Companies need engaged employees in the modern competitive landscape of business, but their employees typically do not fully comprehend how their work relates to their company’s vision. Hours upon hours of strategy planning go to waste because they do not get translated to the team members on the front lines. Only one in five said they had a clear "line of sight" between their tasks and their team's and organization's goals(1). This disconnect between the team’s tactical work and the strategic vision is a void the leadership team must address to be successful. This void causes vast amounts of wasted time, money, and effort, all while losing engagement and employee morale/retention.
Luckily, leaders in today’s world have an arsenal of new tools thanks to technology and more practical methods to use analytics. Data and analytics provide the insights and visibility teams and managers need to make more aligned and informed decisions. Analytics has the power to show how decisions have influenced goals and targets. Analytics is a core function in modern business to align teams and provide a competitive edge, yet many businesses struggle to properly translate their vision into action and prioritize analytics within their organization. When companies are attempting to make this pivot, using analytics to power the rest of the organization, it can be difficult to get all functions aligned around this vision. In order to activate analytics in a manner that propels the organization toward the vision, there are 3 challenges that need to be addressed:
The Compass is a framework that scales the corporate level vision to an achievable operational plan, activates analytics, and visualizes it for all levels of the business to understand.
Let’s go back to the basics- navigation. Before GPS or maps existed, people used a compass to navigate. In terms of a business, a compass is a way to visualize the direction you want to take the organization. It gives a true north and vision at the core of your compass. As you work outwards on your compass it gives a direct tie between the vision and metrics. Let’s dive into each of the above challenges an organization may face when rolling out a vision, activating analytics and address how the Compass can help.
Visions tend to be an abstract phrase or ideology that indicates where leadership sees the organization heading in the next 5-10 years. The ambiguity allows each team member to interpret the messaging or context to their own demise. As it is human nature to use past experiences to fill voids in ambiguity, their interpretation of the vision is subject to past life/work experience. This means everyone’s experience is unique and their initial interpretation of the vision is unique. This is what causes people to have different priorities and motivations, making it challenging to get anything done quickly.
The Compass does not allow for ambiguity. It forces the team to understand and identify objectives that can be measured. Being able to measure an objective gives a starting point around how we, as a team, need to move forward. It also forces the team to think in an organized manner. The more organized the objectives, projects, and plans are, the more likely people will be able to comprehend them with ease. The levels and how they cascade, allow for better understanding from the user and for management, who will be reviewing it with the team. This is a rigorous process to make sure everyone has a common understanding. It forces the team to think about what specific activities are being prioritized and why.
When developing the compass, the vision and the levers sections effectively address specificity and alignment. It forces the organization to gather the requirements before setting objectives, metrics, or projects.
The vision is crucial to developing a strategy for your organization. It focuses and empowers the team. The vision paints the picture for where the team is headed: to keep moving forward even when faced with obstacles. When deciding on a vision, it is best to keep it short and centered around the core of the business, empowering, yet not obtainable in a short time period. Without a vision, a team is just doing work for no purpose. The vision gives them purpose and direction.
By definition, a lever is a rigid bar resting on a pivot, used to help move a heavy or firm fixed load with one end when the pressure is applied to the other. Now apply this to business. Levers are the ideas/methodologies that will move your organization towards the core vision.
Now comes the question of how to choose the right levers. Just like the simple machine, you need to understand where to place your fulcrum.
This is dependent on the loads you are trying to “lift.” This is a position where analytics can aid the organization in understanding these levers. As you get better at using data and analytics for these specific loads (metrics you are trying to lift) the fulcrum gets closer to the load, therefore decreasing the amount of effort required to lift the load (improve the metric).
The use of data and analytic insights will allow you to exert less effort by placing your fulcrum closer to the load. The closer the data is to understand the “load” the less effort the organization will have to lift the load.
The first few times going through the compass, the organization may not have all the necessary information to complete a compass. The compass is an iterative process. It will take a few rounds (years) to build your analytics to support this.
There are two ways to lead a team. One way is by force and the other is by inclusion. Middle management/leadership are expected to guide their teams to accomplish their set of goals and objectives. Most companies incentivize their managers to achieve goals and objectives related to their department. Due to this structure, it can be counterproductive. This can allow for prioritized siloed agendas and a “victim” mentality when targets are not met. The purpose of the employees is to complete work that propels the team towards the vision. If management does not get consensus around the vision and the “why” & “how,” then there is no chance to accomplish the vision. They are also directly interacting and setting priorities with the people who are getting the work done.
The strategy of the compass is to have a vision at the center and then the respective teams build their own respective compass. When the team is a part of the process, the chance of buy in is much higher than just forcing the operating plan. As the teams work through each level, they are forcing each other to challenge what is being written on the compass- this adds value and validity to the plan and shows WHY they are working on the projects they are working on. The WHY helps connect the purpose of their tasks, everyone needs to have a purpose, it is a key human element to feeling successful. If management is involved in the compass’ construction (objectives, metrics, and projects), then they will understand, not only to complete the projects under their reign, but also support and allocate resources to the other projects. This forces a conscious direction across all members of management to understand where priorities lie within the organization- instead of the priorities that improve their bonus payout.
The next level of the compass is the objectives. As described in above, the compass forces managers to work together to understand objectives associated with the levers and setting priorities around this.
Each objective should have the following 3 characteristics.
a. Instead of: Improve Customer Satisfaction, try to use: Reduce DART incidents by 5%.
b. Make it more manageable for the team to see the results. Remember the compass is to take a 5–10-year vision and operationalize it so the teams can focus on these objectives around a 1-2 year turn around.
This step is critical to the success of having the compass work for YOUR organization. The objectives are the point where many teams can start to relate and realize they can impact the levers and vision of the organization.
As the compass starts to take, the next challenge is how to verify the performance and status of the identified objectives. This gives a sense of direction or accomplishment with the success of the effort behind these objectives. At this point, this will show one of the following:
This is where data and analytics exposes the truth behind the objective and the projects that are targeted in improving them. If the company is truly using data and analytics, it will become evident that the metrics will just be a bridge/confirmation on what types of projects to complete. It helps the teams prioritize their efforts while keeping a lean approach and spending time, efforts, and money on projects that will yield results.
The Benefits of Key Performance Indicators:
Although, when setting up KPIs, you must be careful when defining them. The first draft may be loosely defined, but as you develop through each draft, it is best to evaluate on many different perspectives and to challenge what they mean to the organization or the reader. This will allow you to define your metrics, and the data feeding these metrics, to not lose context and have multiple meanings.
Caution: A common pitfall is to confuse metric and key performance indicators. A KPI should track growth as a business, while a metric is measuring a status.
Key: is of paramount or crucial importance.
Performance: an action, task, or operation, seen in terms of how successfully it was performed.
Metric: a system or standard of measurement.
Think all KPIs are metrics, but not all metrics are KPIs. Metrics are to gauge performance or progress. The difference is based on when and how they are used within the organization-the context behind the objectives is what powers metrics into KPIs. Therefore, when building a compass, it is important to get the vision, levers, and objectives correct. It unlocks the door to identifying the KPI vs. metric.
Caution: Vanity Metrics! These metrics do not indicate how well you are running the business, nor do they affect your KPIs. These are metrics you can use to measure the success of a project and nothing more.
Leading vs. Lagging Indicators
Most KPIs are classified as lagging indicators. Lagging indicators are metrics coming from the effects of the team’s efforts-essentially, they tell you what has already happened. Leading indicators are more of a predictor how the lagging indicators will turn out.
Lagging Indicators: Safety incidents/100k hours worked
Leading Indicators: completion of safety audits & closure of safety concerns within 24 hours.
As referenced in the first point, visions are formulated around a scope of 5-10 years. Most employees are incentivized to complete an annual goal or objective. The challenge for the leadership is being able to connect the vision to the day-to-day work of the organization. The vision, efficiency/effectiveness of the organization will deteriorate without the support of key performance indicators (metrics) and projects that “lift” these metrics.
As discussed in problem statements one and two, the compass does not allow for ambiguity. The less ambiguity the better when developing an operational plan. Using data and analytics enables the team to work on projects that will yield the most benefit. The compass forces the team to identify what seems achievable within the next 1-2 years (scoping). Then develops a method to measure the success and build/identify the projects that will move the needle of those specific metrics. It forces the team to stop “boiling the ocean” and identify what they can do with the resources they have. This feedback will allow the leadership team to identify bottlenecks ahead of the results of not being able to complete a task and can aid in the discussion of resource allocation. Being able to develop an operational plan around your vision allows the organization to measure incremental success towards the vision.
Now that KPIs are set, it is time to put action behind them. By analyzing the KPIs, the actions should present themselves on where you need to focus using the KPIs and metrics to back up your project. The projects need to have the purpose of specifically moving the KPIs towards the goal and target.
As projects are developed, ensure each key stakeholder understands the KPI they are trying to improve. This may sound elementary, but you will find it is quite easy to get lost in the weeds. That is why there needs to be a steering committee keeping the project team honest on the objectives and milestones of these projects.
In conclusion, it is imperative to have teams aligned. Team alignment allows the members to become part of the process and get ultimate ownership. Once ownership is achieved, it unlocks the gate to develop a robust operational plan. The Compass activates analytics, enabling the vision to become reality. It puts action behind the vision.
To learn more about the Compass and how it can help your organization achieve its’ vision, please reach out to firstname.lastname@example.org