A Fine Balance: Balance ST and LT Goals
July 30. 2018
We often meet executive teams which are overly focused on delivering short term results at the expense of longer term growth. Considering the pressures senior executives receive from their boards and shareholders, this short-term focus is not surprising. However, “real success” can only be achieved by balancing short term results with a continuous focus on long term growth for the business.
In our consulting practice, we regularly meet executives focusing all their time on the short term operational management of the business. They stay close to the business and understand every issue and every detail of the operation. Usually, they don’t stop there. With this detailed knowledge, they become the operational problem solvers and before long all decisions big and small are made by the senior executives. Operational managers eventual stop making decisions in their day to day work and wait for direction from the top. The executive becomes indispensable and these managers become high priced coordinators.
This model may work in the short-term. However, over time, the executive becomes so fixated on the details of the operation there is an unintended shift in their focus away from the critical programmes and innovations required to grow and take the business to the next level. Operational managers no longer feel they have the authority to making appropriate management decisions, reducing productivity and increasing bureaucracy. Improvement programs don’t deliver on expectations, business velocity slows, and overall business results start to slip.
We have successfully worked with many executive teams in facilitating the adoption of the following 5 (plus 1) actions to support their need to balance short term results with longer-term growth:
- Structure the work to deliver the strategy—Once the strategy and the business plan are defined, the work of designing an effective and efficient structure that will deliver on the strategy can begin. Executive roles are designed to focused on future growth and innovation, while middle management roles are designed to deliver on the current year’s plan and position the operations for success one year out. Work in each level of management should be differentiated from, and add value to, the level below.
- Ensure you have the right people in roles—Too often we see organizations where roles are built around people’s skills and interests versus roles designed to deliver the strategy. Management needs to understand the work that is required, design roles based on this understanding, and then staff these roles with individuals who have the capability and interest to do the work.
- Ensure individuals and teams are focused on the right work—Designing the work is one thing but ensuring roles doing the right work is something else. We start with ensuring individuals and teams understand their own work and deliverables. We then put the mechanisms in place to hold them to account to deliver these results. Our three-tier management system is a critical success factor in the implementation of an effective and efficient organization design.
- Give people the authority to make decisions—Too often we find that high priced executives must wait for approval every step along the way. The business under-utilizes managers, and by default over pays them for the work they do. The solution is simple give people the decision-making authorities necessary to do their jobs and deliver on their goals.
- Trust people and hold them to account—Providing people with clear roles and authorities frees them to do their best. Remember good organization structure is not boxes making up an organization chart. Good structure is the distribution of accountability and authority into roles to get work done. Lastly set up mechanisms such as management systems, scorecards, and meetings to ensure work is on track or managers have a plan to get it on track.
Plus 1. Prepare for succession—At first blush this point may not seem related to the first five, but it is, particularly of point 4 “Give people the authority to make decisions.” When managers are not given the necessary authorities to execute their current roles, it is not possible for them to develop and be ready for their next role. The business might well decide to recruit externally for that next role and therefore miss an opportunity to promote from within.
Delivering on short term results and longer-term growth is no accident. Success depends on ensuring there is a balance built into the organization structure and work systems, where the right people are focusing on doing the right work at the right time.
COREinternational works with executives to unleash human capability. We identify challenges that hinder growth. Our processes and tools increase productivity by creating a structure that ensures people are working to the right level of complexity. Our insights align structure, leadership and strategy to transform your business, and accelerate profitable, sustainable results.
If you would like to learn more about our approach and time-tested design principles, please visit our website www.coreinternational.com.
Michael Brush, PartnerPhone: 416 977 2673 ext 13
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Tagged: Balance short and long term plans, Design principles, Strategic results