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5 Secrets To Double Your Team’s Intelligence

Multiplier leaders behave similarly in 5 ways: they act as talent magnets, liberators, challengers, debate makers and investors. 

  1. Talent Magnets don’t have a shortage of talent, quite the opposite – people line up to work for them.  They have an innate ability to identify what Wiseman calls the “native genius” in each member of their team, naming the talent and then putting it to work for them.  They are not constrained by traditional job descriptions, but rather seek to apply the talent of their team to the job at hand.  
  2. Liberators free people up to do their best thinking.  Instead of providing all the answers, liberators have learned the art of asking the question, facilitating conversations that encourage people to find their own answers.  Multiplying leaders encourage people to think for themselves instead; those employees quite literally report that they become smarter.
  3. Challengers are up for precisely that – a challenge.  The have the ability to stretch people beyond their current capability, thrusting people out of their comfort zones in such a way that the “stretch is met”. As people step into their new zone, they discover a level of capability that they never knew existed.
  4. Debate Makers create the ultimate democracy, convinced that the best answers will come from the group. Instead of setting teams up to fail and fight, Multipliers who facilitate debate give their teams time to research their position, clearly define the parameters and goals, and then “pit their wits against each other” to unleash the potential of what lies in the realm of possibility.
  5. Investors answer the biggest question of all: how do we get people in the business to be accountable for the outcome?  Investors know that real ownership and accountability only comes when the individual or team have made the decision themselves, what Wiseman terms “giving them 51% of the vote”.  A courageous act?  Maybe, but one that will forever change the landscape of your business.

Do you want to access double your team’s intelligence? Click HERE for more information or contact us at multipliers@brg.co.za to book a needs assessment.

 

WHY STRATEGIES FAIL? DEVISING A STRATEGY EXECUTION SYSTEM FOR CERTAIN SUCCESS

“If you can’t measure it, you can’t manage it. If you can’t manage it, you can’t improve it.”
Kaplan and Norton (and many others)

According to Professor Robert Kaplan and Dr Dave Norton, companies that effectively execute their strategy evidence an impressive 50-150% increase in value. Those that don’t continue to battle the odds of success.

The People Barrier

The People Barrier

The desktop research around strategy execution speaks volumes:
• Fortune Magazine cites that “….less than 10% of strategies effectively formulated are effectively executed”
• Harvard Business Review states that “…the prize for closing the strategy- performance gap is huge : increasing performance by at least 50% for most organisations”
• Bossidy & Charan in their book “Execution” cite that “…in the majority of cases – 70% – of the problem isn’t bad strategy [thinking] but bad execution [action]”
• Chris Zook in his book “Profit from the Core” states that “….more than 2/3 of companies had targets that exceeded 9% real growth; yet less than 1 company in 10 achieved this level of profitable growth.”
What desktop research is showing us is that companies that fail to forecast and target success, will generally miss the target. In plain English, the same adage holds true “what gets measured gets done”. And yet despite innumerate measures, companies STILL fail to hit their targets and achieve strategic goals and objectives – and the question “why?” has to be hot on the tail of this statement.

REAL RESEARCH TO UNDERSTAND WHY?

Why is successful strategy execution so difficult to achieve?

Kaplan and Norton have dedicated a lifetime of study to understanding the field of strategy and execution. Why do some companies succeed while others fail even when both have seemingly impressive leadership teams? Is it the thinking, or is it the action? Is it really around metrics or is strategy driven by culture and behaviour change?
The Balanced Scorecard didn’t just ‘appear’ in the halls of Harvard. It evolved as one of the best ways to combat the Four Barriers to Strategy Execution. Kaplan and Norton’s research has identified four key themes, or barriers, that appear to interfere with successful strategy implemenation. Their research also supports that a startling 80-90% of companies FAIL when it comes to strategy execution. Here’s what they found:
1. The People Barrier: only 25 % of managers have incentives directly linked to strategy implementation.
2. The Vision Barrier: only 5% of the work-force actually understand the strategy the organisation intends to execute.
3. The Management Barrier: a staggering 85 % of executive teams spend less than an hour per month discussing strategy.
4. The Resource Barrier: alarmingly more than 60% of organisations fail to link their strategy to a live budget.

The ongoing frustration of wanting to achieve something great often outstrips the company’s ability to implement their thinking. The results can be devastating and leaders can quickly lose credibility having promised and communicated one thing, yet fail to implement on the other hand. While the perception of leadership integrity remains challenged, its important to make clear that often the thinking is in tact, but it’s the execution that is poor.

WHAT TO DO?

The temptation for any business is to try to ‘nail’ all four barriers in one go. That alone may be a strategy, but will probably result in continuing poor execution. Perhaps a better strategy is to target one barrier at a time, and over time, with the goal of eliminating them totally. As each barrier becomes a strategy in and of itself, over time, each barrier will be diluted if not eliminated completely. And, when that happens, the strategic thinking has a chance to surface over the traditional mindsets and restrictions that inhibit success.

THE 10-20% EXECEPTION VS THE 80-90% NORM

Those organisations that enjoy an impressive 50 – 150% increase in value have a formal process for strategy execution. Through this lens they have commonly identified what we can today call the “conventional wisdom” of stratgy execution:
1.FINANCIAL: They recognise that financial indicators are lag indicators and only measure the tangible outcomes of the strategy.
2.CUSTOMER: They revere the customer value proposition and define them as their source of value.
3.PROCESSES: They acknowledge that strategic processes create value for customers and shareholders.
4.LEARNING & GROWTH: They know that aligned intangible assets drive improvement in the strategic process.

ENTER, KAPLAN & NORTON’S 6 STAGE CLOSED LOOP MANAGEMENT SYSTEM FOR SUCCESSFUL EXECUTION

This is how Kaplan and Norton deliberately ensure you overcome the Four Barriers to successful strategy execution.
1. DEVELOP THE STRATEGY: Formulate your mission, vision & values – all the fundamentals. Keep in mind Google’s mission – “To organise the world’s information and make it universally accessible and useful.” And that of Bill Gates: “To put a PC on every person’s desk.’

2. TRANSLATE THE STRATEGY: This means having to create strategy maps and themes with measures and targets, assigning portfolios and providing funding to ensure that you overcome the Vision Barrier.

3. ALIGN THE ORGANISATION: This includes all business units, support units and employees. Ensure you overcome the People Barrier through initiatives that support strategy execution. Never under-estimate the investment required and the power of appropriate change management and communication in strategy execution.

4. PLAN THE OPERATIONS – Devise resource and capacity plans as well as key process improvements that will be required to make sure the Resource Barrier does not hinder the success of your strategy.

BOTTOM LINE : EXECUTE, MONITOR & LEARN

Make sure you properly review your strategy and operations to overcome the management barrier. TEST and review the profitability, devise hypotheses in terms of cause and effect and be alert to emerging strategies, new opportunities and risks. ADAPT where necessary.
This strategy execution system coupled with leaders who affirm their fundamental goals and purpose with quantifiable outcomes, Norton and Kaplan have continuously shown how much value you can derive by implementing strategy maps and balanced scorecards. This is why they have been acknowledged by Harvard Business Review for creating one of the most significant management tools in the past 75 years.
___________________________________________________________________________________________________________________
Dr David Norton is the co-creator of the Balanced Scorecard and leading global practitioner in applying the Balanced Scorecard in both the Private and Public Sector. Together with Professor Robert Kaplan, he has been acclaimed by Harvard Business Review for his significant contribution to the management profession in the past 75 years. More recently Thinkers 50 have ranked them in their Hall of Fame alongside Tom Peters, Kenichi Ohmae, Warren Bennis, Howard Gardner, Henry Mintzberg, Charles Handy, Philip Kotler and Ikujiro Nonaka for their mammoth contribution to business management and leadership.

On the 11th September 2014 Dr Norton will present a full day seminar in Johannesburg on EXECUTING STRATEGY IN A NEW ECONOMY – Balanced Scorecard Essentials.

CUSTOMER CENTRIC METRICS RESCUE RETAILER FROM STRATEGIC ECCENTRICS:

CUSTOMERS TAKE CARE OF THE PROFITS – HOW INTIMATE ARE YOU WITH YOUR CUSTOMERS?

Tom Peters has long argued the case for Customer Centricity. At the 2011 Progress Conference he said; “The magic formula that business has revealed is to treat their customers like guests and their employees like people.” So what is his 2013 take on strategy and leadership? Think of this as “Tom Peter’s Balanced Scorecard”.

Leaders “Do” People

You take care of the people.

The people take care of the service.

The service takes care of the customer.

The customer takes care of the profit.

The profit takes care of the reinvestment.

The reinvestment takes care of the future.

Now, hold that thought.

In The Execution Premium, Dr Dave Norton and Professor Robert Kaplan evidence the magic of Tom’s winning formula. The book cites a case study of how a large retailer, Store 24, turned around their failed strategy by applying what their CEO Bob Gordon, called their Customer Intimacy programme as a key scorecard metric.

The Store 24 strategy, which was called “Ban Boredom”, seemed like a great idea and a sure fire way to differentiate them from their competitors. The original “Ban Boredom” plan was an exciting strategy providing an entertaining atmosphere with fun promotions and frequent themes. This gave store managers permission and discretion to find ways to execute on the strategy. They dressed up in costumes consistent with themes and holidays and activated imaginative promotions with great displays.

NOT EVERYONE WANTS “DISNEY” MAGICAL MOMENTS – CUSTOMER CENTRIC METRICS SAVED THE DAY

Unfortunately this “Disney” approach had an adverse effect. It seemed that while executed with good intentions, the result was failing on the customer intimacy metric.

It was most fortunate that this strategy was predicated on their “customer intimacy” programme. And by getting “up close and personal” with their customers, they were able to quickly abandon the “Ban Boredom” Programme after two years and replace it with a new strategy.

What their “customer intimacy” programme showed was that the customers valued their traditional strengths of good product selection, quick service and a clean environment. They did not value, AT ALL, the experience they were trying to create. Customers were unhappy with the inattentive store employees dressed in costumes and distracted by the ever-changing displays in store.

METRICS ARE KING

You get what you measure! It’s an old adage and one that could not have been truer for Store 24. Using the Balanced Scorecard approach, the retailer was able to assess customer satisfaction quickly. Not only were they able to change direction quickly, they were also able to identify interesting elements for a comeback strategy.

COMEBACK STRATEGY – “CAUSE YOU JUST CAN’T WAIT”

Their comeback strategy, called “Cause, you just can’t wait”, was wholly based on customer feedback. They realised that flawless execution was essential and further research showed the negative relationship between low skilled employees and operating profit. They were able to show consistently that strategy implementation was only effective when done at stores with high skill crews. They realised, too, that the ability for them to implement their come-back strategy relied heavily on employee satisfaction.

BACK TO TOM!

Which brings us right back to Tom Peters, “Treat your customers like guests and your employees like people. You take care of the people. The people take care of the service. The service takes care of the customer. The customer takes care of the profit.” Most readers will acknowledge that this is very much the Disney leadership model the difference, however, is that it doesn’t mean that every customer wants a “Disney moment”. What does ring true is that if you get the people right, the service will follow. Get that right, and the profits are a natural result.

Having acknowledged the metrics, Store 24 brought back their traditional strengths as a key driver of their customer value proposition and replaced the “fun, entertaining experience” strategy with speed and efficiency as their new value proposition.

BALANCED SCORECARD WINS THE DAY

Had Store 24 not had a Balanced Scorecard in place, they may well have pursued their quirky “Ban Boredom” idea for many more years, with inexperienced and dissatisfied store crews having “fun” at the expense of their customer and profits. Scorecard metrics not only determine how organisations measure up on people, products, processes and resultant profits; they also provide a direct link to customer satisfaction.

Dave Norton urges companies to use an “employee-customer-profit value chain model” as their main management system.

Are you measuring the right things? Do you scrutinise the “employee-customer-profit value” cause and effect relationships? If you did, what might that value chain reveal and offer you in terms of a new strategic opportunity with a high execution premium?

_______________________________________________________________________________________

Dr David Norton is the co-creator of the Balanced Scorecard and leading global practitioner in applying the Balanced Scorecard in both the Private and Public Sector. Together with Professor Robert Kaplan, he has been acclaimed by Harvard Business Review for his significant contribution to the management profession in the past 75 years. More recently Thinkers 50 have ranked them in their Hall of Fame alongside Tom Peters, Kenichi Ohmae, Warren Bennis, Howard Gardner, Henry Mintzberg, Charles Handy, Philip Kotler and Ikujiro Nonaka for their mammoth contribution to business management and leadership.

On the 11th September 2014 Dr Norton will present a full day seminar in Johannesburg on EXECUTING STRATEGY IN A NEW ECONOMY – Balanced Scorecard Essentials.

HOW TO MEASURE THE EFFECTIVENESS OF YOUR INNOVATION STRATEGY | “ROH-PEE-D’EE” TECHNIQUES FOR YOUR BALANCED SCORECARD METRICS

In the words of Oscar Hammerstein from the legendary musical The Sound Of Music he recommends;; “When you read you begin with ABC and when you sing you begin with Doh-Re-Mi” – when it comes to Innovation, Dr Dave Norton suggests “when you measure innovation you begin with Roh-pee-d’ee.”

STRATEGIC MEASUREMENT CONTEMPLATIONS FOR INNOVATION METRICSYOUR INNOVATION STRATEGY

If innovation ranks as a key strategic objective it will surely be one of your key metrics on your Balanced Scorecard. Some of the measures to consider are as follows:

  1. A ratio of number of new ideas per 100 employees.
  2. Percent of new ideas selected for funding.
  3. A ratio of revenue or net profit from new ideas divided by the average cost of implementation of ideas.
  4. Aggregate ROI of new ideas implemented.

The most important step is to define your intended results for your innovation. This should be ONE of a number of intentions. An essential Balanced Scorecard principle should be applied here. Your intention or OBEJCTIVE should be concise and defined by a quantitative outcome and time frame.

  1. Intended financial performance.
  2. Increased number of new ideas.
  3. Improved quality of ideas.
  4. New markets / customers.
  5. New products / services. etc…

NARROW IT DOWN | BSC ESSENTIAL

These may be good measures, but fall short in terms of a second key Balanced Scorecard principle. Best practice scorecards only have 1 – 2 performance measures per objective which makes it imperative to select the most meaningful measure for your innovation objective. Your selection criteria could consider the following:

  1. Which of these measures can you influence the most?
  2. Which of these measures will make a notable difference in respect of behavioural change?
  3. Can you access the data easily and accurately?
  4. Can you start from where you are; with what you have?
  5. Can you establish meaningful targets and thresholds?
  6. Will your measure work at both an enterprise and business unit level?
  7. What baseline will you use to determine a known value; your historical performance or industry norm?
  8. Use this measure during all stages of the innovation process.

Once this thinking is applied you should be in a position to select one and not more than two metrics for your Innovation Scorecard.

[pronounced ROH-PEE-D’EE]  RoPDE™ = RETURN ON PRODUCT DEVELOPMENT EXPENSE | ROBUST KPI

Traditional ROI measures, such as discounted cash flow analysis are often owned by the finance team and rarely resonate with the other stakeholders and most often result in weak alignment.

RoPDE™ is a comprehensive KPI for measuring the performance of product/service innovation and development.

How do you calculate RoPDE™?

RoPDE = (GM – PDE)

               PDE

Where GM = Gross Margin and PDE = Product Development Expense

 Here are some RoPDE™ key guidelines;

  1. Establish your thresholds comparatively using Operating Income, EBIT or EBITDA.
  2. Chart your enterprise thresholds by fiscal periods.
  3. Derive your data using standard accounting data.
  4. Apply this at both enterprise level and as a business unit strategic measure.
  5. Apply it at any stage gate or product life cycle process.

When you start at the very beginning, be it in ideation, evaluation and selection of innovation you can evaluate the opportunities using RoPDE™. As your innovation progresses you can compare actual revenue and product development expenses relative to your expected financial performance.

SOURCE: www.balancedscorecard.org/whitepapers  How do I Measure Innovation by Gail Perry and Mark Malinoski

In 2014, BRG & GIBS will present Dr Dave Norton – Live and in Person: Executing Strategy: Balanced Scorecard Essentials. The 2014 programme includes the latest findings and experiences in strategy, measurement, leadership, human capital and cross functional priorities and solutions.

Dr Dave Norton has most recently been honoured by Thinkers 50 in their Hall of Fame sharing this acclaim with Tom Peters, Warren Bennis, Howard Gardner, Charles Handy, Philip Kotler, Henry Mintzberg, Kenichi Omae, Ikujiro Nonaka and his colleague Professor Kaplan, for their mammoth contribution to business management and leadership. Harvard Business Review recognised the Balanced Scorecard as one of the most influential management ideas in the past 75 years.

BARCLAYS BOLD, CONCISE AND CLEAR 5 YEAR PLAN TO BECOME THE “GO-TO” BANK RELIES ON THE BALANCED SCORECARD TO ENSURE SUSTAINABLE SUCCESS

In 2013, Barclays came up with a clear, concise and ambitious vision to become the “Go-To” bank. Antony Jenkins, Group Chief Executive, says, “The Balanced Scorecard is the final crucial piece of our plan; alongside our Purpose, Values and Behaviours to embed the right culture in our business.”

Dr Dave & Prof.RobertProfessor Robert Kaplan and Dr Dave Norton say a successful vision should be concise, simple and have a quantitative target and time frame.

Here are some examples of very BIG, AUDACIOUS, HAIRY visions that are not concise and quantifiable.

Google’s “Organise the world’s information & make it universally accessible & useful”–, Bill Gates “put a pc on every desk”; JFK put a man on the moon and return him safely to earth by the end of the decade.

Barclays Vision “Become the GO to Bank by 2015” couldn’t be more concise and quantitative by time frame. Essential to this success they put citizenship in terms of social and environmental performance at the heart of everything they do.

The 5 C’s of Citizenship at Barclays:

  1. Customer and Client
  2. Colleague
  3. Citizenship
  4. Conduct
  5. Company

Kaplan and Norton, also say that a successful Balanced Scorecard should not be cluttered with non- strategic measures. Barclays essentially have 11 metrics. To date they are on track on 10 out of 11 metrics for 2012/2013 and making progress against 2015 goals. How do some of their metrics stack up?

  1. 94% of almost 140 000 employees attest to the new code of conduct.
  2. 5,2 %  reduction year-on year in global carbon emissions.
  3. In 2013, they delivers 34bn in new and renewed lending – on track to meet 2015 goal of 150bn.
  4. In 2013, they delivered 13,4bn in new and renewed lending to SME’s – also on track to meet 2015 goal of 50bn.
  5. 1150 apprenticeships provided – also on track towards target of 2000 by end 2015
  6. 2,43 million young people supported in developing enterprise, employability and financial skills – on track to support 5 million Young Futures by 2015.

In 2012, when Professor Robert Kaplan visited South Africa, he was asked about the vulnerability of an organisation to replicate and copy your Balanced Scorecard giving them a competitive heads-up. This is what he said.” In my experience, it is not easy to replicate a scorecard as the passion, commitment and innovation in creating it, is crucial to its success.” Nicola Tyler, CEO of Business Results Group says this (and has been saying this for years), “The closer someone is the origination of an idea; the more likely they are to act on it.”

Research has shown that companies who implement the Balanced Scorecard enjoy 50 -150% improvement in shareholder value.

Sept. 2014

In 2014, BRG & GIBS will present Dave Norton – Live and in Person: Executing Strategy: Balanced Scorecard Essentials. The 2014 programme includes the latest findings and experiences in strategy, measurement, leadership, human capital and cross functional priorities and solutions.

Dr Dave Norton has most recently been honoured by Thinkers 50 in their Hall of Fame sharing this acclaim with Tom Peters, Warren Bennis, Howard Gardner, Charles Handy, Philip Kotler, Henry Mintzberg, Kenichi Omae, Ikujiro Nonaka and his colleague Professor Kaplan, for their mammoth contribution to business management and leadership. Harvard Business Review recognised the Balanced Scorecard as one of the most influential management ideas in the past 75 years.