Tuesday, November 19, 2013

Culture of Execution

Culture is Organization's DNA.

We all heard the saying ‘culture eats strategy for lunch’, so what is the better culture for execution: setting reasonable objectives that can be achieved or setting ambitious, stretch objectives that even if not fully accomplished? How about personal commitment or team performance, and how to shape a culture of execution?

Stretching goals need to be motivational, but not over stressful: Stretching Objectives should motivate people to think bigger, work hard and achieve more; as long as that baseline is communicated and understood, falling short of the stretch is better than sandbagging and setting mediocre goals. If folks have the chance to set their own goals, they will most likely be more ambitious than those set by management, too

As many other things, balance is the key: There needs to have a fair balance of ‘stretch objectives’ and reasonable goals as well. While 'stretch' seems to be the obvious choice, if in each measurable period, a company sets goals that are unreasonable and rarely achieved, the massage to the team working to the goals is conflicted. Falling short could become acceptable or the norm. Thus, the balanced approach should be setting reasonable goals and stretch targets and attach compensation to the achievement of both.

Mapping goals is crucial step in execution: As long as the goal, whether stretch or not, is based on some strong analysis of assumptions that says it is quite doable, and if it is missed, everyone can clearly see what assumption changed or was missed. You need to be able to hit some goals. When a team first starts out, you need to have early successes to drive the concept. MAP allows for this and combined with a good goal setting process and sets the organization up to reach the PERFORMANCE goals. Every success builds momentum to strive and attain larger goals. Setting unattainable goals may negatively impact moral as well. The organization is as far as implementation of a goal system.

The greatest impact on end-results comes from the goal-setting process rather than whether the goals are realistic or stretch. The more the person who has to achieve those goals is involved in the goal-setting process, the better the results. Too often companies take whatever budget numbers are presented and then arbitrarily add 10% -That sets people up for failure and is a clear indicator of a bad culture that likely has extensive other problems including poor innovation, lack of growth, poor service, etc.

The other key element in culture of execution is personal commitment. Human achievements (often extraordinary ones) come from a deeply embedded desire to achieve. This in turn comes from identification with a worthy cause and a commitment to see that cause advancement. Collaboratively build individual goals that have a moderate stretch factor to them, and are highly attainable if the individual remains focused and leadership makes sure that the individuals stay on track while removing obstacles on the way to a successful outcome.

An open goal creation exercise should validate the targets to overachieve team performance. For the company as a whole, have higher expectations for the team to overachieve using the performance of individuals and believe that the balance of the team can rise to that level also with a few minor adjustments to their current strategies and activities. If candid discussion has resulted in mutual buy in to the targets between the leader and the team, and if incentives are in place for exceeding the goals, stretch budgets are unnecessary.

If strategy setting is more art than science; then strategy execution is more science than art, it takes systematic processes to set performance goals, either stretching or achievable, design scientific performance metrics and get deep understanding culture anthropology with motivational theories such as Maslow Pyramid 2.0 in overachieving ultimate business goals and objectives.


This article should open up budgetary discussions at Board level. I completely agree that it's the goal setting process that needs to be focussed on in the first place and whether management are in fact removing the obstacles their employees face to achieving target. Stretch targets should be unnecessary if the business transparent about how goals are set and especiall,y enabled to suceed. That's how you drive and incentivise not adding 10% it's such a demotivator and in an increasingly hard sales environment should you really be demotivating your sales teams and business as a whole?

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