If you’re responsible for operations in your company, you spend the majority of your time answering two simple questions:
- Are we doing the right things?
- And, are we doing those things right?
During my career, I’ve worked across a variety of industries, with a wide range of business models, diverse sets of teams and stakeholders, and organizations of all sizes — from startups to scaleups to Fortune 500’s. Regardless of the situation, the key to answering those two questions was aligning the organization.
Over the years, I’ve created and refined a highly effective methodology, the Strategic Operating Framework, which unifies corporate efforts and provides the structure to successfully manage a complex organization. In this article, I share insights on how to successfully deploy the Strategic Operating Framework to exponentially move your company forward.
First, let’s discuss what kind of work culture you’re trying to achieve. I’m a big believer in an Organizational Alignment approach. This means there is an annual strategic plan that encompasses all stakeholder requirements and specifies ambitious yet achievable objectives. The strategic plan succeeds by rallying the team around common goals, supporting them with light-weight, easily adopted processes and intelligent systems, and continually tracking data to optimize corporate performance.
I can’t over-emphasize the “light-weight, easily adopted processes”. In my experience, when you over-engineer a process, the team will reject it and find ways to work around it. This is far more damaging than working in the absence of structure. I encourage you to consider this as you commence rolling out your strategic operating framework and rightsize it for your organization and its culture.
Before we dive into the Strategic Operating Framework, it’s important to understand why it matters. Ultimately, the organization should be striving for a state of Continuous Improvement. The Strategy Management Group created the Strategic Management Maturity Model to help organizations assess where they are on the operational excellence spectrum. I’ve adopted this approach and find it incredibly effective in helping a company continually evolve. Let’s take a look at each level.
The Strategic Management Maturity Model
Level 1: Ad Hoc & Static
Most startups are in the Ad Hoc & Static state during their formative years. Strategic planning happens infrequently, if at all, and the plans that do exist tend to be mostly tactical. Process and procedures are often makeshift and the senior leadership team is constantly putting out fires rather than strategically thinking about the company’s evolution. This is normal.
Level 2: Reactive
Eventually, if a startup survives, it transitions into Reactive mode. A strategic plan exists at some level but often sits on the shelf and is not operationalized. When the plan is applied, the execution usually happens inconsistently and with varying degrees of success. At this stage of corporate maturity, some processes exist. There are two types: 1) the grassroots process that is developed by an individual or team to fill a void and provide structure, and 2) a corporate policy that requires a process occur (such as performance evaluations) but that is often poorly engineered and not well understood.
Level 3: Structured & Proactive
The majority of companies stall when they get to Level 3 and remain indefinitely in the Structured and Proactive state. Formal structures and processes exist and teams actively conduct annual strategic planning. The company may have started to measure performance in various ways and there is some alignment between corporate strategy, each team’s mandate, and each employee’s goals.
Level 4: Managed & Focused
Evolving into a Managed & Focused company requires serious commitment from the C-suite to ensure that strategy drives focus and decision-making across the organization. At Level 4, there are company-wide common process and standards for strategic management. The company has an accountable culture, and leaders — from middle management to the executive team — consistently engage employees in measuring progress against goals.
Level 5: Continuous Improvement
Level 5 is the promised land. And once you arrive, you need to maintain a focus on continually improving. There is a formal performance management framework in place that addresses all facets of operations (marketing, sales, project delivery, resourcing, supply chain, facilities management, employee performance reviews, etc.), and data forms actionable insights that, in turn, constantly move the needle on key performance indicators. To be an elite organization, your goal is Continuous Improvement. And I would suggest the aim is really Continuous Improvement Without Judgement.
Continuous Improvement… Without Judgement
Google ran a multi-year study, Project Aristotle, to crack the code on what makes a successful team. Google researchers identified a mixture of 180 low- and high-performing teams. They reviewed numerous factors, such as personality traits, skillsets, demographics, team dynamics, etc. to identify the team success formula. What they found was, just like individuals, teams are diverse and unique. It’s nearly impossible to quantify them.
However, there were a handful of norms (unwritten rules that govern how teams function) that form a blueprint for team success. Google’s researchers learned that it isn’t as important who is on the team, but rather it’s critical how the team collaborates. While behaviors such as dependability, structure, clarity, meaning, and impact were vital, the most important trait was Psychological Safety. The New York Times Article, What Google Learned From Its Quest to Build the Perfect Team, is a great read on this study and the outcomes.
Psychological safety means that “teammates feel safe to take risks around their team members. They feel confident that no one on the team will embarrass or punish anyone else for admitting a mistake, asking a question, or offering a new idea.” This safe environment is essential to achieving true organizational alignment and attaining the state of continuous improvement.
The Strategic Operating Framework
That brings us to the Strategic Operating Framework, the methodology that is essential to a well-run organization. It sets priorities, focuses energy and resources, ensures the team, the Board and other stakeholders work toward common goals, establishes agreement around intended outcomes and results, and assesses and adjusts the organization’s direction in response to an ever-changing environment.
The Vision and Strategic Plan elements of the framework are reviewed annually. The rest are evaluated on a quarterly or monthly basis. The review frequency depends on your particular business and the pace at which your industry dynamics move.
Let’s examine each component of the Strategic Operating Framework in detail.
A Vision document serves as a unifying focal point for the organization as it:
- Articulates a future vision,
- Presents a visualizable end state, and
- Galvanizes internal stakeholders and external partners.
Annual Strategic Plan
The Annual Strategic Plan provides direction to all teams, allows the organization to be proactive versus reactive, increases operational efficiency, and makes the business more resilient.
Roadmap & Budget
The Roadmap is a visualization of the annual actions needed to help the organization achieve its long-term goals. The Roadmap should be collaboratively created across programs and departments and signed off by the Executive Team. It connects the dots for people in the organization by showing everyone how their daily actions align with the vision and the annual strategic plan. The Roadmap is intrinsically tied to, informs and is informed by the financial plan and budget.
Team & Committee Charters
Team and Committee Charters define the purpose of these groups. The documents outline objectives, roles and responsibilities, identify main stakeholders, and define what success looks like.
Resilient, high-performing teams are established on a foundation of trust. And that trust is the consequence of communication, transparency and aligning the organization’s mission with each team’s mandate so employees understand why their work matters. Team members who understand their goals, responsibilities and success criteria feel a heightened emotional connection to the organization and are empowered to succeed.
As a related aside, a perennial training program should be a core commitment for every company, as ongoing professional education accelerates personal and collective growth, nurtures culture, and strengthens the organization’s ability to problem-solve.
Deft execution allows an organization to set and achieve goals and deadlines, avoid conflict, build team unity, and continually improve performance. There’s a certain level of precision involved as the company employs a consistent approach to managing day-to-day operations, including:
- Organized Meetings: meetings have a time-boxed agenda and clear action items.
- Clear Project Briefs: project and program owners initiate these activities with a clear brief that contains a RASCI, a responsibility assignment matrix, which delineates stakeholder roles and responsibilities on any project as either Responsible, Accountable, Support/Supplier, Consulted or Informed.
- System for Vetting Opportunities: a specific process for surfacing and evaluating new ideas.
- Consistent Project Retrospectives: a regular practice of reflecting on past performance and making changes to work better, together.
Metrics and key performance indicators are measurable values that demonstrate how effective an organization is at achieving its objectives.
A Measurement Framework provides regular updates on projects across all facets of the organization (personnel, new hires, critical systems, committee progress against goals, etc.).
In conclusion, your goal as an operations leader is to ensure your company is doing the right things and doing those things right. The Strategic Operating Framework is an incredible methodology to ensure the CEO’s vision informs the strategic plan that defines each year’s priorities (e.g., the right things), and that operations are well executed (e.g., done right).