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Setting Direction

Your first role as a leader is to set a clear direction for your organization and people.  Here is a story that illustrates the importance of setting direction.

As I was walking down the street, I saw three bricklayers working on a wall.  I asked the first bricklayer, “What are you working on?”  “I’m laying brick,” he replied.  I asked the second bricklayer the same question, “I’m building a wall,” was his response.  When I asked the third bricklayer, he answered “I’m providing security for a family.”

A clear direction makes everything else relevant.  It provides context for Execution and increases the engagement of your people.

Executing

However, Setting Direction isn’t enough.   We’ve worked with many companies that had great missions, a tremendous vision, remarkable values, and brilliant strategies, but they were unable to achieve their goals.  Executing strategy requires aligning the organization’s resources, culture, and core competencies to the strategies associated with the future desired state.  Currently, your organization’s resources, culture, and capabilities are aligned to your current results.

“A vision without the ability to execute against it is probably a hallucination.” (Stephen Case, Former Chairman, AOL Time Warner)

Engaging People

In order to execute your strategies and achieve your vision, you will need other people to be engaged.  Studies show that engaged employees are 43% more productive than their peers (Watson Wyatt Worldwide, 2002).  The bad news is that only 29% of employees are actively engaged at work (Report, 2008).  This impacts retention, absenteeism, safety, and productivity and is estimated to cost the US economy between $254 billion and $363 billion annually (Gallup).

So there you have it.  Your responsibilities as a leader are to:

1.      Set clear direction,

2.      Execute strategies efficiently, and

3.      Engage and energize your people.

Which of these roles is more important?  Trick question.  You must do all three, and you must do them well.

Close your eyes for a minute (after you read this, of course) and think about a job you had that you really loved.  A job that you couldn’t wait to get to in the morning, and, on your way home, you felt good about what you accomplished during the day.  I hope you’ve had a job like that, and I hope it’s the job you have now.  Now close your eyes and think; what made that job so special?  Why were you engaged in your work?

I’ve asked this question to thousands of people in my workshops, and the most common responses are:

• I was good at and knew what I was doing
• I understood what was expected
• I was able to make a significant contribution→
• What I did mattered
• I liked what I did
• I liked the people worked for and/or with
• I received recognition for my accomplishments

Notice what is missing from this list.  Rarely does anyone mention money, and, if they do, it is in the context of being fairly compensated.  The job I hated the most in my career paid very well (that’s the only reason I stayed).  The truth of the matter is that money will never make you love your job.

So how do you engage your people and build a culture of commitment?  Here’s the number one way (with a tip of the hat to Victor Vroom and his Expectancy Theory):

Effort → Performance → Valued Result = Commitment

What this means is that your level of Commitment to anything is equal to your belief that your Effort will translate into Performance that will create a Result that you Value.  Anyone who has picked up a musical instrument or tried to play golf has felt the truth of this equation.  Let’s take the guitar for example.  If you are going to be Engaged in trying to play the guitar, you must believe that your Effort will enable you to string together enough chords (Performance), so that you will be able to play a song that people will recognize (your Valued Result).  If you keep putting in Effort, and it doesn’t translate to Performance and create the Valued Result, you will quit.  No one will keep hacking away at a guitar if they never get it to make music. This is why there are so many guitars gathering dust out there.

So if our Commitment equation is true, what can you do to increase the Commitment and Engagement of the people in your organization?  You guessed it; you work backwards. The number one way to help people be committed is to define for them the Valued Result (1).  Once you define the Valued Result, you can then work together to determine the Performance that is required (2), and they can decide if it is worth the Effort to get there (3).

Effort←Performance←Valued Result = Commitment

So what happens if you don’t define the Valued Result for your people?  If you don’t define it for them, you leave it up to them to figure it out (and usually chew them out when they get it wrong).  Most people want to do a job that they are proud of, where they feel they contribute, and where they believe in the company they work for.  They don’t do a bad job on purpose; the do a bad job because the guessed wrong on what the Valued Result is.

It is truly that simple (notice I didn’t say easy).  So why don’t more people do this for their employees?  The number one reason is that they don’t know what the Valued Result is.  So you have to start by figuring out the Valued Result for everyone in your organization.  Once you do that, you are on your way to a culture of commitment and employee engagement.

“So you don’t execute well?”  I asked.

“No we don’t.  That’s our biggest problem.”

“Then how do you know you have a sound strategy?”

In my first post, I stated that strategy is paramount to the success of your organization.  I had a few people question me on this, and would like to clarify and expand on this idea.

Strategy is primary to the success of your organization.  And in primary I mean it should be done first and communicated well.  A well articulated and communicated strategy is critical to the success of your organization, but you’re not going to get it 100% right the first time.

This highlights the importance of execution.  The second role of leadership (after setting direction) is execution, and it may be your most critical duty as a leader.  If you cannot execute effectively, how are you going to measure the effectiveness of your strategies?  How do you know you have a good strategy if your execution is lacking? This image illustrates what I’m talking about.

The desired state is, of course, the upper right quadrant of the image.  We have Good Strategy and Good Execution.  We get a smiley face for this, and everyone is happy and productive.  But where is the next best place to be?  Good Execution and Bad Strategy is the second best alternative. Good Execution allows us to make modifications and improvements to our strategies (to go from A, to B, to C).

If you don’t execute effectively, how will you know if your strategies were any good or not?

We call the left side of the image (Bad Execution/Bad or Good Strategy) the Dark Side.  And, as we all know, you need to stay away from the dark side.

So there you have it.  Two of the three leadership roles.  First is Setting Direction (Strategy).  Second is Execution.   You’ve got to do both to be an effective leader.

One concept that seems to run through all of his books is that “It is more important to be clear than it is to be right.”

Is it true that being clear is better than being right?  At first I didn’t think so, but what I have found, especially since I’ve been married, is that if you are clearly wrong you tend to find out sooner that if you are generally right. Our goal, especially in the current economic environment, should be to fail early and fail cheap.  You’re not always going to be right, and if it is more important for you to be right than clear, you tend to muddy the waters.  You create goals for yourself and your company that leave room for ambiguity.  You delay decisions until you have that one more piece of data (and there is always one more piece of data).

I would be interested in your thoughts.  Do you agree that it is better to be right, or clear (I know it is better to be both, but if you had to pick one)?

“That depends,” I said, “what are your goals?  Your strategies?  Your strategic plan?”  She looked sheepish.  “We don’t really have one,” she said.  “Then go for it,” was my reply.  “One structure has as good a chance as another.”

I find this a lot.  There is more to leadership than setting direction, but your strategy is what makes all of the rest relevant.  If you don’t know where you want to go, then it doesn’t really matter what your vehicle looks like.

Do you have the right org structure?  I don’t know, what is your strategy?

Do I have the right controls in place?  I don’t know, what is your strategy?

Should we change our culture?  I don’t know, what is your strategy?

So, does strategy matter?  Yes, and it must be done first. Everything else will need to follow and be evaluated in context of  your strategic plan.  In fact, the direction you pursue (while important) has less bearing on your success than having a clearly defined and communicated direction.