Growing any sized business – large or small – requires everyone to give their best.
As a business scales, the challenges grow more complex.
I had a front row seat experiencing business transformation and growth at market-leading software businesses such as Oracle, Sage, and CA Technologies.
In one of those roles, I was a Senior Vice President of Product Strategy, at CA Technologies. I was responsible for leading the business and product strategy for a $2.4B product portfolio. A portfolio with nearly 1500 people across 13 locations and products in various IT market.
When I took on that role, we had some pockets of excellence, but we were leaving much to be desired.
We had a solid strategy and mostly solid talent…but our execution was weak.
The challenges were not about getting work complete
In a technology, business customer needs constantly evolve. The pace of change is just fast.
Companies in fast moving markets depend on cultures of customer-centric innovation and business agility to remain the market leader. You either do meaningful innovation fast or perish.
As I looked closer, I realized it wasn’t that we were slow within our projects.
We were disciplined and used Agile practices. We delivered projects efficiently.
It was how our organization was structured and aligned towards a shared purpose. A poor alignment was driving a good Agile discipline to just end up doing things faster that didn’t matter to customers.
We were wasting investment on doing projects that didn’t matter to our customers.
We were a siloed organization
Each one had its own agenda and fiefdoms. Often they were in conflict.
Work getting done was a reflection of the structure and not the overall customer-centricity. To our teams, we were lacking a constancy of purpose.
When that happened, our parts undermined our collective progress and got in the way of meaningful customer outcomes.
Setting strategy and overall our business objectives was just not enough at the leadership level.
So, despite having a compelling purpose and a solid strategy why was our organization divided?
Some part of it was a people problem.
Like, we rebuilt much of the product management function and introduced design-thinking for us to be deeply customer-centric.
But the bigger part of the problem was our approach to business operation.
That process was not creating alignment or engagement
In a traditional organization, people often experience the process of setting individual objectives and goals as a “check-the-box” activity. An activity that happens on an annual basis at the start of the performance year.
Occasionally, businesses cascade top-level objectives in a mechanical way.
Frequently, managers and employees are lethargic when it comes to setting them. Often, they map an individual or team level objective to the company objective based on an individual understanding. Often, they complete the activity to meet an artificial deadline.
The ritual repeats itself at the year-end during annual performance review when the front-line manager reviews individual objectives and assign a rating.
Frequently, a rating is a reflection of how hard someone worked and appreciated by the local manager over how a business performed overall against its strategic objectives.
This is a recipe for problems
From a business operations perspective, this is a recipe for creating misalignment and foster silos.
From an employee experience perspective, it is a recipe to foster mistrust in the system and leadership.
In a fast paced environment, it is a recipe for failure.
And it was costing us engagement
As we reached out to our people to collect feedback, one thing became clear: the lack of alignment frustrated many good employees.
In their view, their hard work was wasted as projects were killed mid-stream, or shortly after initial release.
If you’ve led a team of any size, you understand that when morale goes down, everything becomes more difficult.
It starts a downward performance spiral and creates high turn-over.
Our answer: alignment through objectives and key results
At that time, we learned about Objectives and Key Results (OKRs) and its ability to align everyone to a shared purpose.
The OKR methodology was used at Intel and later taken up by Google. Today many forward-looking technology businesses have adopted it.
It is a model that unifies everyone in an organization around a shared purpose and a common set of goals.
It is well explained as a football team example where everyone’s individual goals fit together toward the shared outcome of winning the championship.
OKRs seek alignment to common business outcomes. It takes the priority over individual agendas or busy-ness.
It becomes hard to think in terms of isolated silos.
What really got my attention was the way OKR encouraged excellence
We all have experienced where SMART goal setting practices can often lead people to set lower targets.
It is driven by the traditional performance system mindset that rewards exceeding mediocre goals, and discourages under-achieving on an aspiration goal.
OKRs foundation is based on setting up stretch goals.
It reminds you to set an aspirational goal — if you are already achieving 70% of what you set out to do.
OKRs also encourage an individual to have a small number of meaningful (three to five) stretch objectives. It is about the quality of objectives over quantity of activities.
These are small differences – but they can liberate an organization from a mediocre mindset and reverse downward performance spirals.
Armed with OKRs we set out to change our business operation
We changed our business operation cadence, going from annual to 90 days.
We rebuilt much of the product management and UX practice for us to drive customer-centric decisions.
We re-aligned cross-functional agile team structure busting the product-silos of the past. We aligned them along customer-centric strategic themes that we set out to solve as our shared purpose.
We made deliberate decisions and chose co-located teams to work together on strategic themes. It reduced collaboration and communication overhead on the teams.
Every quarter, we hosted a business review and planning session. A high-energy, and fast-paced, a 2-day session where we objectively reviewed the progress of the last-quarter and agreed on the objectives for the next-quarter.
Every quarter, our organization reviewed and adjusted individual and team OKRs based on the changes in the market, customer learning/feedback and/or our internal execution.
We included every Agile team and all cross-functions representation during these quarterly sessions.
A carefully planned, customer-centric, quarterly business operation cadence, brought the entire organization to work together. It united all of our Agile teams behind a shared mission.
Our incrementalism approach of the past has now given way to innovate and make a quantum leap on behalf of our customers. This is what we had set out to do as our shared purpose.
The lessons I learned went beyond this one experience
As I researched our solution, I was surprised to learn how pervasive the problem is in our industry.
A recent Gallup poll found as many as 70% are disengaged in the US and 85% globally. Only 14% of companies execute their strategy.
“THE MAJORITY OF U.S. EMPLOYEES show up at their job every day without the guidance, incentives, and support needed to perform at their best. Only 33% of employees are engaged, a mere 21% strongly agrees that their performance is managed in a way that motivates them to do outstanding work, and just 18% strongly agrees that employees who perform better grow faster at their organization. These are troubling and alarming discoveries. Organizations have poured significant amounts of time and money into their performance management systems — investments that now appear to be misaligned with the way work needs to be managed.”
80% of the workforce is disengaged at a time when engagement is more important than ever
These percentages are staggering at a time when the average lifespan of a company is shrinking faster than ever.
Every day more businesses are closer to death due to the lack of focused strategic execution.
“In 1965 the average lifespan of a company from the S&P was 33 years.” Forecasts predict it to cut by half and drop to less than 14 years during the next decade.
The moral is clear: You can build an incredible strategy, but without engaged people, it won’t see the light of day.
What hits me is this:
In the past, particularly in a command and control structure, many leaders did not take the idea of employee engagement seriously.
Today, in the digital age, every business is a people-first business.
You have to. Life of your business depends on it.