5 Systems That Have Helped Me and Can Help Other Startup Execs Discipline Their Business

Disclaimer

 

If academics are rearing to jump on a reference to Foucault’s “Discipline and Punish”, then now’s not a good time.

 

We know the market has moved out of its earlier discipline and punish model to a better (and less panoptic) model of management. Hence, in this post no harm was done, nor any punishment given to any theoretical business beings (except, well, some business practices).

 

Disciplining Businesses

 

Once the startup has reached into the “fun stage”, where customers start placing orders, executives face the herculean task of keeping their business under control. Since the business has gained a momentum of its own, and continues to run on the intake provided by the customers, it can start to move into unprecedented territories.

 

Unless the executives are able to leash it, chances of controlling the growing entity can dramatically grow thin.

MichaelZammutoDistDish - Copy

From my experience, 5-systems have proved beneficial in overcoming disciplining problems. I believe, they will prove helpful for other executives in the same boat. These five systems include:

  1. Balanced Scorecards
  2. Strategy Maps
  3. Strategic Job Families
  4. Top Grading
  5. Business Rhythms

 

Let’s see each in brief.

 

Balanced Scorecards (BSC)

 

The worst thing that executives often do is to hang their strategic plan as portraits, watching them every once a while during the quarter. It is crucial that executives establish a framework for placing all important KPIs into the right perspective and then measuring them accordingly.

 

The Balanced Score Board (BSB) transforms your strategic plan into an order churning machine for managers and employees on a daily basis.

 

Its power is often underestimated by considering it as merely a measurement system, but I’ve found it to be a complete management system capable of providing feedback for both internal business processes as well as external outcomes. It will allow you to continuously improve strategic performances and results.

 

The BSB forces us to view the organization from four perspectives (Financial, Customer, Business Processes, and Learning & Growth), and hence develop metrics, methods of collecting relevant data, and analyzing each perspective to figure how value is being created for the organization.

 

This is then communicated using Strategy Mapping (next).

 

Further Resources

 

Gain basic insights into the use of the Balanced Scoreboard, read “Using the Balanced Scorecard as a Strategic Management System” (Robert S. Kaplan and David P. Norton).

 

For a more fundamental understanding of the Balanced Scoreboard read Robert S. Kaplan’s original work “Conceptual Foundations of the Balanced Scoreboard” published in HBR (2010).

 

Strategy Maps

 

It is crucial to communicate the strategy of the organization, focus its efforts, and choose appropriate measures to report to an organization’s progress in implementing a strategy.

 

This is where Strategy Maps come in. They are a simple diagram that explicitly shows the cause-and-effect relationship between the four BSC objectives (Processes, Financial, Customer, and Growth & Learning). With this diagram, you can easily and thoroughly document the primary strategic goals being pursued by an organization or a management team.

 

They have allowed me to easily communicate strategies for the prime question “How we are to create long-term value for the shareholder?”

 

With a Strategy Map, the creation of shareholder value (the result in most cases) is exhaustively linked to organization’s core capabilities, innovation, organizational design, human resources, IT, connected learning, and processes, customer, and quality management. This graphic communication of the strategy among executives allows one to align resources for the successful implementation of strategy.

 

Further Resources

 

You can look up some examples of Strategy Mapping here.

 

Strategic Job Families

 

It’s never enough to populate the company with outstanding employees. Executives must use them effectively though good organizational design. This is where Strategic Job Families has arrived as a greater device for addressing workforce management.

 

Imagine being able to direct the organization’s strategy by knowing which positions will have the most direct impact on the execution of your strategy.

 

This would require making tough decisions quickly, e.g. releasing employees who don’t rise to the challenge. By creating strategic job families, executives are able to identify he positions which may be Entry level but prove essential to the strategic development of the organization. Examples include entry level positions such as book keepers etc.

 

A good method of doing this is to analyze organizational strategy, develop a list of selection criteria, and then ranking and scoring each position.

 

Further Resources

 

You can brush up on the technique from Peter Reilly’s paper published by Institute of Employment Studies.

 

Topgrading

 

“The fundamental driver of shareholder value is the talent of everyone in the organization on whom you rely to implement your business strategies.” — Such is the recurrent Wisdom of Executives.

 

All of us realize that our strategies will become a wasteland if we are not able to hire and retain high performers for our organization. As an executive, we are tasked with developing a team of A players for every position in your organization. This is where topgrading comes in.

 

Topgrading, in simple terms, is the practice of first collecting, and then empowering, the highest quality workforce. This is done by proactively seeking out and employing the most talented people available — while redeploying employees showing lesser ability or performance.

 

Topgrading allows this by ensuring that talent acquisition and management processes are solely focused on identifying, hiring, promoting, and then retaining top people. It also allows you to easily coach and empower the right people in the strategic positions.

 

I’ve found it to be the best device for promoting the right people, in the most strategic positions. And from experience, I’ve seen that organizations that topgrade are able to drive improvements or changes in core strategic value drivers including time to market, quality, innovation, productivity, customer service, etc. These organizations continued to show growth and success because they have the most competent employees in all job families.

 

Further Resources

 

Read the original piece describing the practice in a thorough problem-solution oriented manner here.

 

Business Rhythms

 

Predictability is the essence of sustainable business activity. As an executive, it is strategically essential that you are able to keep all aspects of the organization predictable, and hence achieve a unique business rhythm.

 

This can be spread over 4 different areas:

  1. Vision — A preferable future that is consistently tested over time in face of new perspectives, and evolves. The clearer it is, and more connected it is with individual team members, the more rhythmic it becomes for them to work towards it.
  2. Achievements — By strategically defining milestones and goals, and consistently achieving them, you create a sense of purpose, identity, dignity, and confidence. This is only possible by creating a simultaneous rhythm between defining, tracking, measuring, and adjusting your goals.
  3. Meetings — A boon to productivity if they are not rhythmic in their recurrence, focus, engagement, and the decision orientedness.
  4. Growth and Learning — Unless you are able to coach, empower, and aid employees in re-inventing themselves and continuously upping their capacities, you fail to create a rhythm for learning and hence growth. Learning corporations are the future, or haven’t you heard it yet?

Conclusion

 

Balanced Scorecards, Strategy Maps, Strategic Job Families, Top Grading, and Business Rhythms have been the weapons of choice for me to handle and discipline businesses over the years. If you have been employing others, feel free to share!