Do you pay attention to C-level vision laid out for rank and file employees at “all hands” meetings?
Early in my career (circa 1990) I viewed corporate vision as management fluff until cost cutting began to hit close to home and I saw myself as a potential target. During his state of the company address, our CEO raised concerns about the company’s rising cost structure, and shortly afterwards the company announced that it would be offering severance packages to encourage long-time employees with high salaries to leave. When that didn’t cut costs enough, more draconian measures were taken. There were Reductions In Force (RIFs) affecting all levels in many departments. As the number of middle managers dwindled, remaining managers were given increased span of control.
As the economy slowly builds steam, more companies will exit cost-cutting mode and gear up for growth. Does C-level vision seem to be changing? What do you hear your CxOs emphasizing in strategy and vision statements these days? I used my CIO’s vision to motivate a small team to develop a plan that overtime is saving my organization tens of millions of dollars. Since our mission was tied to CIO vision to reduce operating expense, I took the opportunity at the beginning of each meeting to remind the team of this important fact. Quantifying cost savings, the scope of work, the resource requirements, and the schedule were our initial focus. Naturally, the team’s enthusiasm grew as we began to see more and more how our work would improve the organization. Read my article to learn how you can do the same (click here). Or, perhaps you’ve led a quality or process improvement initiative. Kindly share your experiences.
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During a period in the 90's whilst working for Raychem Corporation the organization was introduced to the concept of goal congruence by the COO. The science of management by objectives was introduced in the 50's by Drucker. Later in the 90's Kaplan and Norton introduced the balanced scorecard as a mechanism to achieve goal congruence. Balanced scorecards as a management tool to achieve objective congruence has been applied in supply chain operations as a tool to manage outsourced operations.
ReplyDeleteIn the Raychem model in the 90's the balanced scorecard was used by the C-level team to direct goal setting in the organization. Effectively each function, each department created an objectives cascade, with metrics, that aligned with the C-level goals for the company. The relative balanced scorecard weighting of the organization set objectives was determined by C-level in discussion with departments who set the objectives.
The system as described ensures;
Organization objectives are in line with the C-level vision for the company.
Department objectives are supported by C-level.
Metrics are in line with C-level goals.
Alan Bishop
Principal at Scoord
Hi Alan,
ReplyDeleteI see you have been around the block when it comes to goal congruence between C-levels and departments. What were some of the supply chain metrics at Raychem? Was Raychem successful in meeting the measurable results? I wonder if you could share what you can recall about corporate performance results during this time. Sounds like corporate performance might have seen improvements . . .
Thanks,
Phil
Hi Phil
ReplyDeleteDuring the period of scorecard introduction a number of Raychem's product divisions were transitioning into new markets. In the division that I was working in we were seeing a shift from a traditional market base of defense and aerospace components to a new market in automotive components. As a result the shift in market had two significant consequences, first, product margins would be tighter and second, on time delivery performance was going to be more sharply focused.
These significant strategic forces required a tightening of a delivery reliability with performance results being fed back to Raychem by the automotive customers. In addition inventory levels were reduced, to achieve a lower cost performance. To facilitate this production cycle times were targetted for reduction enabled by kanban operating systems.
These initiatives were successfgul and enabled Raychem to transition to the new markets and cost efficiently meet the demands for service reliability.