'The Alignment Factor': Manage the Present, But Focus on the Future
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This is the sixth in an exclusive series of articles from Total Alignment authors Riaz Khadem and Linda Khadem titled "The Alignment Factor." Check back in every Thursday for new installments.
Every company watches its numbers. Whether quarterly or monthly, numbers are expected to show improvements over budget and prior year. Still, a preoccupation with improving them every quarter might be counterproductive. Punishment for missing short-term (i.e. present) targets can produce negative effects on the organization and cause executives to make decisions for the short term that sacrifice the company’s long-term (i.e. future) health.
Ideally, accountability for present operations in multilevel organizations should be delegated to the lower levels. This means focus on the present should also be delegated to lower levels. Upper levels of management should avoid a tendency toward spending their time watching over the lower levels. Micromanaging is disempowering and counterproductive. Not only that, but if everyone is watching the present, who is taking care of the future?
Focus on the future
When we say "focus on the future," we mean spending time to create a vision for the future of the company, beyond the next quarter or even the next year. If your organization has already gone through the steps to define a mission and vision, this should be the focus of the top team. If these don't currently exist, look at our article on this theme, where we outline a process that involves the team to create and articulate a shared mission and vision. Focusing on the future involves the development and execution of strategies and strategic initiatives that will pave the way towards reaching your objectives. The development of strategies is the product of a process that includes sound analysis rooted in solid data on market trends, projection of demand for existing and new products and services, along with many other factors, including technology, the economy and social conditions.
Who in your organization has this focus on the future? Your answer might be the CEO or the owner/entrepreneur. That's great, but it's not enough. Although they would not all be involved to the same extent, the entire upper-management team should have appropriate involvement in the execution of strategic projects. The challenge in many organizations is that the top levels are immersed in the day-to-day operations and even firefighting. Often, they are under such pressure to meet their numbers that they have neither the time nor the energy to focus on the future.
Focus on the present
Focusing on the present means putting your energies into the day-to-day operations of the company to get orders booked, processed and out the door and to convert this activity into cashflow. To do this effectively, attention needs to be focused on the operation of the company’s processes that deliver your value proposition. With adequate training and support of technology, your resources closer to the front lines will be able to handle them.
A guide for present versus future
A simple visual guide can assist in clarifying the two viewpoints we're recommending. It is not a precise guide, only a conceptual framework. Imagine two triangles side by side, one inverted as shown in the figure below. Suppose the left triangle represents the present and the right one the future. Suppose the CEO is at the top vertex, and the frontline workers of the organization are at the base.
If you make a list of the Key Performance Indictors (KPIs) of your business and assign accountability for each KPI to the lowest appropriate levels in your organization, they will fill the triangle on the left. For example, sales revenue would go down to the salesperson, percent sales margin might go to the next levels up, and market share might be at two levels above the salesperson. If you take the KPIs related to production, units produced would go down to the production line, percent line efficiency might go to the next level up, and percent rejects could go up two levels above the production line.
When you complete the exercise with all your KPIs, you will find that the frontline workers will steward the lion's share of operating the processes on a day-to-day basis. The length of the base represents the extent of engagement in the present.
Now, let’s look at focusing on the future. Make a list of the strategic projects you need to implement to execute your company strategy. Then, assign accountability for each project to the highest appropriate level in your organization. The assignment of project accountability will fill the right triangle. The top levels will bear the lion’s share of the accountability for projects that deliver your future. As you go up from the frontline workers toward the CEO, the extent of engagement in the present at each level must decrease while the engagement in the future must increase.
What we have witnessed in many organizations, however, is entirely different. The top levels in many large companies spend as much as 80 percent of their time on the present, which leaves them very little or no time for the future.
The world is going through significant changes, and the pace of change is increasing. If the top levels don’t channel their creativity on anticipating the future and setting strategic projects in motion to prepare for it, who will?
Requisites for success
The assumptions we are making here are that the existing processes in your company are well defined; the human resources assigned to operate them are fully competent; and that you have an adequate information system to alert performance exceptions from the optimum performance and escalate them to appropriate upper levels of management. Then, the upper levels can afford letting go of interfering in the operations except for dealing with the exceptions and can focus their energies on assuring the successful future. They will delegate the present without losing visibility and control, as they manage the future with the right strategies in hand.