If you are a "performance excellence believer" and your CEO is not bought-in to the framework, prepare to be disappointed, because the one common attribute across all organizations that achieve significant improved results from performance excellence is a CEO who is bought in-and highly involved in the process. The converse is also unfortunately true (no CEO buy-in will mean few or no results).
So how do you get your CEO interested and involved in performance excellence?
You have to focus the entire effort on addressing whatever it is that keeps the CEO awake at night (profits, a critical product launch, customer retention, etc.). Finding out what this is for your CEO is relatively easy as it is totally top of mind for them. When I ask a CEO that question, there is no hesitation in the response. I always confirm that I understand which specific measure he or she is fretting about and what success (i.e. a target) would look like.
Once you understand the issue, a good place to start creating focus on it is during monthly performance reviews. How are reviews conducted today? What do they focus on? If they get too granular, focus only on silo or department issues, or wander too far from the key issue that's keeping the CEO awake at night, it's time to change them.
I used to think that reviewing the organizational Balanced Scorecard (BSC) was the best way to conduct a business review. I still think that works well for department- or division-level tracking of all of the drivers of strategy, but it just seems that a top-level BSC is too busy for most CEOs, who are primarily concerned with one or two key cross-cutting outcome measures.
Of course some CEOs are truly passionate about business reviews and, for them, building reviews around the BSC is great. But from my work with a lot of client CEOs, I can tell you that most CEOs don't want to see an operational review of all departments. Rather, what they want to know is whether all departments and areas are working on that big keep-me-up-at-night problem and, if they are, how well they're addressing their portion of the issue.
Since most organizations are not structuring performance reviews this way today, odds are that most departments are not currently focusing on the right drivers of that key focus area or outcome measure.
How do you create that alignment?
I find that a tool called a "measure structure tree" works great for this part (see example below). Basically, it's a correlation tool that helps define the cross-organizational measures that align best to the CEO’s "insomnia measure." The first level may be simple dis-aggregation for measures like profit. In that case the first breakdown might be profit by business unit. The next level of breakdown is usually by correlation. In other words, what drives profit in each business unit? Those can be measures of volume or expense by type, followed by measures of quality as the structure tree is further populated, finally getting to more and more process-level measures.
The next step is to determine which of the identified process measures are underperforming and deserve improvement resources assigned. Then, teams should use a sound methodology to find and eliminate the root causes.
Finally -- and this part is absolutely critical -- format your monthly performance reviews so they make it incredibly obvious to the CEO that every initiative is indeed focused on improving the most important “drivers” of the "insomnia measure" or problem.
If you'd like to see how we do this really dynamically using ASE 10 (ActiveStrategy's newest software release), let us know. It's making lots of CEOs rest easier (and become true believers in the power of performance excellence).
