Note: While reading a book whenever I come across something interesting, I highlight it on my Kindle. Later I turn those highlights into a blogpost. It is not a complete summary of the book. These are my notes which I intend to go back to later. Let’s start!
“I think you should rethink your orientation program for new employees. Provide a better understanding of how the hotel works from a bigger-picture perspective. Give everyone a sense of how they contribute to the whole operation.”
First, he asked them for examples of crisis situations they had been in, and for the next ten minutes helped them come to the realization that teams often perform at their best when their backs are up against a wall. He told the group about his wife’s emergency room experience, which not only was helpful in driving the point home, but seemed to help them come to know Jude as a person rather than just a consultant. As the lesson was beginning to take hold, out of nowhere Jude asked a rhetorical question of the group, one he decided should be a staple of his workshops in the future: “Why wait for a crisis?” It was as though he had just told them about electricity. He continued, with more enthusiasm than he had yet demonstrated to a group of clients. “Why not create the same kind of momentum and clarity and sense of shared purpose that you’d have if you were on the verge of going out of business?”
“Every time you get together for a meeting, you should start by asking yourselves how you’re doing in regard to these areas.” “You mean, we should go through all the metrics?” she wanted to know. This was new territory for Jude, so he was going with his gut now. “No, I’m thinking that you should keep it more qualitative than that. It seems like when you start with data people’s eyes glaze over and you lose them.” The head of marketing agreed. “Either that or they get so wrapped up in the details that they lose sight of the bigger picture.” Lindsay wanted more evidence. “Let’s try it right now, without the data, and see how it works.” Jude smiled and turned to the white board. “Why not? Okay, let’s use a simple way of evaluating these areas. How about rating them one through five?” Lindsay shook her head. “No. Even that gets confusing. If we’re going to keep it simple, let’s keep it real simple. How about green, yellow, and red? Green for ‘on track,’ yellow for ‘not quite there or not quite sure,’ and red for ‘definitely not where we need to be.’” Jude was happy to try it. “All right, let’s start with the first area. How would we rate our current situation in terms of arrivals and departures?” For the next ten minutes, the team went through the five topics, reporting their assessments and then trying to arrive at a general consensus around the final color rating for each area:
The model for combating silos—as illustrated in the fable— consists of four components: • A thematic goal • A set of defining objectives • A set of ongoing standard operating objectives • Metrics
THEMATIC GOAL Definition: a single, qualitative focus that is shared by the entire leadership team—and ultimately, by the entire organization—and that applies for only a specified time period. To avoid politics and turf battles, executives must establish an unambiguously stated common goal, a single overriding theme that remains the top priority of the entire leadership team for a given period of time (see Figure 1). In turn, this thematic goal serves to align employees up and down the organization and provides an objective tool for resetting direction when things get out of sync. Before further exploring the exact nature of a thematic goal, it might be helpful to describe what it is not. A thematic goal is not a long-term vision or, as Jim Collins and Jerry Porras refer to it in their terrific book Built to Last, a BHAG (big hairy audacious goal). Nor is it a tactical metric or measurable objective. While it is certainly a good idea for companies to have both a vision to motivate people over the long term and a set of tactical objectives to guide their daily activities— and most do—the thematic goal lies somewhere in between the two, and I believe it may well be even more important. That’s because it bridges the two by making the vision more tangible and by giving the tactical objectives more context.
Let’s look at the key elements of a thematic goal to understand how this happens. Single In an organization, there can be only one true thematic goal in a given period. That’s not to say there aren’t other desires, hopes, and objectives at play, but none of them can be attempted at the expense of accomplishing the thematic goal. Every organization needs a top priority. When a company is tempted—and most always are—to throw in one or two extra top priorities, they defeat the purpose of the thematic goal, which is to provide clarity around whatever is truly most important. This is best summarized by the wonderfully simple adage, “If everything is important, then nothing is.” Something has to be most important. Qualitative The thematic goal is not a number, and it is not even specifically measurable. It is a general statement of a desired accomplishment. It requires a verb, because it rallies people to do something. Improve, reduce, increase, grow, change, establish, eliminate, accelerate. Now, for those leaders who are disconcerted by the qualitative nature of all this, rest assured that a thematic goal will eventually be supported and clarified by metrics, numbers, and target dates. But this comes into play two stages later in the goal-setting process and should not happen sooner. Time-Bound The thematic goal does not live beyond a fixed time period, because that would suggest that it is an ongoing objective. To the contrary, it is a desired achievement that is particularly important during that period, and must therefore be accomplished in a corresponding time frame. That time frame is usually somewhere between three and twelve months, depending on the nature of an organization’s business cycle and its unique situation. For instance, a university often has a thematic goal with a relatively long time horizon, while a start-up company cannot usually afford to take such a long-term view. Some businesses have fixed costs and barriers to competitive entry that give their thematic goals a longer shelf life, while others can lose momentum or market share almost overnight and are forced to think in shorter increments. Shared The thematic goal applies to everyone on the leadership team, regardless of their area of expertise or interest. While it is true that some thematic goals will naturally fit largely within one particular executive’s area of responsibility, it is critical that all team members take responsibility for the goal, and for doing anything they can to move the company—not just their own department—toward the accomplishment of that goal. That means executives must remove their functional hats, the ones that say finance or marketing or sales, and replace them with generic ones that say executive. They must dare to make suggestions and ask questions about areas other than their own, even when they know relatively little about those areas. And while that may seem to smack of a lack of trust among team members, it is actually a realization that the most insightful questions and ideas often come from people with a more objective—even naive—viewpoint than is possible for experts who are living and breathing an issue every day. But a thematic goal, on its own, will leave an organization confused about what exactly to do. And that’s where defining objectives come into play.
DEFINING OBJECTIVES Once a thematic goal has been set, a leadership team must then give it actionable context so that members of the team know what must be done to accomplish the goal. These are called defining objectives because they are the components or building blocks that serve to clarify exactly what is meant by the thematic goal. Like the thematic goal, defining objectives are qualitative and shared across the entire team. And because they define the thematic goal, by definition they will be bound by time. It’s worthwhile to examine the required elements of a defining objective in more detail. Qualitative Executives are often tempted to overquantify defining objectives because it gives them a sense of closure and certainty, especially after struggling with the notion that the thematic goal was not quantified. However, assigning numbers and dates to defining objectives only serves to limit the involvement of leadership team members who cannot see how they might directly impact a numerical target. Rest assured, quantification comes into play soon enough. Shared: Even though a defining objective seems to be geared specifically to the members of the leadership team with functional expertise in that area, it is critical that all leaders assume a very real sense of accountability and responsibility for achieving it. And even executives with little or no technical knowledge about that objective can and must play a critical role in ensuring that every angle is explored and every distraction is avoided. It is worth restating here: often the best suggestions and ideas about an issue come from people not closely involved in that issue. They bring valuable objectivity, even naïveté, to the table. Time-Bound: When the thematic goal is no longer valid, the defining objectives also change.
METRICS Okay, once the thematic goal, defining objectives, and standard operating objectives have been established, a leadership team can now start talking about measurement. But remember, without these other areas, metrics have little or no context. Even the most driven employees—including executives—will not be as motivated for hitting the numbers if they don’t understand how they fit into the bigger picture. Keep in mind that even metrics are not always quantifiable numbers. Often they are dates by which a given activity will be completed. Trying to artificially assign specific numbers to unmeasurable activities—which is a common mistake among many executive teams—is unwise because it encourages the achievement of arbitrary outcomes that may or may not contribute to the thematic goal. At first glance, deciding on a thematic goal can sometimes seem difficult. The key to finding the right one is to let a team discuss it for a while, without feeling the need to arrive at a quick decision. Oftentimes, a team’s initial guess at a thematic goal will actually be one of the defining objectives that create the context for the goal. For instance, consider a manufacturing company with a defective product that has caused harm to its customers. A child car seat, maybe. Or a bicycle. The first and obvious guess at a thematic goal might be “fix the product.” However, a better answer might very well be “rebuild our credibility in the market.” Certainly, one of the defining objectives will have to be “fix the product,” but if that is all the company does over the course of the following six or nine months, it’s still going to be in a world of hurt. So be patient and constantly ask the question, “is this really the thematic goal, or is it merely one of many defining objectives?” If you’re still having a hard time identifying the thematic goal, you might be overthinking it. Often the thematic goal is deceptively simple. A consultant, who is not so close to the situation, or an employee deeper in the organization, who isn’t so mired in overanalysis, might be the person to give you some perspective.
Case Study: Thematic Goal: A worldwide pharmaceutical company After two of its patents for bestselling drugs expired and generic competitors eroded its market share, a pharmaceutical company acquired a sizable, though slightly smaller, competitor in order to acquire a host of early stage drugs in the emerging anticholesterol market. Complete the merger of the organizations. Defining Objectives: Establish a comprehensive strategy for the new organization. Time Frame: Standard Operating Objectives: Create a single, unified marketing message. Establish a single look-and-feel (logo, collateral, and so on). Eliminate redundant and underperforming products. Merge back-office systems and processes. Nine months. Revenue. Market share by product category. Profitability by product. Employee turnover. Adherence to new product development and approval schedule. Is the proposed thematic goal correct? Who knows? There is no definitive way to answer that question because it depends on what the leaders want to do with the business. This answer certainly seems reasonable, but then again, there could be other answers: acquire additional competitors, cut costs, and so on. What is certain, however, is that there needs to be an answer of some kind so that executives—and employees up and down the organization—can get aligned and moving in the same general direction. Only after a leadership team has established a thematic goal and defining objectives (and standard operating objectives) can it then start determining effective measurements. Most organizations I work with are good at measurements. However, assigning numbers to activities too early only distracts from the overall theme and gives people little context and incentive for achieving those numbers.