What is your organization medal count?

I was lucky enough to sit down with a very accomplished professional athletic coach this week and have a conversation that lead to the real mission of an organization.   He shared an example that as the leader of his altheltic organization they have a mission to win medals, period.  Their success is measured in the medals they bring home from the world championships, olympics, and each competition they attend.  He poked fun at a few of his peers that say their mission is to build an organization that the worlds best athletes are drawn to and will compete for.  He asked what is the mission of the business organization?  What is our medal count equivilat?

At first it is easy to pass off his idea of the mission.  Some may jump and say the medal count of a business is the total dollars it accumulates in profits.  This would be a lazy answer to the question.  Yes, profits are important and without them the organization dies.  Profit is the reason the organization exist at a basic level and anyone that tells you otherwise is a fool or is lying to you.  The real question is why are you seeking to accumulate profit?  What is the mission you of the organization that drives greater and greater profits?   The organization does have a medal count the trick is discovering it.

The larger point this great coach was making is that every organization needs a scoreboard and a championship game to judge its progress.  Doing this creates a sense of urgency in the organization just as the next big game does for an athletic team. One of my peers suggested the organization’s mission is to server a larger number of customers and our coach retorted that every organization wants more customers.  He challenged that this is merely a by product of winning more games.  If the organization puts more points on the scoreboard of course more people are going to come watch which in business means more customers and more profits.  The idea that the organization has a scoreboard for the here and now, the immediate judgement of results brings a call to action and impetus to drive and motivate success and victory today.  This turns today’s team huddle into a pep rally or half time reality check that the team is or is not winning.

The scoreboard is a feedback mechanism that every employee yearns for.  Lots of ink has been spilled in the business press to reaffirm and support my statement.  The best is Three Signs of a Miserable Job.  Eli Goldratt always liked to say “Tell me how you will measure me, and I will tell you how I will perform.”    Building a scoreboard achieves this question and gives your organization a medal count to track.

Purpose:  Why does your organization exist  — be honest with yourself and state clearly what are we doing here.  Starting With Why outlines a clear framework to challenge this question.  Being honest with the Why of the organization can drive incredible value creation.   Making a ton of money is not why you are in the business or industry you are in.  You might want incredible profits which is the outcome from delivering on some other Why for your organization.  If profit were the only goal you could own car washes or laundry mats (both great cash businesses).  Why does your organization exist?

Values: What does your organization hold to be important and true above all else.  This is a simple list of truths that everyone in the organization agrees to follow and becomes the DNA that holds in together in bad times and fuels the growth in good times.  If you have integrity as a value or any other ethical or moral judgement you have far greater issues to deal with in your organization.  The moral and ethical values points should be a minimum requirement to show up to work.  Listing them as a core value of your organization opens up a can of worms to foster character assassination among your employees.  Do not copy another organization’s value statement.  Be true to yourself and ask what makes your organization tick?

Vision:  What do you want to be?  This is what many leaders refer to as their mission statement.

“We provide the best products in the world to the best markets with fantastic customer service and pay our employees the most money yielding the highest return for our stakeholders.”

Or some other line of BS that means nothing to anyone.  It is a simple question of where are you headed?  As our coach friend would ask are you going to win the division finals or world championships?  Are you locked in to a particular world record or just aim to kill a certain rival?  What do you want the organization to become?  No need for grandiose statements that everyone will yawn and go back to the daily drudgery.  Three or four bullet points can accomplish this well.  We want to be x, y and z.  Done.  Be sure to be clear, concise, and specific.  For example “15 stores in the greater Gotham metro with $6 million in sales each by the end of next year”   Now you have a  clear picture for your business that can drive your strategy discussions and you know when and what you will reach.   Bill Gates said Microsoft is going to put a computer in every home.  That was clear and specific and that organization was able to know what goals was.

Brand Promise:  How will your customers see you?  Are you the cheapest? Do you have incredible customer service?  Are you known for selection?  This is again a simple list of bullet points that everyone can comprehend to clearly get where the organization is positioned in the marketplace and how it is different than its competitors.

Priorities:  Many organization call these initiatives, but what ever the label you use, what are the clear steps the organization is going to take in the short term that will lead to the vision of the organization.   Maybe the organization is going to launch a product or service, fix a problem, open a new region or market.  These are projects that hopefully are BHAG (big hairy audacious goals) that everyone is working on today to drive growth.

Map the Strategy: Mapping your strategy is a great exercise to clarify and check your results in the preceding steps.   Build a simple map that pulls together each element from the prior steps and maybe gets specific to determine if everything fits together.  Let’s do one tree branch together.

We have a core value of having fun as an organization ->  We have happy hour at 4 p.m. every Friday -> Our employees enjoy their jobs and have a high engagement ->  Our happy employees provide great customer service ->  Our customers know us for having fun, energetic stores and employees (brand image bullet point) ->  Customers stay in our stores 20 minutes longer than the industry average  ->  Average checkout receipt is 40% higher than industry ->  Profit per Sq Foot is 65% higher than peers -> Increased Profits -> Fuels store growth -> Compounds profits (positive feedback loop is created)  ->  Reach more target customers ->  Spreads our live happy lifestyle (Organization Purpose / Why).

The tree will grow quite large and bring every action back to answer the question of why are we doing this?   If something doesn’t fit then kill the project or action.  You cannot claim to be frugal and have high end office space.  Many of the items will tie together.

Balanced Scorecard:  The strategy map becomes the balanced scorecard for the organization to clearly provide a scoreboard to focus daily efforts.  In the example for our strategy map we know we must have a profit per sq. foot metric to judge our progress.   At most the organization should have five or six key metrics that illustrate its health and progress towards achieving the vision.   One of these metrics will stand out as the organization’s denominator.

Denominator: The organizations denominator is the single key metric that drives all other activities.  If this metric moves up, profits go up, and every action employees take can be reflected in this metric.  In healthcare often times a profit / cost per patient day is used.  In manufacturing a profit / cost per ton or volume of product.  Airlines measure themselves in passenger miles.  Insurance uses profit per premium dollar.  This metric illustrates the output of today’s effort and is real time and actionable.  Everyone in the organization can rally around this metric and relate it to their daily work activities.   This value is your organization’s medal count.  Chosen correctly the entire organization will know exactly how they can drive the medal count higher and push the organization to new heights.

Mission: How many medals do you want to win?   What is the target for your organization’s denominator?   Do you first need to win the state title before you try for national championships?  The medal count is real and definable for any organization.

Win your medals using your values and delivering on your brand promise while tracking your overall performance with your balanced scorecard and soon you will reach your organization’s vision and deliver the why.

 

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