Take It Up A Notch
The point of Strategy or Performance Management isn’t Monitoring. Monitoring and its counterpart Evaluation, are only useful if they lead to better decision-making. Decision-making is best undertaken in small groups of peers, with informed, frank debate and effective follow-through.
Effective decision-making is enhanced and improved through meaningful performance, and contextual (economic, market, technological, etc) data. But, Performance Data and associated Monitoring & Evaluation can quickly become noise in the system, or a ‘busy distraction’ without some kind of formal, informed decision-making mechanism.
A metric I would suggest for all Strategy & Performance Management approaches, is the “Number of Significant Decisions Made” using the process and the data. Process compliance is good, effective decisions resulting from the process are essential.
Of course, ‘Stay The Course’ can often be a significant and effective decision, but it needs to be explicit, as an output from a decision-making forum, informed by current contextual and performance data.
The reluctance of large organizations to step back on a regular basis, set up their ‘chess board’ and challenge their strategic assumptions and decisions, is a common source of underperformance. V Kasturi Rangan, in his insightful and well researched HBR article ‘Lofty Missions, Down to Earth Plans’ describes well this condition in nonprofits:
The combination of stickiness to the mission and stretchiness to market demands can undermine a nonprofit’s effectiveness. The stretchiness keeps it very busy on a day-to-day basis; it’s constantly executing programs and working to raise funds. But in a strategic sense, the organization moves very slowly because the stickiness holds it in place. Before it can move forward, it must unstick the inertia at its center and then creep forward one step at a time, carrying with it all its baggage.
As a consequence of this stick-and-stretch syndrome, nonprofits often develop anaerobic life styles. At one extreme is the bloated bureaucracy: It may have some hardworking parts, but as a whole, it’s slow moving and survives because of mission legitimacy, not mission performance. At the other is the ever-busy nonprofit characterized by action paralysis. The organization is so busy executing the day-to-day stuff, raising money, implementing programs, and so on, that it never steps back to consider the full implications of its actions.
‘Lofty Missions and Down to Earth Plans’, V Kasturi Rangan HBR March 2004
The Stickiness is caused by a reluctance to regularly revisit strategic assumptions and associated decisions, while Stretchiness is the result of remaining entirely focused on operations and tactics, and either not having a Strategy, or having an irrelevant one.
V Kasturi Rangan proposes a four-step strategy process ‘The Strategy Stairway’ which is analogous to the Kaplan/Norton approach of Strategic Destination, Themes, Objectives, and Programs.
The fundamental problem is that these agencies don’t have a strategy. They have a mission, and they have a portfolio of programs, but they have hardly made any deliberate decisions regarding which programs to run and which to drop or turn down. What most nonprofits consider strategy is really just intensive resource allocation and program management activity.
If a nonprofit doesn’t develop the operating mission and the strategy platform in a disciplined way, its management tends to think every program is important.
V Kasturi Rangan, HBR March 2004
In our experience, the very same syndrome happens in government agencies and mid-to-large private sector organizations alike. The source we’ve witnessed, is the lack of a formal strategic decision-making discipline among the various leadership levels. Significant decisions at this level fall into two major categories:
1) Are our strategic assumptions and priorities still valid?, and
2) Is this activity/investment the best fit within our current agreed Strategy and available resources?
Without deliberately challenging ourselves on these two levels on a regular basis, the stickiness and stretchiness syndrome is bound to take root in your organization, and eventually negatively affect your performance.
Making the first move towards putting a ‘four-step strategic process’ in place, is a critical one. But, embedding the discipline to regularly make the tough choices and revisit the big decisions is an equally bold but critical endeavor towards your successful mission performance.
Neil McDougall is the Managing Director of Dubai-Based CalShea Management, and Published Author of the article “Promoting Economic Development: Strategic Agendas in Action”, Harvard Business School Publishing, November 2007