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Strategic Cascade: Structure-Processes-Metrics

Let’s continue to look at the Strategic Cascade at a more detailed level.  In the last article we divided the six elements of the Cascade into two halves and examined MISSION, OBJECTIVES, and STRATEGY.  In this article, we study the second half of the framework — STRUCTURE, PROCESSES, and METRICS.

Many organizations recognize the importance of articulating MISSION, setting OBJECTIVES, and deciding STRATEGY to accomplish business goals.  Fewer organizations understand the supporting roles STRUCTURE, PROCESSES and METRICS play in making progress towards goals.  In a negative sense, they don’t recognize that the absence of a tuned STRUCTURE, supporting PROCESSES, and aligned METRICS are actually an impediment to high performance.

The STRUCTURE of a business is basically how it is organized.  Once STRATEGY for has been set, it is useful to ensure that the way a business is organized is appropriate to pursue the STRATEGY.  In the face of dramatic changes in STRATEGY, it is an error to assume that the current organization is appropriate.  It is of equal error to change the organization STRUCTURE with every shift in STRATEGY.  The challenge is to recognize that STRUCTURE needs to be tuned to, and driven by the STRATEGY of the business.

There are many ways to STRUCTURE a business.  How to organize depends on many factors like the size of the business, the type of business itself, the health of the business, ownership status, maturity of the employee base, etc.  What is important from a performance perspective is that accountabilities are understood and complexities are minimized.

The advantage of organization STRUCTURE is that it divides work across multiple teams and increases focus towards specific tasks.  The disadvantage of STRUCTURE is that it separates parts of the organization and increases the possibility of task confusion, mismatched activities across teams, conflicts in priority, etc.  In order to avoid the downsides of STRUCTURE, it is appropriate to build a set of business PROCESSES that tie the structure together and increase cohesiveness.

Business PROCESSES come in many forms and fashions.  They have three primary functions – planning for things that need to happen, tracking things that are happening, and reporting things that have happened.

Planning PROCESSES can be as simple as a staff meeting check-in for goal alignment between two groups and can be as complicated as multi-month business planning project that involves dozens, if not hundreds of people.  A basic tenant of effective planning PROCESSES is to ensure that OBJECTIVES of the organization are divided into workable pieces across the STRUCTURE.  The most effective planning PROCESSES result in documented sub-goals, roles/responsibilities and timeframes to reach the OBJECTIVES while spreading the tasks across the business STRUCTURE so that activity can be orchestrated.  These coordinated plans help an organization meet its goals and set the stage for high performance.

Tracking PROCESSES are used to monitor the progress of the plan towards OBJECTIVES and facilitate understanding and resolving discrepancies between the plan and reality.  Effective use of tracking PROCESSES allow a business to make adjustments to its resources, its approach and its expectations to optimize progress towards OBJECTIVES.

Reporting PROCESSES provide the business specific measureable results and communicate those results to those of interest, e.g. ownership, the management team, the employees and the public.  These reporting systems are typically based on a set of METRICS that are important to the stakeholders and provide feedback to the business regarding business results.

METRICS, similar to PROCESSES, come in many forms and fashions.  METRICS are typically built into planning PROCESSES to streamline tracking and reporting, and are useful on keeping tabs on things that might not be directly related to high level objectives.  Additionally, financial METRICS are legally required for taxes and other regulatory requirements.

A key to good METRICS are to have enough, but not too many.  An organization can get swamped with keeping track of METRICS if the system is too cumbersome.   Another key is to examine METRICS across the organization to ensure alignment between teams.  Another good practice with METRICS is to balance the OBJECTIVES oriented measures with the ongoing but  maybe not so visible daily requirements of running a business.

SHARPER COUNSEL’s Strategic Cascade model consists of MISSION, OBJECTIVES, STRATEGY, STRUCTURE, PROCESSES, and METRICS.  By ensuring that all framework elements are current, appropriate and aligned, an organization can set itself up so that high performance is possible.

 

SHARPER COUNSEL

Sharper Counsel LLC is an executive short term assignment company dedicated to the improvement of high potential businesses.

In short, we do BUSINESS TUNEUPS.

We provide management consulting to accomplish business and organization assessments. We specialize in business development and business process management and are one of the up and coming consulting firms in San Diego. Our team is always eager to help you improve your business, so...

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