Step into the boardroom at any major company and you’re
almost certain to get an earful about mission statements
and company goals. In today’s intensely competitive
global environment, everyone agrees that a strong focus on
core business strategies is essential. “When employees
are all on the same page it can create some awesome capabilities,” states
Stephen Covey, vice chairman of Salt Lake City-based consulting
and professional services firm FranklinCovey.
Yet, wander
into the same company’s retail stores or
place a call for product support and it’s a safe bet
that while executives are describing their company as an “innovator” or “service
leader,” customers are choking on long lines, coping
with surly help and suffering through interminable waits
on hold. “There’s often a huge disconnect between
an organizations stated goals and its actions and behaviors,” says
Howard M. Guttman, principal at Guttman Strategies Inc.,
a Ledgewood, New Jersey management consulting firm.
This leadership gap—some might call it a tectonic rift—threatens
to engulf a growing number of firms. According to FranklinCovey’s
December 2003 XQ Leadership Survey, which examined 12,000
plus U.S. workers, only 58 percent feel that their organization
has decided its most important goals; 44 percent say their
organization has clearly communicated its most important
goals; and 37 percent understand the reason for the strategic
direction.
Gap Analysis
Even worse, human resources consulting firm Watson Wyatt
reports that the percentage of employees that understand
the steps their company takes to reach new business goals
is sagging by 20 percent annually. Somehow, despite elaborate
town hall meetings, snazzy desktop video segments and a seemingly
endless string of catchy campaigns and buzzwords, workers
aren't getting the message.
On the front lines of business, hopes and reality often
collide. “When executives talk about being a cost
leader or offering superior products and services, they
really believe it,” Guttman says. “The mistake
they often make is thinking that because a particular strategy
or approach benefits the company, workers will automatically
follow along.” Another major obstacle is top executives
who do not follow the philosophy they preach. “As
soon as workers spot leaders that appear hypocritical they
begin to disengage,” Guttman adds.
As the old cliché goes, the devil is in the details.
Closing the gap and achieving success requires a focus on
several factors: communication, financial and non-financial
rewards, performance metrics, recruiting, training and tapping
into effective leadership techniques. Ronald Bossert, a senior
vice president at Applied Research Corporation, a Metuchen,
New Jersey-based consulting firm specializing in leadership
development, says that, ultimately, the goal is to build
a pipeline for talent and match behavior and expectations
to the organizational vision. One company that understands the concept is luxury hotel
chain Ritz-Carlton. It is the only service company to twice
capture the prestigious Malcolm Baldrige National Quality
Award—in 1992 and 1999. Whenever possible, employees
greet guests by name, they record details about their preferences—from
favorite drinks to entertainment—and use the information
for future stays, and they attempt to solve every problem
they encounter. In fact, any Ritz-Carlton employee can spend
up to $2,000 to resolve a problem on the spot.
For many organizations, trusting employees to handle thousand-dollar
decisions might cause the executive team to choke. Ritz-Carlton’s
president, Simon Cooper, breathes easy with the concept. “I
don’t have to personally get involved with complaints
and we keep customers happy and loyal.” Too often,
he says, companies don’t resolve simple problems because “they’re
handed from one person to the next within the command chain
and everything gets bogged down.” What’s more, “Employees
sometimes take things personally and feel as though they
have to protect the company. At Ritz-Carlton, it’s
not about right or wrong, it’s about focusing on our
core goals.”
For the 58-chain luxury hotel, it all starts with the hiring
process. The company asks candidates a series of specific
questions (“Were you closer to your mother or your
father?”) to find positive, empathetic workers who
are eager to please. Those who meet the firm’s exacting
qualifications receive more than 21 days of training before
setting foot in a hotel. All employees carry a small card
printed with the company’s “basics”—20
core values that drive success. Finally, every day, all of
the firm’s 25,000 employees partake in a 15 minute “lineup” to
discuss one of the “basics.”
Besides emerging as one of the fastest growing and most
profitable hotel chains in the industry, Ritz Carlton has
reduced overall costs and built a rock-solid culture. Its
annual non-managerial turnover rate hovers at around 25 percent,
compared to 44 percent for the rest of the industry.
Green savings
Leadership doesn’t grow out of a prestigious title
or a pithy speech, it’s earned by communicating the
right values and attitudes and ensuring that they’re
transformed into actions and behaviors throughout the organization.
Michael Curran-Hays, president of North America for Kepner-Tregoe,
a Princeton, New Jersey management consulting firm, says
that what appears crystal clear at the top levels of an organization
often becomes murky on the factory floor or service desk. “People
do not understand how organizational goals and objectives
relate to them.”
That’s certainly not the case at Seagate Technologies,
a Scotts Valley, California manufacturer of computer hard
drives and storage gear. In 2003, the company began using
a performance management system from Burlington, Massachusetts-based
PerformaWorks that measures how effectively 16,000 professional
employees achieve their objectives and goals. After CEO Steve
Luczo defined his top five goals for the company, employees
followed with their own set of goals. Today, upwards of 62,000
goals are visible to any employee at the firm through a company
database.
Workers can tap into online resources to understand the
steps required to align their goals with Luczo’s and
others in the organization. With visibility up and down the
company, it’s possible to gain a greater appreciation
for the specific steps required to achieve results. “It
creates very tight alignment and gives workers the specific
information they need,” says Karen Hanlon, Seagate’s
vice president of human resources. She notes that 96 percent
of employees believe that the system has helped them understand
and manage goals more effectively.
While each company must create its own recipe for success,
Covey believes that the common ingredients are always the
same: a thorough understanding of what the organization is
trying to achieve and empowerment at all levels. “When
workers identify with organizational goals and feel connected
to the mission statement,” he says, “they’re
far more likely to perform well—whether they’re
designing automobiles or working on the retail floor.
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