Galloping to Greatness In Strategy Implementation - PART 2 #innovation #dynamiccapabilities #heuristics / by John Schlichter

Horse-Racing.jpg

In Part 1, I noted the verb "to manage" was originally derived from the Italian word "maneggiare," meaning to handle and train horses, which is what inspired me to demystify the way that capabilities in strategy-implementation are created by talking about it in terms of horse-racing. Clearly I am actually interested in helping organizations become capable of choosing good projects and delivering them well to implement the organization’s strategies. But pretending that horse racing is our interest can be a useful thought experiment. It takes you out of your normal frame of reference and makes you look at things differently in ways that are instructive.

“Both the riders and the horses
have roles in this.”

In Part 1, I explained standardization, which is the first agenda or level of maturity toward becoming capable. Standardization is consistent implementation of work methods. To enact standardization fully, one needs to pursue the next level of maturity, which is called “measurement.” Measurement includes the following things:

  • Identify critical characteristics of the horse racing process. We must articulate what is critical or essential for the process to produce a quality result.

  • Document "Results Measures." We must document the expected outputs and outcomes of the process and how those outputs and outcomes will be measured.

  • Document the measurement system. We must document how measurements will be taken.

  • Train stakeholders. We must train members of the organization in how to collect and analyze measurements.

Both the riders and the horses have roles in this. The riders must support each of these things and the horses must be trained in what to expect, learning how their performance will be measured. For example, they may be measured for "speed," and they may be measured for "safety." They will learn that these metrics are important and that the organization is tracking them closely.

The organization may already know intuitively that the performance of their horses occurs within a range that they expect. Or they may see that the range of variation in performance varies widely, and they will begin to uncover the reasons why. 

Let’s talk about the sequence for doing things. Which came first: the chicken or the egg? For measurements of a process performed by people to be meaningful, the process has to be performed consistently first. If we are going to measure the horse-racing process, it has to be comparable each time the process occurs.

For example, it has to involve a horse each time. It can’t be horses one day and mules the next. It has to be the same kind of run, not a steeplechase one day and a jaunt through the park the next, not endurance racing one day and jump racing the next. When differences become too great, it is no longer the same process, and measurements are meaningless.

But teams are unlikely to perform a process consistently until it's measured. Why would they perform a process the same way every time unless they were convinced they needed to? We should not assume that they would. Horses may not want to race every time they come out of the stable. If we need them to race every time (if speed is what matters every time), we have to train them that this is how their performance will be measured, i.e. time-to-finish-line (or in the case of new product development projects, for example, time-to-market).

So which do you do first: standardize the process (i.e. document it, train practitioners in it, and establish oversight) or measure the process (i.e. decide what’s critical, define metrics, document how measurement will occur, and train everyone in measurement)? The answer is that you should enact both the standardization agenda and the measurement at the same time. Document the process for horse-racing so everyone is on the same page, i.e. the owners, the riders, or newcomers who may show up to be part of the horse racing team. But when you document the process, document how it will be measured too. Train everyone and establish oversight for consistency, but show everyone up front what’s critical about the process and how they will be measured.

“Your TEAMs ARE unlikely to perform a process consistently
until it's measured.”

When you train them in the process, train them in how they will be measured, and do these together every time. As soon as you roll out a process, start measuring it regularly. If you don’t implement these two agendas of standardization and measurement together, then you will find it challenging to achieve either. If you don’t do them together, then an assessment is likely to find that you have not achieved standardization, and if you haven’t achieved standardization then you will not have achieved measurement.

Here’s a quick word about the sequence for assessing these things. There’s a difference between doing something and assessing that it has been done. Although we should implement standardization and measurement simultaneously, we should assess standardization first and assess measurement second. The relationship between assessing standardization and assessing measurement is finish-to-start. But as explained above, the relationship between implementing standardization activities and implementing measurement activities is not finish-to-start. It’s finish-to-finish.

Standardization and measurement are the necessary foundation for choosing good projects and delivering them well to implement your organization’s strategies. To become capable of implementing your organization’s strategies successfully, consistently, and predictably, you have to standardize and measure the processes for translating strategies into projects and delivering them. Other agendas follow, which will clarify the difference between “maturity” and “capability,” two concepts that nearly everyone confuses. Stay tuned for Part 3.