked their jobs to birth a breakthrough future. In one case, executives were collectively and ultimately successful, but they paid the price before their vision came to fruition when some were summarily fired. Needless to say, this is an extreme example, but Dynamic quality always requires courage.
Second, create organisational strategy and business-as-usual, or BAU, metrics. To strike a balance between the two energies, companies need to measure two kinds of activities after the retreat.
The first set applies to the annual strategy and tracks its implementation. The second BAU metrics are ones required to maintain company functions and change little from year to year.
At the highest level, the CEO and employees must keep track of both. However, boards should demand to see the former, while saving any interest in the latter for the exceptional circumstance.
Third, deploy blended performance management. In most companies, the individual employee has no clue which parts of his job are strategic versus BAU in nature. Therefore, he has no idea where to focus. In its place, provide each person the means to define separate targets in both areas.
Also, appreciate the fact that while some employees will only be doing BAU activity, everyone must be able to explain the difference between the two.
These practical steps help staff members step out of muddy waters where dynamicstatic quality and strategy-BAU metrics are confused. Their clarity increases the odds that your futuristic plans succeed, while simultaneously ensuring the continuity of previous, hardearned gains.