The scenarios were different but the challenge was the same.  Whether the organization was suffering from the recession, or undergoing a merger, or experiencing a change in leadership, the common question was: “How do we maintain continuity of strategy and long term focus when our people are focused on short term survival?”

Leadership and change theory would suggest to double-down on the vision at that point.  Keep your eye on the future so you can make sure you’re still headed in the right direction.  Beat the strategy drum so everyone knows it’s still important.

The advice that bubbled up from the group, however, was different.  As change agents and strategy practitioners, they were not in executive leadership positions.  From their perspective, the best thing to do was to help the organization focus on the right short-term efforts.  If everyone was going to be stuck in the present, then they should stay there too and not fight it.

By maintaining focus on the projects and initiatives that were developed to implement the strategy, the group felt they would better be able to weather the storm.  Behind the scenes, they would continue to make sure projects were linked to the long-term strategy.

What is your experience making sure your change initiative survived turmoil?  What advice would you give?

• Multi-directional trust (leadership, employees, peers)
• Transparency and feedback
• Ample, clear, compelling, consistent communication
• High-performing teams
• Data-based decisions
• Accountability to results
• Clarity of vision
• Congruence of personal work with organizational goals
• Alignment between business units and departments
• Breakdown of silos, turf wars, and self-protection
• Atmosphere of mutual respect
• Employee engagement
• The idea of a “well-oiled machine”, efficient standardized processes
• Effective, value-added meetings

I would love to hear what else you might add to this list, and if any of these would actually decrease your success.  Please share using the comments.

A strategy map is a one-page visual representation of an organization’s strategy.  It originates from the Balanced Scorecard methodology, so it consists of the four BSC perspectives:  Financial, Customer, Process, and Learning/Growth.  The “bubbles” are placeholders for objectives – individual pieces of the strategy, like “Maximize marketing effectiveness” or “Create enthusiastic customers.”  The objectives answer what success looks like from each perspective.  Themes, usually in the Process perspective, are groups of objectives with the same general, well, theme.

The template is in PowerPoint format.  Feel free to modify as you wish, and contact me if you would like some help.

As someone with an interest in Balanced Scorecard, you may also be interested in:

• Case Study:  A Fizzled Balanced Scorecard Implementation
• Tips for Leading a Successful Transformation

The premise behind Blue Ocean Strategy is that your current market of customers is only a subset of the customers who potentially need or want your product or service. The current market is called a Red Ocean because of all the competition tearing each other apart. The Blue Ocean represents all the potential customers who are not currently buying because they don’t have any idea what your product or service does or why they might need it.

The solution presented for engaging the Blue Ocean was through Value Innovation.  The simplified method included finding the answers to these questions:

• What causes people not to buy this product?
• What can we do to overcome it?  (What can we reduce, raise, eliminate or create?)

When you look at your organizational change initiative, you might see a similar pattern. There is a subset of the organization who “gets it,” pays attention, and is involved in making progress. And then there is everyone else, who is not buying what you’re selling.  Not only that, but it’s not even on their radar.

Inquiry:  What causes people to not to “buy” your change?

There are a number of other tools in the Blue Ocean Strategy framework that might be helpful to expand your thinking along these lines.  Visit the official Blue Ocean Strategy site for some useful diagrams and more detailed concepts.

As the Senior Manager of Strategy Management Performance Excellence in a large IT department within a much larger corporation, Pamela Santiago has built a team that has become a center of excellence in change management and strategy execution within the larger organization. Her story also shows how change can start within a support unit as a proving ground, then branch out into the rest of the company. Listen for insights on what makes a successful change agent and change management team.

In 2003, I was finishing up the MBA program at DePaul University with the Change Management course, and met with the CEO of Jel Sert (where I was an employee) to see if he had any topics I could study for the class group project. He asked me to look into the reason the company struggled to collect ideas from the workforce. The employee survey conducted showed that one of the culprits was that employees had no sense of direction for ideas; they did not know the most important areas where they should focus their creativity.

The solution was to develop and communicate the strategy to the organization. In the first attempt at strategy development, we made up our own methodology. Although it generated a lot of great discussion, the result was a list of goals that promptly ended up on the proverbial shelf. The following year, a brochure for training by Balanced Scorecard Collaborative crossed my desk. After going to the training, I convinced the CEO that Balanced Scorecard was the solution for developing and sharing the strategy with the rest of the organization.

The Balanced Scorecard is a strategy management methodology that defines organizational success from four perspectives: financial, customer, process and learning & growth. It consists of two key tools: the strategy map, which is a one-page visual representation of the strategy, and the scorecard itself, which includes the measures and targets that form the heart of the methodology. For more information, see any of the books or articles written by Drs. Robert Kaplan and David Norton, the originators of the Balanced Scorecard concept.

By the end of 2004, the executive team had developed the strategy map and the scorecard. Had we finished there, it would have ended up on the shelf like the previous plan. However, as a communications and progress-tracking tool, the Balanced Scorecard methodology provides the means to execute the strategy instead of just documenting it.

The first act of communicating the strategy to the organization was an all-corporate meeting in which the executive team presented the strategy map. Shortly thereafter, each department head conducted meetings with their employees to help link their jobs to the strategy map. On a monthly basis, we published a Strategy Update newsletter and the CEO shared progress at a luncheon.

The executive team met monthly to review the scorecard. The scorecard itself was kept in Microsoft Excel on a shared server. Each metric owner was responsible for updating his piece of the scorecard.

Progress was made on the strategic plan through initiatives – projects that focus on closing the gaps between current measure values and the defined targets. Most initiatives at Jel Sert took the form of process improvement teams, which focused on objectives such as improving operational flexibility, improving order fulfillment, and increasing quality levels.

The Balanced Scorecard effort lasted for about a year from the time the strategy map was completed to the date of the final scorecard in December 2005. In retrospect, I attribute the failure to gain traction on the following issues:

Not setting expectations for leadership commitment
The family that owned Jel Sert had run the company based on gut instinct and industry knowledge – successfully, for the most part – for the previous 80 years. I suspect that writing down the strategy and measuring against it were confining for the owners. In general, it is important to understand the implications of the change for the executive team and make sure they are committed to changing the way they do business. In this case, the executive team had to increase their level of accountability through agreement to a plan, measuring progress, and by communicating their intentions to the rest of the organization.

Not communicating enough
As a privately held company, the owners had to communicate more than they previously felt comfortable. Although employees appreciated and utilized the additional information, there was a limit to the amount of information the owners were willing to share. While everyone received the strategy map, only management had access to the scorecard. Communicating more specific information may have helped focus the organization on achieving key objectives.

Confusion about nomenclature
When using a specific methodology like Balanced Scorecard, it is important to agree on naming conventions, as the language can otherwise be confusing. Having consistent definitions at the executive level will make it easier for employees to have a clear understanding of how to interpret the information they are given.

Getting hung up on perfect measures
Focus strategy meetings on issues, not on measures or targets. It is easy to get hung up on the numbers themselves and not on finding solutions. The measures are sometimes not perfect. It is more important to know if you are moving in the right direction.

Initiative scope creep
Until the methodology has been proven, focus the efforts on gaining small strategic wins. At Jel Sert, once the process improvement program had been set up to improve strategic processes several non-strategic processes were included as well. When the non-strategic project successes were celebrated before any material strategic improvements, the program lost its perceived importance.

Although the formal Balanced Scorecard process is no longer used at Jel Sert, positive remnants remain. Managers talk about strategy, and process improvement teams continue to form around key objectives. Some of the fundamental measures that were created for the scorecard are still used to track performance. The company has thrived in the last couple of years, based on acquisitions and strategic decisions that did not fit into the original strategy map.

Despite this fizzled implementation, the Balanced Scorecard is a great methodology for strategy execution. Like any change initiative, the leaders have to be fully committed to the process – at the beginning and throughout – and change agents need to be vigilant in reducing factors that make the organization lose focus.

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Nine months ago, Jim Ryan, Manager of Strategic Planning at Embarq Corporation, changed roles within the Fortune 500 telecommunications company. Although he kept his job title, his role morphed from implementing strategy – developing strategy, creating measures and scorecards, and rolling out the plan to the organization – to implementing one of the strategic initiatives – creating an entirely new business from scratch within the same organization. From his new vantage point as an intrapreneur, he describes the differences between implementing change within an existing large company and building a new internal venture.

I still have it.  Here are a few excerpts:

CULTURE

Lack of follow through.  We are good at identifying problems but frequently push them aside to focus on other things.  Sometimes we even know the solution and don’t follow through.

INCENTIVES

Sales managers are given a bonus based on accuracy of the total number of cases.  The customer of the forecast is the planning department.  Total number of cases does not help them plan better.  Reward the desired behavior – some measure of SKU or category forecast accuracy.

LEADERSHIP

No one can say anything in front of [name].  He should not be the end of the line final decision maker.  Does he know people are closed-mouthed around him?  His decisions sometimes are reversed at meetings he doesn’t attend.

STRATEGY

What is our strategy?  To sell to anyone who will buy?  Why are we not more discriminating in what we sell?  What is the process that makes us continue to try to sell every combination of goods?

The notebook served a few purposes.

1. A record – it’s easy to lose sight of things that need to be fixed when you either get used to them or move on to something else.  Writing it down preserves the memory, and you can go back and count the number of instances something is mentioned to measure its importance (forecast accuracy was a big deal).
2. An outlet – you can tell by the tone of some of the comments that I was mad or annoyed.  Writing was a way to vent the negative emotion.  It can also help clarify what is the crux of the problem.
3. An integrity-keeper – writing down your thoughts privately can help you refrain from complaining to others.  According to The Transparency Edge, one of the books in my reading list, one way to destroy your integrity is with unproductive criticism or complaining.  (Of course, if someone had found the little blue notebook, that would have been another story.)

Granted, I was not able to fix everything on the list, but I was able to take a stab at some of it.  And that’s really my point.  Don’t keep a journal like this just to document the list of everything you don’t like about your company.  Write with the best intentions to take action and improve the important things.

Inquiry:  What’s in your little blue notebook?  What are you going to do about it?

When Catucci took over as CEO of Unitel, re-branded as AT&T Canada LDS, the company was losing one million dollars per day. Employee morale was low, its products were inferior to competitors, and top managers had all jumped ship. Catucci was the fifth CEO in five years to take on the challenge of bringing the second-largest telecommunications provider in Canada sustainable, profitable growth.

Three Key Drivers of Change
According to Catucci, while there were a number of activities involved in changing the organization, there were three key drivers of success: the strategy management system, strategy councils, and shared compensation.

The strategy management system, with the Balanced Scorecard as the foundation, was a set of increasingly specific instruments to drive action from the vision to the budget. The trilogy of vision, mission and values defined where the organization was going, what its purpose was, and what was important. The strategy defined at a high level what the company was going to do in order to provide sustained profitable growth, and achieve the vision. The business plan further detailed the steps necessary to implement the strategy, and the budget filled its financial role, aligned through the strategy all the way back to the vision. The strategy management system communicated direction at varying levels of detail, all aligned to the primary goal of sustained profitable growth.

Catucci quickly realized that the traditional hierarchy and silos that he had successfully navigated over the course of 30 years was not useful in running the company. Instead, he came up with the second key driver, a plan for better management. Setting up four strategy councils, he eliminated all other leadership team meetings — and excuses. To drive growth, he set up the Business Development Council; for productivity, the Business Process Council; for people, the Professional Development council; and for linking it all together, the Balanced Scorecard Council. Attendance was mandatory, and meetings started and ended on time. Since all other meetings were discontinued, even individual meetings with Catucci, all business was taken care of together in one of the councils.

The third key driver, shared compensation for executives, ensured that everyone on the leadership team was on the same page. Instead of receiving a bonus based on individual performance, the team was given a bonus out of the same pot based on overall company performance.

Deliberate Leadership
Beyond the three key drivers of the transformation, it is clear that there was more to the successful change effort than the mechanics of the key drivers. Effective leadership surely played a part. Within a short time of knowing Bill Catucci, it would be easy to come to the conclusion that he is a natural born leader. Articulate, intelligent and funny, he’s the picture of the charismatic leader. When accused of this, Catucci is quick to reply, “If I’m a natural born leader, then that was an awful waste of training.”

Catucci’s leadership training started at the age of 17, as part of the Reserve Officer Training Corps (ROTC). Learning leadership strategies from military science continued as an Infantry Platoon Leader in Korea. As he held jobs in operations and legal at AT&T in the U.S., he continually read books, attended leadership programs, and learned about successful leaders. Catucci says, “I had so many years of leadership training that if I didn’t become a leader, something was wrong with me.” Perhaps a more apt characterization would be that Bill Catucci became a leader ultimately because he wanted to be one.

Still, he had a few things to learn upon taking over the CEO role. At the top of the list was his personal time management. “It’s easy to think you’re spending time on important things when you’re not,” he warns. Catucci made the effort to be disciplined in his level of involvement in the operation. He struck a conscious balance between knowing what was going on without micro-managing.

As someone who believes that leadership is learned and not inherent, Bill Catucci has advice for how to become a transformational leader. The key to making organizational change happen, according to him, is being deliberate. “If it’s serious enough, make it serious,” he advises. For example, when he started the leadership councils, he made a point of being on time and staying until the end, not always an easy task for a busy CEO. While some members were tardy for the first couple of meetings, they quickly caught on that if he was there on time, they’d better be on time too.

Another important role for a leader is constant communication. “I considered myself to be the CEO: Chief Education Officer,” Catucci asserts. “You can’t assume people know everything.” It’s important for everyone to know the basics and to get people on the same page. The strategy management system helped — on one page, Catucci could explain an individual’s role in achieving the corporate goals.

The Results
In his three-year tenure as CEO, Bill Catucci led what has been considered one of the most successful turnarounds in Canadian business history. When AT&T Canada LDS was sold in 1999, its market value was four times what it had been in 1995 when Catucci took over the reins. Even more telling: employee morale moved from well below average to being in the Top 10% of North American companies according to Hay Associates.

Remarkably, Catucci moved on to prove that the results are repeatable. After leaving AT&T Canada LDS, he headed up global operations at Equifax and implemented the same three key drivers. From 2000 to 2002, shareholder value increased by $3.3 billion and Equifax had nine consecutive quarters of share price growth.

For Catucci, long-lasting satisfaction is from doing an important job and doing it well, and in sharing the success with the people who contributed to it. Clearly, as members of the AT&T Canada LDS class of 1999 demonstrate in their annual celebration, the success of the transformation fulfilled those criteria.

Additional Reading
“Bringing a Company Back to Life,” At Work, May/June 1999.
“AT&T Canada: A New Strategic Governance System Quadruples Market Value,” Balanced Scorecard Report, v2 #1.
“10 Lessons for Implementing the Balanced Scorecard,” Balanced Scorecard Report, v5 #1.

If you enjoyed this article, you may also like:

• Case Study:  A Fizzled Balanced Scorecard Implementation
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