The bull market that has held for the better part of a decade is quickly dissolving, and the dark clouds of recession are on the horizon. The next great economic sifting is beginning, and only organizations with a clear, actionable strategy will endure. If you haven't already, read Part 1 of this series, where we outline three additional ways your team can failproof their strategies.
In the first article in this series, we highlighted three actionable insights leaders can take to shore up their strategies and prepare their teams for a looming economic downturn. In the second installment, we detail how holding teams accountable and tracking the metrics that matter to deliver the bottom line will set up teams for success and avoid missteps along the way.
Data-driven decisions are great... if, and only if, the data is accurate. "70% of change management efforts fail" is an example of a misleading metric that steers organizations away from impactful change initiatives. Introduced in Michael Hammer and James Champy's 1993 book ‘Reengineering the Corporation,’ this statistic has perpetuated a widespread negative bias toward change efforts. In 2011, University of Brighton's Dr. Mark Hughes analyzed studies proclaiming this failure rate and discovered "no valid and reliable empirical evidence to support such a narrative.”
As we further integrate data into our strategic decision-making, it is imperative that our teams track accurate and dependable numbers; otherwise, our strategies will inherently fail. This is especially pronounced in rapidly changing business environments in which data can change from reliable to misleading overnight. In response, leaders must quickly adapt their organizations’ strategies. However, McChrystal Group research indicates only 50% of employees agree that their company adapts its strategies to changes in the environment.
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Measurement strategies are often based on what metric is convenient or historically utilized. Often these metrics will descriptively tell you how things are going but not why they are happening. If the metric does not answer the “why,” we can only form hypotheses; consequently, important strategic decisions are based on hunches instead of data. For each of your team’s KPIs (Key Performance Indicators), categorize them into “how metrics” and “why metrics.” If you do not have sufficient “why metrics,” you must develop a new measurement strategy.
Within the past month, how many times have you provided a teammate with positive feedback? What about negative? In a cross-functional study of 60 leadership teams, researchers discovered that top-performing teams give a 5:1 proportion of positive to negative feedback. The environment in which criticism is given is just as important as the amount.
Amy Edmondson describes organizational culture through the lens of psychological safety and accountability. The most effective feedback is delivered when accountability and psychological safety are simultaneously present. When teams lack accountability but maintain psychological safety, they enter the comfort zone, in which learning is absent, and mistakes are not fixed. Employees in the anxiety zone are afraid to make mistakes or speak up when accountability is high but psychological safety is low.
A lack of accountability within teams is a common issue, as illustrated by our research which shows that when objectives are not met, only 38% of respondents agree that responsible parties are held accountable for their actions. In moving toward a learning organization, leaders must hold their teams accountable and foster a culture of high psychological safety.
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Leaders can drive accountability through the following 3-step process. First, break the strategy down into specific initiatives that have defined metrics of success. Second, assign a singular leader with public responsibility for executing each initiative. Third, establish a regular cadence (weekly, monthly, quarterly, etc.) to debrief senior leadership on the status of the initiatives. The combination of concrete objectives, ownership, and regular reviews will drive accountability that produces results.
If you have ever ridden a bicycle, you may think that it’s a simple piece of machinery. When compared to a car or a boat, it is. But you probably know much less about a bike than you think you do. Take, for instance, the gears of a bike. Could you describe in detail how a gear change affects the pedaling resistance? What about its speed? When we consider the mechanics of common items we use in our lives, we discover we know much less than we previously thought; this phenomenon is known as the illusion of explanatory depth.
Your strategy falls short of execution when your teams are constrained by the illusion of thinking we know more than we do. When given a strategy to execute, our initial instinct may not be to consider our inability to accomplish the task, yet McChrystal Group survey data shows that 62% of employees indicate they need more access to expertise to accomplish their business objectives.
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Many leaders mistakenly create long-term strategies based on the teams they currently have, creating unnecessary constraints and narrowed visions. The idea is to build strategies that drive success both now and into the future. To accomplish this, conduct a capabilities audit to identify the gaps that exist (skills, expertise, knowledge, experience, etc.) within your team. Conduct the audit at the strategic initiative or project level so that you have a clear line of sight on what each initiative requires for successful execution. When you aggregate these needs, you will have a clear view of what specific capabilities are missing.
Fortune favors the bold. Your strategy may not be perfect, and the future is foggy at best, but if you take proactive steps now to avoid these pitfalls, you will be in the right position to weather the storm and come out on top.
For more resources on fail proofing your strategies during difficult times, visit our Great Prioritization Resources page.
