Measure the progress
Once you have focused your employees and managers on departmental goals that feed into the overarching goals of the company, you need to measure and refine the process.
At Logicalis, Flood and his leadership team hand out what amounts to report cards — though Flood hesitates to call them that.
“We were all kids in school at one time, and we all know the connotation of a bad report card,” he says. “But you manage what you measure. The purpose of measuring isn’t to hand out a failing grade or a passing grade, the purpose is to understand whether your company can achieve the goal you set. If the company is not able, then you have to ask yourself why. It’s usually not because of the failure of a particular person. It’s nearly always the environment and the circumstances. As a leader, you have to be willing to understand what is impeding the progress toward a goal and make the necessary changes so that you can achieve it.”
It’s a simple concept, yet many businesses veer away from it: Subset goals for leaders and departments need to fall in line with your strategic goals. If they don’t, you need to go back to the drawing board and make adjustments.
“It’s a mistake I’ve seen a lot of companies make,” Flood says. “Having been a consultant in the past, one of the basic questions we would ask when we would evaluate companies is, ‘Can we see your strategic plan, and secondarily, can we see the goals of your key leaders this year?’ It’s interesting to see how many companies have key executives goaled on things that they don’t seem to see as a strategic objective for the company.
“That’s something we’ve worked very hard on. We have a review committee as we put together our goals and plans for any person in the company, and we tie them directly into the strategic plan.”
As you’re evaluating your company’s situation and plotting the adjustments that need to be made, you should think twice before you base all of your adjustm
en
ts on past performance.
Even more than your own historical performance in a given market, you should look at how your competitors have fared and the adjustments they are making. It’s especially true as the country struggles to recover from the economic downfall of the past two years.
“Basic goals that companies lay out for themselves — certainly objective financial ones — tend to be an extension of a reflection upon past performance,” Flood says. “As last year progressed, what the U.S. saw was a recession deeper and longer than any in recent history. That meant the goals that were considered viable 18 months ago were no longer attainable. So you have to step back and ask yourself if you were still assuming that you really would grow or whether the more appropriate measurement is your performance versus other peers in the industry.
“So rather than measuring by, ‘We grew X last year; we should grow by X+1 this year,’ step back and say that last year is not a relevant measurement in an extraordinary environment. It’s how your peers are growing, and are you growing faster than they’re growing? In other words, are we taking share in a tough market?”
