This month, I bring you the first in a short series of newsletters that focus on developing your organisation. The ideas and tips below should be useful whether you lead a whole organisation or a team within an organisation. You’ll find further information in my previous newsletters on the Role of the Leader and High Performing Leadership Teams.
Organisational development (part 1)
These days, organisations are in a constant state of change and evolution. In this article we look at the who, why and how of organisational development; in the next article I will outline some processes you can follow to do this work with your leadership team.
The main role of every leader and leadership team is to set the vision and mission – this is particularly important in a new or changing organisation. It’s important to take time to do this upfront to avoid organisational drift and loss of credibility.
- To create direction and clarity of common purpose.
- To gain alignment so everyone sets their own objectives aligned with the common purpose.
- Because you’re more likely to get increased employee engagement (see my previous newsletter on this subject) – the vision informs the strategy and then cascades to people’s own contribution. If they can see how their contribution connects to the bigger picture, employees are more engaged and the organisation is more likely to achieve success.
- For increased focus.
- For accountability.
Coca Cola sum this up beautifully:
“The world is changing all around us. To continue to thrive as a business over the next ten years and beyond, we must look ahead, understand the trends and forces that will shape our business in the future and move swiftly to prepare for what’s to come. We must get ready for tomorrow today. That’s what our 2020 Vision is all about. It creates a long-term destination for our business and provides us with a ‘Roadmap’ for winning together with our bottling partners.”
There are various different ways of developing the organisation, but here is a tried-and-tested process that I’ve found to work:
1. Understand your environment
There are a number of tools and models that will do this e.g. PESTEL, SWOT, Five Forces (Michael Porter), and Blue Ocean Strategy (Chan Kim and Mauborgne). If using the PESTEL and/or SWOT models, do a PESTEL analysis followed by a SWOT analysis. You may choose to follow the Five Forces model – by understanding the five competitive forces as identified by Porter, you can “stake out a position that is more profitable and less vulnerable to attack”. These three tools help you scan and understand the internal and external environments in which you operate. You can then create your niche in your marketplace or your own place within your organisation.
The well-established PESTEL, SWOT and Five Forces models sit within a traditional method of developing organisations; however, there is another school of thought called ‘Blue Ocean Strategy’ developed by W. Chan Kim and Renée Mauborgne, two professors at INSEAD. This proposes that (in some circumstances) it is more valuable to create a new market rather than attempt to compete in an established one. An obvious example is Apple, but Kim and Mauborgne also cite the state-city of Dubai and Nintendo (whose Wii game released in 2006 redefined who plays video games and became one of the biggest-selling platforms in history).
Please ask for my PDF handouts outlining the PESTEL and SWOT models, or for more information on the Five Forces and Blue Ocean models.
2. Identify stakeholders and their needs
The needs of stakeholders inform your vision and mission. It’s a balancing act between you being influenced by them and you influencing them as to what your organisation can achieve. Identify your key stakeholders, then ‘step in their shoes’ and imagine what you want them to be saying about you. What does each stakeholder want and need from this organisation? What do you think about this?
3. Establish the vision
A vision statement outlines an aspirational image of the future you wish to create. When you get your vision statement right, it inspires and gives clarity and focus. If you get it wrong, it loses credibility and gathers dust. See further below for some examples (next month, I outline a process for how to create your own vision statement).
4. Build the mission statement
A mission statement concentrates on the purpose and focuses on the present i.e. ‘who we are’ and ‘what we do’. It provides a tangible bridge between the vision statement and the work that employees do. In my experience, teams find it valuable to use the mission statement to outline the work they do, which also provides clarity to stakeholders about how the organisation adds value.
5. Define the organisational capabilities required and conduct a gap analysis
Define the organisational capabilities you need to deliver your vision and mission. Identify your gaps and prioritise to then inform your strategy.
6. Shape your strategy and strategic priorities for the next 2-5 years
There are various different formats; the most commonly known is the Balanced Scorecard. This provides a format that ensures you pay attention across the most common focus areas such as People/Organisation Health, Process, Technology, Customer and Financial. Teams can either use these headings or adapt them to meet their needs – this is particularly useful for functions within an organisation and I have found that the teams I use it with appreciate its structure, focus and clarity.
At the beginning of my career, a strategy document typically covered the next 10-15 years. Nowadays, most functional strategy documents last for 3-5 years due to the increased pace of change. With emerging technologies, products and markets, even the best analysts can’t always predict what your market will be like in future.
6. Create a dashboard
This is an executive summary showing 5 or 6 key metrics from the strategy that the leadership team should always pay close attention to. These justify the existence of the organisation and demonstrate the value add. As such, the dashboard becomes a useful summary of the key measures to track.
7. Design your organisational structure (optional)
Once you know where you’re going and what you need to do to get there, you know where you need to focus. This will guide you in shaping the organisation structure and model.
8. Write action plans
Detail specific actions linked to the strategy, who’s going to do them and when, over the next 12-18 months. Email me for a Word template that you can fill in.
9. Agree team governance
Decide how your team will work together in order to deliver all this, including: meeting structure; decision-making processes (e.g. RACI = Responsible, Accountable, Consult, Inform); and behaviours.
10. Construct a communications plan
Determine what you want to communicate, to whom, how and when. Ensure consistency and alignment of message with all members of the team. This plan should also include your communication philosophy and an outline of ongoing communication (including celebrating success to reinforce the vision, mission and strategy – both the ‘how’ and the ‘what’.)
N.B. Vision and Mission statements are often interpreted differently, so that some companies write a mission statement that another company would interpret as a vision statement and vice versa. The key is to have statements that incorporate who you are and your vision of the future; the type of work you do to drive this, and the values you live by in all that you do.
Values & culture
Success is dependent not just on what you do, but how you do it, so make sure your organisational values and culture are integral to and embedded within each stage, not just bolted on at the end.
Leaders set the tone and have the biggest impact on how the organisation is run. What are your values and how do they influence your leadership?
- Consider what environment you want to create for customers, partners and employees.
- Determine your values based on what you are trying to accomplish as a business.
- Remember, when the company values are aligned with their personal values, employees are more likely to feel engaged.
I use a tool called CTT to help each member of the leadership team define their top 10 personal values and the company values needed to achieve the vision and mission. More detail on this will follow next month, but please contact me now if you need the information sooner.
Here are some examples of good vision statements:
Microsoft (20 years ago): A PC on every desktop
US Government space programme: To land a man on the moon and return him safely to earth, before the end of the decade
BMW: The BMW Group is the world’s leading provider of premium products and premium services for individual mobility
Apple: Apple is committed to bringing the best personal computing experience to students, educators, creative professionals and consumers around the world through its innovative hardware, software and Internet offerings
Google: Google’s mission is to organize the world’s information and make it universally accessible and useful
Please share this article with anyone you know who might find it interesting, and let me know if you’d like help in developing your organisation.
Next month, we look in more detail at some suggested processes that may be useful for you in working through these steps. Meanwhile, please email me if you are interested in knowing more about any particular step.