By Alex Freytag, Partner at ProfitWorks LLC and Conway Center for Family Business Service Provider. Alex will be presenting at our December 18th Educational Program on Strategic Planning. Don’t miss it!
Cascading and Communication
There’s a great visual metaphor for business related to the concept of cascading. The idea is that you can conceive of your company as a waterfall in which the decisions made at each level affect the decisions made further down the waterfall all the way to the pool, creating complete cultural alignment. You can imagine that the decisions made at the top of the waterfall are quite strategic.
Let’s say you’re a Visionary and decide to start a candy company. Given that decision, you might ask these 8 questions:
- What are our core values?
- What is our core focus?
- What is our 10-year target?
- What is our Marketing Strategy?
- What is our 3-year picture?
- What is our 1-year plan?
- What are our quarterly Rocks?
- What are our Issues?
These questions are strategic in nature and the decisions made further down the waterfall are guided by your answers to these questions. Suppose you decide you will win by manufacturing organic chocolate with superior new product development capabilities. These choices will impact the decisions made throughout the organization: hiring, sales, marketing, purchasing, operations, product mix, customer service and so on. The employees at these various levels then make decisions within the confines of your upstream decisions.
At each level of our expanding waterfall more people are involved in the decisions and the choices become more tactical and operational in nature, with everyone working to achieve your vision.
One of the tools your team should use at the top of the waterfall should be a leadership scorecard. Your leadership team should meet weekly to monitor progress against goals and identify and solve issues as a healthy, functional, cohesive team.
Deeper into your organization, scorecards and meetings should be used as well, but the measureables on these scorecards will be more operational and focus on the activities and issues the associates in these departments can impact. For example, # of new product introductions, # of face to face sales calls, # qualified prospects, overtime hours, downtime hours, waste $, quality, on time delivery %, # of cases shipped, order accuracy %, etc. The leaders at the top of the waterfall must work hard to create an environment where those accountable to them understand their rationale for making certain decisions. This requires open and honest two-way communication, always keeping in mind the greater good of the organization.