As our clients head off into another financial year, with freshly minted strategies and sharpened focus, we’d like to share our insights into what really drives successful implementation.

Disciplined start

• Set and keep dates for your first three strategy review sessions.
• Ensure review sessions are focused on the results published in the monthly reports.
• Make sure you have steps in place to break out of the inertia of last year’s focus and priorities.
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Focus on lean reporting principles

• Output-based reporting.
• Just enough. No fluff. Facts first.
• No specialists required.
• Owner of each strategy is responsible for producing their own report.
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Right reporting framework

• Hierarchy of strategy, activity and owners
• Accountability clear, boundaries spanned
• Disciplined discarding of measures that no longer represents levers of change
• Stop reporting in silos
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Right tool

• Strategy specific
• Supports lean reporting principles
• Cloud-based
• Fast, no fluff summaries
• No formatting distractions
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Readiness for positive conversations about performance

• Expectations set up front
• Readiness for transparency of performance
• Openness for change
• Problem-solving and collaborative mindset
• Ready to recognise and reward progress
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After another intense kick off to the new financial year in our strategy work with clients, here are a few of the tips we give CEOs about how to spot whether their strategy work is off to a good start or not. Consider addressing them at next year’s strategy workshop to make sure your team can simply ‘get on with it’ when they get back to the office.

Here’s what to look for in the critical first three months of a new reporting year:

• Your leadership team needed reminders to submit their monthly reports on time
• Most of your team have reported activities that are mostly off-strategy
• Your leadership team says they don’t have time to do their monthly reports
• The monthly summaries are reporting on inputs, not outputs or outcomes
• Your leadership team wants to hire a specialist to prepare the monthly performance reports
• Your leadership team blame your IT systems for not giving them the right information.

If any of these signs are emerging in your team, it’s time to call time-out and go back to your strategic intent. If it still looks right, then you’ve got some performance reporting capability gaps and these gaps need to be the focus of your immediate effort. Don’t get caught in the undertow of last year’s behaviour and end up delivering last year’s performance.

There seems to be an inevitable tension in leadership teams, after a new strategy is completed, about what to report. The measures that meet the needs of the board or executive committee are not often the same measures that the leadership team want to be judged by. The tension seems to arise from the need to prioritise so that just a few key indicators are included. Can the leadership team, who just agreed on new strategic direction, also agree on how progress will be measured? This critical question should always be asked and answered before the team leaves the collaborative atmosphere of the strategy workshop. The truth is that their understanding of the strategy is demonstrated by their agreement on how to measure its performance.

The practical starting point for choosing the right measures is that different performance information is reported for operational and strategic aspects of your organisation. There are always some indicators that have been reported in the past but which no longer represent value creation or strategic progress. Be disciplined: these measures need to be discarded. When choosing between measures, you need to agree a set of measures that present monthly performance as an integrated view of progress toward the year’s goals. The challenge of prioritisation is to reach the smallest set of measures that will give you relevant, accurate, actionable data about strategic progress.

This process of refining, clarifying, prioritising and agreeing measures is a critical leadership task.

• You’ll know it’s NOT working when all you have is measures for each silo plus the same financial measures you’ve been reporting on for decades. This shows that the team has failed to understand the focus and levers of strategic change.
• You’ll know it’s working if you have a set of measures that demonstrate progress towards the new goal as well as the few key measures of sustainable organisational success.

Prioritising is not an easy task, as each measure represents an underlying set of organisational processes, values and activities. Adding or deleting a measure will cause ripple effects in the leadership team and throughout the organisation. But when you get the right set of measures, that together create a focus on only those levers that will create sustainable, strategic change, the benefits are substantial. When the leadership team is confident in the measures of performance, they can ‘do’ strategy every day because the connection between action, measure and consequence is clear.

We assume managers and leaders know how to write a concise, outcome driven summary of strategic activity…but our experience is that people are still more comfortable reporting inputs. It’s common to hear these examples when we review reports being prepared in the early stage of a strategy:

• “Our team participated in four industry-wide task force meetings”
• “We’ve completed 100% of our targeted customer visits”
• “The customer research report has been completed.”

When reporting is lean, bare and stripped down to its essentials, progress is clear. You get depth, clarity and crispness in what has been achieved. This saves time and effort in preparing to make decisions for the next period, and allows leaders to see the strategic consequences of their decisions in a shorter period of time, reducing the cost and risk of remediation. More importantly, you can capture the good work that often doesn’t get seen. Using a lean reporting method is an ideal opportunity to identify stand-out performers and role models for your organisation. They are the wind in the sails of your organisation and too often they’re weighted down by the non-strategic busy-ness of others.

We help people to say what they’ve done and how they contribute, in terms of outcomes directly related to the strategic framework you’ve all committed to. We can help you get rid of all the filler and focus on the few key things that will drive the success of your strategy.

These days, collaboration is essential to delivering any strategy, as well as being a foundation behaviour for high performing organisations. We spend so much time encouraging collaboration in our organisations, building  cross-functional teams and flexible work practices, so that we can break out of ‘silo’ thinking that lowers productivity, effectiveness and morale. So often, we handcuff ourselves, at the same time, by continuing to report in ‘silos’. Usually this is because we have inherited a set of performance measures that we forget to question, because they still seem relevant, even if they don’t help us keep a laser-sharp focus on the latest strategic direction. Sometimes this is because the ripple effects of changing organisational KPIs are far-reaching, difficult to manage and downright threatening to the leadership team.

Without a radical overhaul of functionally driven reporting, collaboration will always take second place. The old chestnut persists: what gets measured, gets managed. If your organisation wants to improve its strategic performance, the research all points to adding collaboration as a strategic capability. If you want to add collaboration as an outcome to your performance this year, the very first place to start is with your reporting framework. Get the architecture of your KPIs right and you will be surprised at how quickly collaborative behaviour starts to emerge.

There’s many an anecdote in executive circles about strategic performance being hobbled by the IT crowd. This lament is common across all types of organisations. It’s convenient, but not compelling. Here’s our checklist for getting IT off the agenda and performance back in focus:

• Insist on a strategy-specific tool, not a module bolted onto an operational reporting system. Sucking up data from complex operational systems entails compromises that distort the clarity of focus you need to get strategy done. Choose a tool that can supports lean, common-sense, intuitive use. The freedom from tool specialists, gatekeepers and complex feature menus will put wind under your wings.
• Implement lean reporting principles  Use ‘just enough’ measures to show you where you’re going. Do the hard work to identify the levers of change. Delete last year’s measures. Start from a clean sheet each year. If you don’t actually know what the levers are, run some fast, focused experiments to find out.
• Fast, no fluff reports. No more powerpoint packs. No formatting distractions, no room for anything other than reporting on activities and analyzing data that’s already there.
• Cloud-based. Choose a tool that can be accessed anywhere, anytime and updated in real time.

You need a strategy that is supported by clear principles for decision-making. You need a reporting tool that is supported by clear data and minimal distortion. Get it sorted and watch your performance soar.

Has your new strategy has been endorsed and published? Have the key messages filtered down to your teams ? Has your first quarter performance been reported? Congratulations! Now you’re ready for the conversations about performance. Each conversation should create a powerful connection between what you’ve envisioned and what actually happens day-to-day in your team.

Here are some of the key items on our checklist for leaders to improve their conversations about performance:

• EXPECTATIONS: Did you set expectations about performance when you presented the strategy to your team? Have you clearly linked team member performance to your strategy so that each person understands the part they play in delivering a specific strategy?
• FACTS: Are you using fact-based reports to evaluate performance? Ideally, you should be able to review performance against a strategy by referring to activities and outcomes reported monthly. Three months data is more than sufficient to evaluate progress and take action to address performance gaps.
• TRANSPARENCY: Is your team ready for transparency of performance data? In a lean reporting system, anyone responsible for a strategy can see the monthly reports. With clear, unambiguous measures in place, poor performance should be easy to spot. Team members need to have a mature, problem-solving attitude so that they can address performance issues as soon as they emerge
• READINESS FOR CHANGE: Is your team ‘up for’ change? In the first quarter of a new strategy, it’s usually obvious which are the more difficult strategies to implement. Change is always difficult. Your team needs to be ready for tackling these strategies, often in new and unforeseeable ways.
• MINDSET: Does your team have the problem-solving and collaborative mindset needed to tackle the difficult and unforeseen challenges of implementing your strategy? Is there a way you can test this in the first quarter, so that you’re confident of their response to a practical strategic challenge when it emerges?
• RECOGNITION: Is your organization ready to recognise and reward progress? Lean performance reporting reveals the hidden talent in your team. When you see an outstanding performance, you need to reward it and celebrate it. In this way, you build momentum and confidence to make the change that your strategies demand. Make sure these mechanisms are in place before you begin your performance conversations. It’s well known that delays in reward and recognition send mixed signals to the organization, undoing the confidence and motivation that a new strategy, communicated well, achieves at the outset.

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