Take the plunge with your Strategy String

Happy holidays, everyone! As we bustle about getting last minute gifts and attending the myriad of get-togethers, many entrepreneurs, business leaders, and managers find themselves consumed with year end planning.

The start of 2011 is looming. Many organizations have faced immense challenges in the past three years that are shuttering doors and sending hardworking employees into the streets. Yet, some organizations are thriving. How can you beat the odds and make 2011 your best year yet?

Go deep with your Strategy String. When times are uncertain, logic tells us to hold back and play it safe. But setting strategy today requires amping up your competitive edge (as well as being nimble and vigilant, regardless of your organization's size). That means setting aside your fear and telling your story with increased fervor.

For example, Sarah Lateiner of Arizona changed directions when launching her small business. Instead of doing the logical thing and sticking with her educational path of becoming a lawyer, she used a personal experience to launch 180 Automotive, an auto mechanic shop. Instead of competing solely on being another "me-too" service provider, she uses her shop to educate and empower women to take care of their vehicles. The result is a strategic advantage that shapes a deeply-defined Strategy String. With educating and empowering women, her vision, mission, and values clearly show through in everyday actions, and her positioning sharply delivers a competitive edge that no one else can touch. Watch her story.

So take the plunge when crafting your Strategy String: don't hold back. Bring the core of your organization and its passion to the forefront. Use the Strategy String to continuously tell the story to your employees, your vendors, your customers -- all of your stakeholders. If you can substitute someone else's products and services into your vision and mission and it still makes sense, then your Strategy String lacks the depth to highlight your competitive advantage. You can survive without depth, but it's hard to swim when your knees keep bumping the bottom of the lake. Without taking the plunge, your purpose, people, and profits will always be wading in the shallows.

FOR YOUR CONSIDERATION
Does your Strategy String have the depth needed to showcase your competitive advantage? Do all of your stakeholders know about it? If your strategy is missing depth and keeping you from thriving in 2011, call me to schedule a planning session: 206-782-4040.

Order the Strategy String today! They make a great gift for your entire team and your clients. Call me for discount information on orders of 12 or more. 206-782-4040

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• Matt Wilson: Three Steps to Gain a Competitive Advantage (huffingtonpost.com)
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Keep Eager Beavers from Damming Productivity

Image via Wikipedia

Great new team member
or a potential source
of terror and rabies?

Talent reigns supreme in an economy that has shifted from goods-dominated to service-based. Organizations need enthusiastic, bright people with great ideas and the ability to communicate those ideas effectively. But if you're not careful, these bright-eyed, bushy tailed talents can turn into rabid nightmares for your bottom line. [Okay, beavers don't have bushy tails, but let's move on.]

How? New employees can get antsy. Our culture delivers instant gratification in so many ways: instant messages, on demand entertainment, personalized learning experiences, customized jeans. New recruits wonder, "Why can't I get instant results at work? I have a great idea that could save this place thousands/millions of dollars. And I've only been here a few weeks; why doesn't everyone else see it?"

Eager beavers bring fresh energy and ideas that at first glance, could generate thousands, if not millions, of dollars in increased productivity, new opportunities, and cost savings. Leadership, however, must be thoughtful before implementing new ideas. Balancing great ideas with due diligence and proper governance can be a challenge for any growing organization or one that is undergoing a significant change. Eager beavers often don't realize that building a dam at one location might improve the resources and depth of one line of business, but can dry out systems and revenue sources downstream. Each idea should be evaluated for effectiveness in the organization as a whole. And, more importantly, those ideas - and the talent - must fit with your Strategy String and organizational culture. So how do you keep eager beavers from damming the flow of productivity without stifling their creativity?

• Start with a trial period. All new people, including those who have been promoted or moved into new roles, should be given a trial period in which to demonstrate consistent performance. Trial periods also give new team members time to learn and understand culture, stakeholders, and direction. On his first day, make it clear how long the trial period lasts. Define what happens at the end of the trial: what if the employee cannot meet expectations? What additional responsibilities does he gain with successful completion of the trial period? Set a time frame that allows for the eager beaver to learn the needs of his position and that allows the manager to see if he can meet expectations and fit with the culture. The greater the role that person will take on in the organization, the longer the trial period. The last thing you want is a team member who doesn't play well in the swimming hole with others and constantly misjudges the depth of the stream.
• Set clear, realistic expectations. When on-boarding any new team member, establish minimum expectations for him to meet. If these expectations differ in any way from the job description used to recruit him, point out those differences. If expectations can change over time, point out how they will change and how they will impact his career. Managers should also be asking if the minimum expectations are realistic for one person to take on. If you set the bar too high, you guarantee that your talent will fail. Don't let good beavers spend all their time swimming upstream: they can get tired and drown if they don't find another organization's stream first.
• Measure performance each day. Can the eager beaver meet expectations and meet them consistently? Effective performance by anyone in your organization (new or old, eager or resigned) is measured by how well they consistently meet expectations each day. Exceeding expectations is inappropriate if employees fail to meet minimum expectations. Document how well the eager beaver meets minimum expectations, and ask her to document her performance as well. Check in at least every two weeks with her to compare notes on performance. Are expectations being met 100% of the time? If not, should her responsibilities be revised? Or does she lack the capacity to meet the baseline expectations needed for the role? Beavers who cannot swim should not be in the stream.
• Link great ideas to your Strategy String. Ideas are only great if they have the ability to relate. A Strategy String ties culture, stakeholders, and direction to performance. Eager beavers should be able to demonstrate an understanding of culture, stakeholders, and direction so that they generate ideas that are meaningful to your organization. Without this understanding, ideas are created in a void, without understanding of stakeholder concerns and market forces. Eager beavers and their supervisors can waste a lot of time living in the land of possibilities while real opportunities pass them by. Don't let eager beavers divert you into shallow streams and sewer pipes.
• Translate great ideas to performance-driven actions. When the eager beaver demonstrates that she can consistently meet minimum expectations and link ideas to your Strategy String, reward her with the opportunity to put those ideas into action. If she has a great idea for a new injection molding process and can keep up with minimum expectations, accommodate her by making the talent, space, funding, and other resources available to pursue the concept. Set a deadline by which she should present the results and demonstrate how the new idea will deliver long-term positive return on investment. If the candidate can translate the idea into sustainable, performance-driven actions, let her manage or lead the idea. If not, ask that the idea is not pursued further, and encourage her to come up with more great ideas to test in the future. Don't let eager beavers get discouraged: promote creativity and innovation.

Eager beavers and the dazzle of instant gratification can dam the flow of productivity and performance for the core products and services they have been hired to support. If they can show consistently, over time, that they can meet minimum expectations, show measurable performance each day, link new ideas to the Strategy String, and transform those ideas into sustainable, performance-driven actions, trust these energetic sources of talent to be creative and innovative in thoughtful, meaningful, responsive ways that support your initiatives for change and growth.

If you need help getting your eager beavers to demonstrate Vision Driven Results for your organization, give me a call at 206-782-4040 x104.

Manual High School's Strategy String Puts Students at the Head of the Class

As Rob Stein completed his third year as principal of Manual High School in Denver, Colorado, he knew that he had done what he set out to do. Stein managed to perform a turnaround that would make turnaround consultants jealous. In just three years, Stein converted a failing inner city high school into the third highest performer in the Denver Public School system.

So how did he do it? Stein interlaced Manual High School with a Strategy String.

Manual High School had been shut down due to poor performance. In an impoverished neighborhood where more than 70% of its students qualifying for free lunches, Manual boasted the lowest test scores in the entire state of Colorado and was stricken by low attendance and sky-high drop out rates. By organizational standards, the school had given up on its customers (the students) and allowed poor performance to close its doors.

In August 2007, Manual reopened as an Innovation School (a public school that thinks and acts a bit differently). This experimental school clenched a vision that committed the management team and staff to do “whatever it takes to ensure that students stay in school and are prepared for success in college, career and in life.” They then transformed that vision into an actionable strategy.

They began by scrapping the strategic plan. "Strategic plans are never fruitful," said Stein. The long-term strategic planning process of old turns into a massive "to-do list for lower level people" that disconnects from performance results. Instead, Stein and his team of volunteers worked collaboratively to answer, "Who do we want to be?" Through this collaborative process, they created a mission statement and Core Principles to support the vision of doing everything needed to keep kids in school. They linked the Core Principles to performance by creating Core Practices that state clearly how Manual's day to day operations would address performance and drop out rates.

For example, all teachers use daily learning goals to communicate and act on daily agendas. Daily learning goals and other consistent practices ensure that students get bell-to-bell learning and no time is wasted. "You will never see a teacher sitting behind [his] desk," said Stein. At Manual, day to day performance demands interaction. When teachers and students are required to provide evidence that they are reaching incremental and long term goals, there is no time for dilly-dally.

With regulations and reporting required by school districts, success measures require a mind-numbing amount of communication for the team at Manual. But constant, open communication with all stakeholders -- students, teachers, administrators, district leaders, and school management -- breaks through the hierarchy and keeps the Strategy String at Manual High School tightly woven to ensure that each student has a chance at a prosperous future. Students are the number one stakeholder at Manual, and its daily practices constantly remind you of that. Without open communication and participation by everyone involved in doing what it takes to ensure student success (including the students), stakeholders disengage and lose sight of the commitment that they signed on for at the school's relaunch. The same is true of businesses, nonprofits, and other organizations.

Aligning Core Practices with stakeholder needs also meant decentralizing decision making and putting more responsibility into the hands of the principal and management team. Like an entrepreneur, Stein was allowed to negotiate many of Manual's contracts to focus school functions on the needs of its students. For example, weekly access to psychotherapists and counselors often work in affluent, suburban schools. Not so much in intercity schools. If a student is dealing with a problem at home and has to wait a week for support, they are more likely to disengage or drop out than wait for that support. By providing regular resources like counseling services on site each day, the school was able to immediately address student cultural, emotional and social needs and quickly re-focus them on learning. That's not common in public schools. But with efficient management and the ability to negotiate services independent of school district mandates, Manual was able to shape a school that met the unique needs of its at-risk student population.

At the end of the 2009-2010 school year, Manual claimed the title of the 3rd highest performer in the Denver Public School district. This year, Manual will celebrate its first graduating class since the relaunch. By creating a responsive strategy that emphasizes daily check-ins with Core Principles and adherence to Core Practices, Manual High School possesses a Strategy String that will allow it to course correct for any changes to the needs of its teachers and students. Now that Rob Stein has turned over the reigns, I hope that the new principal can keep the string from unraveling. With Manual's collaborative, responsive method for connecting strategy to performance, if the ends start to fray, students, teachers, and community will do whatever is needed to keep its kids in school.

Check out the new movie about our education system:

Waiting for "Superman"

Great information resources for improving our country's education systems

Why clean tech is like a newer model smartphone

In a recent business conversation, I was asked to share my thoughts on what the future of the clean tech industry looks like. The question: are there specific clean tec sectors that our region should focus on developing for the future?

Traditional business practices and economic development focus on key industry sectors to nurture and grow for regional prosperity. Businesses were encouraged to choose a niche and keep their heads down.

Unfortunately, the clean tech sector cannot be segemented as simply as other industries.The information age is changing how we look at industry clusters and what we choose to nurture. The economic development of clean technology should be approached less like an industry cluster and more like a technology development. A cell phone is a great example.

My new Droid X is a master of operations and technology. It combines all of my social networks, email accounts, contact lists, productivity tools, and news resources with an internet browser, navigation system, text messaging, and a host of custom applications. Oh, yeah, there's also a phone.

If a person were putting together a wish list, I couldn't ask for much more. But when it comes to my cell phone, it's not a solo effort of Motorola or of Verizon Wireless. To create and deliver services for Droid X requires dozens companies, working together to create a complete experience. Clean technology promises a similar model.

The clean tech industry aims to reshape the experience of how we use technology and energy in our world. Like Droid's impact on communications, clean tech requires dozens companies working together, each collaborating with its expertise to create a complete experience for global citizens.

What is it going to take to develop a robust regional clean tech industry?

1. Start by asking, What experience would we like to deliver to the global economy? Would you like to lead the world in creating and supporting closed loop systems for waste management? If so, develop a broad-reaching vision that is inclusive of multiple industry clusters. 
2. You've defined the vision, take a look at your current economic landscape. Does your region currently host organizations that already deliver solutions related to that vision? The organizations do not have to be directly tied to the vision (for example, a waste management company). If a nonprofit organization delivers outreach and education to community sectors, they would qualify as one that could assist with future outreach related to your vision. 
3. Align existing organizations. As small businesses and support agencies grow, they need the support of enterprises, governments, and educational institutions. As enterprises, governments, and educational institutions strive to remain relevant, they need the input and support of small businesses and support agencies. Bring these players together to start and further conversations that promote growth and long-term development.
4. Establish policies and legislation that reward growth and encourage collaboration. A business must make it easy for customers to buy their goods and services, or else customers will go elsewhere. The same is true of economic ecosystems. Regional policies, rules, and regulations will determine how easy or challenging it will be for enterprises, small businesses, and nonprofit organizations to do form, grow, compete, and collaborate. Reach out to your customers -- the impacted organizations -- so that they can help inform and shape clean tech policies.
5. Invest in your vision. I know that this can be a difficult conversation in a tough economy, but regional leaders and influencers should be ready to put dollars on the table to support a clean technology strategy.The investors include governments, private industries, and institutions. They should work together with private investment interests, federal programs, and state/local governments and institutions to map a financial plan, determine ROI measures, and build a fund  (or group of funds) that would support long-term returns and investments.

Focusing on the experience instead of the industry subsectors allows your economic development plan to be vision-driven instead of action oriented. The Droid X makes for a seamless communications experience between my many blogs, Twitter accounts, email accounts, CRM systems, social networks, and other web-based systems. Making clean technology and clean energy accessible and applicable to your region requires creating a seamless, integrated experience for your target audience. It will employ thoughtfulness and a true assessment of your region's resources.  A sustainable clean tech strategy encourages collaboration instead of industry segmentation to exceed local needs for export and long-term revenue growth.

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Join us for Focus On: Tying Strategy to Performance on October 19th

Strategy as we knew it in the 20th century is dead. Even the Wall Street Journal reported in early 2010 that organizations must change they way they think about strategy and use strategic direction to drive performance from all stakeholders. So what does strategy look like today and how can you use it to drive performance?

Strategist, author, and entrepreneur Tracy A. Corley shows you in our October 19th Focus On: Tying Strategy to Performance. She delivers practical ways for nonprofits, small businesses, and corporate teams to create responsive strategies that improve communications, drive performance, and deliver results. Register today at www.seattlechamber.com/events.

Tracy’s new book, The Strategy String, will be available for purchase. Pre-purchase your copy on Amazon.com today.

McKinstry Uses a Strategy String to Outpace the Construction Industry

Image by djwudi via Flickr

Who would have thought that an HVAC supplier in the sleepy city of Seattle, Wash., would lead the nation in facilities management services and environmentally responsible policies?

The team at McKinstry surely didn’t have that in mind when they launched in 1960. But they knew that two things would keep them relevant to the future of the building industry: holistic thinking and relationships.

“The greatest efficiencies in a building come not from how its built, but how it’s operated,” states David Allen, Executive VP of McKinstry. They found that by focusing just on the construction phase, they were leaving the clients without the resources and support to ensure ongoing efficiencies and maximization of resources. But to live up to their positioning of “for the life of your building” means moving to a relationship-based client engagement in a traditionally transaction-based industry.

“Focusing on relationships means that you grow slower,” says Ash Awad, VP of Energy and Facility Solutions. Of course, you wouldn’t notice that from the exceptional rate of growth McKinstry has seen, even with the economic downturn. With revenues in excess of $400 million in 2008, expect to see this company’s revenues hit $1 billion in the next few years.

And how are they doing this? McKinstry’s Strategy String focuses on their people. “We have exceptional people here,” says Awad. “We focus on their needs, and the needs of our clients.” The leadership at McKinstry knows that if you want to attract and retain the best in talent and clients, you always have to give the best of yourself.

In McKinstry’s Strategy String, the vision and mission combine with people-centric values and positioning based on a holistic approach to building construction and  management to create the foundation (see their vision, mission, and values at http://www.mckinstry.com/about). Services include construction, energy, facilities management, and consulting. To ensure performance, their internal teams work together to deliver on these areas and guarantee returns on every project. “If we don’t deliver on the ROI savings that we promised, we cut our clients a check for the difference,” says Allen. “We haven’t cut a check yet.”

McKinstry’s people-centric Strategy String allows its team members to step forward with ideas and develop innovative new programs and services for its clients. As a result, McKinstry serves as an industry thought leader, influencing policy and direction for a number of local, state, and federal entities around the country. Their values help people see beyond the day-to-day services and think about the impact that their programs will have on people around the world in the future. That’s why they have such a strong thought leadership team on the issues of environmental impact, energy policy, and clean energy job creation.

McKinstry’s commitment to its core belief in collaboration and people weaves a seamless fabric of communication between strategists, integrators, and implementers. Though the traditional enterprise areas of accountability exist, all leaders and upper managers are accessible to everyone else in the organization. This accessibility results in a deep sense of trust between leaders, managers, and workers. And when problems need solving, they pull together the best people -- regardless of title -- to work together as colleagues to find a solution. Titles more represent a person’s expertise and passion than their “level” within the organization.

McKinstry gets it. That’s why they have been repeatedly awarded as one of Washington’s and Idaho’s Best Places to Work. With the Strategy String tying together all areas of its organization, from the reception desk to the engineering lab to the fabrication shop floor, McKinstry leads the construction and facilities management industry in innovation and performance.

Read more about McKinstry’s Core Beliefs http://www.mckinstry.com/core-beliefs

Order your copy of The Strategy String at Amazon.com.

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Kill the hourly wage

In a previous post, I discussed why CEO compensation should be in the millions. However, the article did not address the disparity between executive and worker pay. Well, here's how to bridge and narrow the gap: kill the hourly wage.

Hourly wages worked well for a manufacturing economy. They allowed organizations to break productivity into easily measurable units. To measure productivity in a manufacturing economy, organizations simple divide input into output to get a quantitative figure. When wages can be broken into hours, hourly input dollars could be divided into hourly output product values to get hourly productivity per worker.

The measure of success in a mentisfacturing economy distorts this formula. You see, when service-centered economies and organizations take a look at input, the speed of the flow of ideas doesn't require hours to bring about multi-million dollar results. Some of the most cost saving measures an organization can take can be conceived in minutes.

For example, a client was in the process of shuttering its business thanks to the 2007 mortgage defaults. During a conversation about how best to fold the company, I asked the leadership to stop the process. They had invested millions in developing technology, systems, processes, and people to deliver their organization's services. They did not have to close their doors, no matter what analysts said. With a bit of creative thinking, I suggested, they could re-purpose those investments and assets to launch new services and recover their losses.

That two-minute bit of advice combined with a four-hour strategy session led to a business plan revamp and relaunch -- and more than $50 million in investment.

What would advice like that be worth to your organization?

Charging by the hour for ideas that are backed by years of experience, personal knowledge, problem solving skills, and collaboration is ridiculous in a mentisfacturing economy. When more organizations are making things with their minds instead of their hands, the time to put together products and services is exponentially reduced. Service industries continue to grow while contributions of goods-based industries to our national GDP are falling. So how do you compensate an employee, vendor, or consultant who takes 3 minutes to explain an idea that brings your organization $50 million in investment and $100 million in revenue over the next two years?

I recommend killing the hourly fee/wage and replacing it with a base salary or flat fee for services. For internal compensation, handsomely reward your employees with a variable value-based compensation model that shares a percentage of the savings or revenue based on the contributions they make to the organization. For example, if your receptionist answers the phone from 9am to 5pm, provide him with a base salary to cover the basic skills and time needed to greet customers and direct calls to the appropriate extension. But if that receptionist happens to handle a customer complaint and prevents a $400,000 per year customer from taking their business elsewhere, provide that person with a 5% customer value bonus ($20,000).

I know it might sound outrageous  at first glance -- receptionists don't receive $20,000 bonuses! But the only way to fill the wage gap is to shift compensation models from time-based to value-based. That process will take time for some organizations. For others, their enterprises are small enough to make compensation changes more quickly. The mentisfacturing economy requires that we reward people for the value they bring to organizations, not the time they put in at their desks.

For another example, one small business could not figure out why its bookkeeper wasn't producing results. The bookkeeper was on site for eight hours, two days a week. When the owner asked to see financial reports, the reports were little changed, if any, from week to week. After some discreet observation, the owner discovered that the bookkeeper often ran into difficult bookkeeping questions. Instead of actively pursuing answers, the bookkeeper sat quietly or sent text messages friends and family until time was up, filled out her timesheet, then left. Legally, the owner was obligated to pay the $55 hourly rate for the time spent on site though no results were produced. The hourly wage model rewarded an incompetent hire and sapped valuable financial resources from other areas of the organization. If the fee for service were value-based, the bookkeeper would have been compelled to produce results or would not have been compensated for the time wasted by both the company and the consultant.

You, too, can shift your compensation model from manufacturing to mentisfacturing. However, our public policies and labor laws need a lesson in intellectual value in the mentisfacturing economy. But your organization can make incremental changes that comply with current labor laws. Implement meaningful performance reward programs that provide compensation for goals reached, savings realized, and revenue generated. These rewards can be based on individuals, teams, departments -- or all of the above.

Base rewards on instant bottom line results for each employee's personal concerns. Cash bonuses mean more money for Junior's college fund and to pay outstanding bills. Additional vacation time means more time with the family and to spend time pursuing personal interests. Do not use "vapor pay" like stock options, futures, and programs that require being vested or could go away if they lose their jobs or the economy tanks. Long-term compensation models defeat the purpose of rewarding every day performance results.

In a mentisfacturing economy, the people, their ideas, and the results they bring override the importance of butts in seats. Just like executives.