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What is the importance of company strategy to reach the base of operation?

14/03/2020

organizational strategy

All companies in one way or another have an organizational strategy. Being Formal or informal, it is represented by executive plans in place, expressed internally by daily management actions.

These plans, in general, translates the business vision. Embedded on it are wishes and desires of its executives and/or business shareholders, in relation to growth, stability, maintenance, downsize or increase competitiveness, aiming to search customers’ expectations.

In this sense, such plans can be translated as project imperative and project definers and/or company strategic initiatives aiming to be properly deployed.

Unfortunately, much of this organizational strategy resides only in the minds of managers. It is used by them to guide daily ordinary decisions becoming their organizational status power in the organization structure, most of times in prejudice of employee´s empowerment and autonomy.

The strategy deployment throughout the whole organization structure serves to guide the company’s leadership team on the best paths and the best undergoing decisions.

Resolutions that, if taken today, will produce the expected results often in the medium or long term.

If it makes sense for you, bear with me in the following lines. I will explain in more details.

Barriers to execution – Let’s try to understand it

There are several paradigms that guide the non-democratization of key information within the organization. Sometimes called as “classified or strictly confidential” information.

One of them, and strong, is the issue of confidentiality and protection of intellectual property.

In other circumstances, the organizational strategy is not disclosed by the fear of enabling managers of lower hierarchical levels to take decisions in a bad moment, or not in the right timing.

In general, managers and leaders disclose key information simply because they get to know in advance the desire of senior management to promote certain changes or improvements. Whether it’s process or organizational.

On the other hand, large corporations have the need to present shareholders monthly financial results and their performance indicators and trend charts.

They demonstrate how much the goals set in the operational or budget plan are being met, meeting the expectations of managers with transparency.

Often, publicly traded companies need to produce these reports. These are audited and subsequently disclosed to the open stock market. Thus, the requirement of accountability to shareholders is fulfilled.

In general, financial statements are a key part of the organizational strategy and guide companies into results management.

However, the result statement is the end of the business process. In fact, financial results come from a consequence of actions implemented by other sectors of the organization.

Departments that in turn should also have their Kip’s in the dashboard, are as follows;

  • Customer service
  • Logistics and inventory management
  • Quality
  • Time to enter the market with new products and services
  • Delivery of products and services
  • Safety and environmental impacts
  • Evolution of sustainability programs
  • Effectiveness of the purchasing and manufacturing area, etc.

Many companies have the above indicators and use them to measure the performance of managers and their teams, on the delivery results journey.

In many cases, they do not even come to the knowledge of the factory floor or the base of the operation, for various reasons.

Running organizational strategy

In the Methodology of Blindagem de Processos, we advocate the importance of these performance indicators being stratified through all levels of the company organization.

We believe that once stratified top down in the organization structure, shop floor employee´s get to know easy how they can contribute, working on the base of the pyramid and moving results bottom up. See in the figure below.

Much more than becoming visible and transparent, we advocate that these alert flags be used to drive the daily performance improvement of each operational team.

It is not a question of making these colorful and beautiful graphics available in the various “spot management” panels. Much less being able to show the “visits” level of organization and communication, in the operation management process.

The correct and well-stratified indicators should serve as an internal reference translated into goals to be delivered by the sector team, fully aligned with strategy.

They should be used as indexes of how effective this team is delivering the organization’s strategy, at its level of activity.

In this context, these indicators serve for employees to orient themselves and understand how aligned they are with the goals and kpis, in their daily work.

But how should this process be managed within the various teams of work? What tools should the team used to analyze gaps and drive performance up?

Managing advanced processes

The answer is evident. You must understand the root cause of the problem that is preventing the target from being met. This is possible only confronting actual results against goals and dig down to find root causes and implement resolutions action plans.

Yes, you are right! This brings to the game an important drive element. The collaborators stress when facing goals and results transparence. Visually eventual bad teams’ performance is exposed and create a embarrassment if not well managed.

Only from that point as a team, one can swiftly identify the possible solutions that will completely solve the issue, preventing the operation flows and meet targets. Turns up the challenge of doing the right thing first time!

Even more than that, it allows to evaluate over the days ongoing, if the solution implemented get the necessary adherence.

Therefore, after their implementation, they make the indicators park on a new and better level escalating up on the ladder of continuous improvement.

This is the famous cycle of continuous improvement and exemplifies the typical use of PDCA  on a daily basis.

This well-conducted process gradually must be introduced in the management daily culture and routine. To sustain and ensure good results It is crucial to Implement the method of evaluation and analysis of problems solving.

In addition, it shifts empowerment to the basis of operations pyramid, enabling to use it on its day-to-day work, enhancing the capability to keep process flowing. In other words, it effectively democratizes decision-making process and makes the operation self-sustainable, less dependent on third parties, to make it happen.

Moreover, it allows teams to understand how they can contribute to strategic results daily. Thus, promoting engagement in the process of delivering challenges and achieving team goals.

The methodology of Blindagem de Processos, through the tools of lean production, the transformation of culture and the realignment of the leadership profile, promotes the use of a structured execution method that brings in discipline and organization.

Thus, people understand their responsibilities, learn to make decisions focused on an effective generation of results, in everyday life. This is an effective change management.

Teamwork

All this is only possible with the effective participation and engagement of all employees and the strong support of senior management, demonstrated with attitudes and effective participation.

One of the great results of this process is the creation of a winning team. This team that improves results every day. It grows and learns new things by becoming its members better and more productive people.

Henry Ford, in his day said.

“You could take my factories from me, burn my buildings, but if you give me my people, I’ll build all my business again”

What makes your company competitive and profitable are the people who make it up. It is the various teams that; trained, committed, and aligned with the organizational strategy, makepossible to move towards the journey to operational excellence.

Luiz Claudio Mattos

Founding partner – Blindagem de Processos