Strategic Analysis Best Practice 3 – Identify the Hidden Drivers (Continued)

StrategyDriven Strategic Analysis Best PracticeSimply put, people tend to behave in the manner for which they receive reinforcement. There often exists both documented and undocumented performance drivers that exert unintended pressure on individuals to act in ways counter to achieving the organization’s mission goals. As a continuation of Strategic Analysis Best Practice 3 – Identify the Hidden Drivers, this article expounds on several common hidden performance drivers and how they may adversely impact mission achievement.[wcm_restrict plans=”25541, 25542, 25653″]

Documented Drivers

  • Compensation and Incentive Plans: By design, compensation and incentive plans reward individuals for specific behaviors. If the behaviors specified and rewarded are not aligned to the organization’s goals, it is likely the individual will behave in a manner that diminishes mission achievement. The impact of misaligned compensation and incentive rewards is more significant at higher levels of the organization because of the greater influence and span of control these individuals possess.
  • Incentive Plan Time Frames: In the case of executive incentives, payouts often occur at some future time in order to promote increased accountability for sustained organizational performance. However, these time frames may limit the duration of projects executives will endorse. The elevated risk associated with long-term projects represents a near-term risk to the executive incentive payout in order to realize a long-range gain for which the executive is not incentivized.
  • Workgroup Performance Measures: Performance measures provide periodic, public reinforcement; driving individuals to behave in a manner that results in a positive measurement outcome. Like compensation and incentive plans, if workgroup performance measures are not aligned with higher level and mission goals they will tend to drive behavior in a manner that diminishes mission achievement.
  • Policies, Procedures, and Standards: People also behave in the manner which they are specifically directed, such as by policies, procedures, and standards. On occasion, these documents become misaligned with the organization’s goals through a series of revisions in response to various events. When this occurs, performance unintentionally deviates from that which most directly supports mission accomplishment.

Undocumented Drivers

  • Undocumented Reasons for the Organization’s Founding: Beyond the organization’s mission statement, the reason for the organization’s creation is usually understood and acted upon by the Board of Directors and/or a small select group of the senior leadership team. Rooted in the organization’s history, this undocumented purpose guides decision-making at the top of the organization even when apparently counter to the stated mission. When this occurs, not only is the mission’s achievement diminished by the direction set but there exists a risk of creating conflicting priorities for managers and individual contributors further limiting personnel effectiveness.
  • Organizational Legacy: Organizations with a history rich in tradition and heroes may attempt to live up to or remain faithful to the legacy. Holding on to these past methodologies and philosophies may reduce the organization’s efficiency in achieving its goals in today’s rapidly changing, technologically driven marketplace.
  • Success Driven Complacency: Organizations experiencing long periods of continuous success may over time question the need to seek improvements or change; believing that they represent the industry benchmark or standard. Today’s highly competitive marketplace often leaves those who rest on their laurels struggling to remain viable.
  • Personal Relationships (or the lack thereof): People tend to identify and form relationships with those they perceive are like themselves. This may result in the endorsement of the actions and recommendations of one individual over another for relationship reasons rather than as a result of an objective assessment. On occasion, the relationship-based selection will result in the lower value option being pursued.
  • Defer to Perceived Important Groups or Individuals: Whether real or not, some groups and/or individuals are often perceived as being critically important to the organization. Abdication of decision-making to these individuals, especially on topics outside of their area of responsibility or knowledge and experience base, can result missed opportunities or increased adverse impacts. (See Decision-Making Best Practice 4 – Identify the Target.)
  • Personal Agendas: Hidden personal agendas often seek to enhance one’s prestige and influence or protect one’s position and expand one’s span of control regardless of the overall organizational impact. Ego-driven power struggles of this nature can irreparably damage an organization and often result in missed opportunities because of the roadblocks erected by those who don’t stand to significantly benefit from taking the action.
  • Unspoken Values: Valuing certain behaviors or personnel characteristics may personally benefit a majority of organization members. Subsequently, these behaviors and personnel characteristics become part of the corporate value system even if these values are socially unacceptable and counter to optimal mission achievement.

Remember, hidden drivers are not necessarily detrimental to the organization’s performance. It is important, however, that they are understood and assessed to ensure business planning and execution efforts are not diminished or undermined by these influencers of behavior.[/wcm_restrict][wcm_nonmember plans=”25541, 25541, 25653″]

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About the Author

Nathan Ives, StrategyDriven Principal is a StrategyDriven Principal and Host of the StrategyDriven Podcast. For over twenty years, he has served as trusted advisor to executives and managers at dozens of Fortune 500 and smaller companies in the areas of management effectiveness, organizational development, and process improvement. To read Nathan’s complete biography, click here.

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