Why Retreat?

Frank Miles, a consultant hired to work with XYZ Corporation, is preparing to recommend to his client that they undertake a corporate retreat. His instinct and experience tell him that the corporate leaders need an opportunity to regroup, rethink, and solidify their business strategies. But Frank is concerned because of the perception of some in the business world that retreats are nothing more than expensive boondoggles–company-paid vacations for executives and their staffs.

In order to prepare the best recommendation possible, and one that is accepted by the client, Frank decides to ask some of his peers in the consulting field for their reasons why corporate retreats work when properly structured and used. The responses were varied, and each response gave a real benefit of retreats that he could include in his recommendation.

1. Retreats can help define and refine strategy. Getting away from the office, from telephones and email, can bring fresh perspective to corporate strategy. In a less structured setting, group participation and problem solving are enhanced. Rethinking the organization's mission, vision, goals and objectives are best when there is some space from the day-to-day grind of work and accomplishment. Retreats are excellent tools for clarifying or reaffirming the strategic direction of an organization.

2. Retreats can help review and identify trends. In the midst of regular business activities, it can be very challenging to take a broader look at your industry and competitors. Getting away from the office and into a more relaxed setting stimulates deeper thinking and helps identify issues and events and their relationship to one another. Looking as a group of executives or coworkers at the bigger issues that have impact on business direction can be a healthy experience. Using economists, consultants or others to help identify trends in the broader environment can be very helpful in seeing meaningful trends and doing something about them in a strategic way.

3. Retreats can help when there has been or will be a crisis. When business trends or events project a looming crisis, a retreat can help bring focus to the problem and identify possible solutions. And when a crisis has already occurred, a retreat can help debrief the organization's response and prepare for the future in the new environment. And dealing with these issues without the pressure of daily work and management can be a real plus for finding creative solutions.

4. Retreats can enhance teamwork. In the daily grind of organizational activity, relationships among coworkers are sometimes strained. While in many organizations, teamwork on the job is encouraged and rewarded, in some companies the emphasis is on individual performance. In those organizations, teamwork must be encouraged and stimulated in other ways. A retreat is an excellent way to build trust among coworkers, to enhance communication and to clarify roles and responsibilities.

5. Better ideas are generated at retreats. Changing the environment usually results in a change in the way people think and solve problems. There is more "outside the box thinking" when participants are outside their daily and routine "boxes" at work.

After working with his peers, Frank felt he had all the ammunition he needed to develop his recommendation. In a future article, Frank will share his outline for the XYZ retreat and his checklist for making a retreat successful.

Strategic Planning 101--Why Measure Performance?

Paul Epstein, a noted author on performance measures has defined performance measures as "a systematic attempt to learn how responsive an [organization's products and] services are to the needs of the [customer] and the [organization's] ability to pay." Measuring performance offers an effective method of determining whether or not an organization is meeting its goals and achieving its mission.

Generally, performance measures fall into one of four categories. These are:

Inputs are the resources that an organization uses to produce goods or services, including human, financial, facility, or material resources (e.g., number of dollars expended or tons of material used).

Output Measures are tools, or indicators, to count the services and goods produced by an organization. The number of people receiving a service or the number of services delivered are often used as measures of output.

Efficiency Measures are indicators that measure the cost, unit cost or productivity associated with a given outcome or output.

Outcome Measures are tools, or indicators, to assess the actual impact of an organization's actions. An outcome measure is a means for quantified comparison between the actual result the intended result.

What Can Metrics Do For Me?

The accounting firm of Price Waterhouse has offered three main reasons for establishing metrics in an organization.

1. Measurement clarifies and focuses long term goals and strategic objectives. Performance measurement involves comparing actual performance against expectations and setting up targets by which progress toward objectives can be measured.

2. Measurement provides performance information to stakeholders. Performance measures are the most effective method for communicating about the success of programs and services. For example, in public education, states and school districts routinely issue "report cards" highlighting test score outcomes and other key indicators of educational performance. These have become centerpieces of attention among not only educators, but many other stakeholders.

3. Measures encourage delegation rather than "micro-management". Hierarchical structures and extensive oversight requirements can obstruct organizational effectiveness. Performance measures free senior executives for more strategic decision-making and selective intervention, while clarifying the responsibilities and authority of managers.

The Benefits of Performance Measurement

1. Performance measurement enhances decision making. The process of developing performance measures allows an organization to determine its mission, set goals for desired results, and identify methods of measuring how well the results are achieved. The data generated through performance measurement can be utilized in determining program effectiveness, in evaluating options for service delivery, and in charting long-term programs and fiscal plans. For boards of directors, performance measures can focus attention on outcomes, and can allow for solid evaluation techniques.

2. Performance measurement improves internal accountability. Measuring performance gives decision makers a significant tool to achieve accountability. Employees at all levels are accountable to upper level managers for their performance or that of their crew, and upper level managers are accountable to executives. This relationship becomes much more clear when outcomes and outputs are measured by a commonly accepted standard. Systems such as management by objectives (MBO) or pay for performance plans can be much more effective when teamed with a high quality measurement system.

3. Performance measurement supports strategic planning and goal setting. Without the ability to measure performance and progress, the process of developing strategic plans and goals is less meaningful. While there is clearly some benefit to thinking and planning strategically, the evaluation of such plans and goals cannot be objective without measuring performance and achievement. For example, one strategic initiative of secondary education might be to prepare non-college bound students to be effective in the labor market without higher education. If a high school were to set such a goal, and then not identify ways to determine how well prepared students were upon graduation, the school could not know how well its vocational programs were meeting the objective.

Organizational metrics are important for all organizations--public, private and non-profit. Working with employees, management, and affected stakeholders, organizations involved in strategic planning can develop measures of performance in the production of goods and services and in meeting the organization's most important objectives.

Strategic Planning 101--Goal Setting

"We hope to improve our market position" or "We will have a market share of 25% by January 2005."

Which goal works better and why?

The development of goals is the third step in effective strategic planning. In earlier articles, we reviewed establishing a mission statement and defining organizational values.

Goals Must Be Built on a Foundation

Goals can be defined as a written target of where an organization or an individual wants to be within a specific time frame. But goals must be built on a secure foundation in order to be meaningful and to help the organization achieve its mission.

Hyrum Smith, founder of Franklin Quest, later Franklin-Covey, Inc. developed a model of goal setting which is instructive. Smith's "Success Triangle" puts governing values at the base of the goal setting process. Smith recommends that every goal be linked specifically to a governing value. For example, if diversity in the workforce is a value espoused by an organization, then there must be at least one goal which furthers diversity. Every goal should be linked to a governing value.

Do Your Goals Measure Up?

Effective goals have four common characteristics which, when followed, will make achievement more likely and planning more precise. These characteristics are

1. The goal must be specific. The more specific the goal is, the more likely the organization is to achieve it. Using the two goal statements above as examples, you can see that the first goal is very general. Even a 0.5% increase in market share would be an "increase." The second is much more specific and precise.

2. The goal must be measurable. There must be a way to determine whether or not the organization is making progress toward the goal, and there needs to be a way to clearly define the moment when the goal is achieved. Again, using the two goal statements above, the first is clearly not as measurable as the second. Precisely defining the goal as a market share of 25% allows the organization to measure its current position, and to determine over time whether the organization is getting closer to or further away from its goal. One can also determine trends and can identify which objectives make the biggest difference in reaching the goal as time goes on.

3. The goal must be targeted. Will the goal lead to the desired outcomes? Does the goal accomplish the mission of the organization, or at least contribute meaningfully to the mission? When evaluating the two goals mentioned earlier, we would have to examine the company's mission statement. For example, increasing market share may be wholly inappropriate for a food pantry for the homeless.

4. The goal must be time specific. Tying a goal to a deadline is critical. It allows the objectives which flow from the goal to address both direction and speed. Goal achievement is usually based on a specific time frame, and accountability for achieving the goal is significantly enhanced when it is linked to a deadline. Our second sample goal above is very time specific; the first one is not.

Additional Goal Setting Tips

Here are some additional ideas in making goals effective.

1. Avoid contradictory goals. Sometimes goals are set which are in conflict with one another. Be cautious to evaluate the relationship among goals before finalizing them. You are setting the stage for failure somewhere if two or more goals are mutually exclusive.

2. Write goals in the positive, not the negative. Focus on what you hope to achieve, not what you want to leave behind. For example, the goal "We will be in the upper 50% of similar companies in terms of revenue by 2004" is better than "We will not be ‘cellar-dwellers' any more."

3. Set high goals. Don't be concerned if a goal is not immediately achievable. Experience suggests that progress will be greater on a goal that is just beyond the reach of reality than on one that is too easy to achieve.

For good examples of corporate goals that meet these criteria, visit the California Department of Pesticide Regulation, Plymouth State College, and the School of Library Science at Catholic University.

Putting your energies into developing effective goals that link to values, that are measurable, specific, targeted and time sensitive will pay huge dividends as you work to achieve your corporate mission.

Strategic Planning 101--Developing a Mission Statement

"To provide economy and quality minded travelers with a premier, moderate priced lodging facility which is consistently perceived as clean, comfortable, well-maintained, and attractive, staffed by friendly, attentive and efficient people"

This mission statement, developed by the Courtyard by Marriott chain, is one of the best examples in business and industry of an effective and powerful mission statement. The development of such a mission statement is a critical component to any organization, and the fundamental step in the strategic planning process.

The Reasons for a Mission Statement

Developing a mission statement is a challenging process if done well. Organizations need to make a commitment to the process, but the benefits are well worth the effort. The following benefits can be realized by an organization embarking on the mission development path.

1. Missions promote unity. A well-written and understood mission statement can rally the entire organization around a core set of values and reasons for being. Focusing on the most important purposes of an organization brings clarity to expectations.

2. Missions help allocate scarce resources. No organization has all the resources it could use, whether financial, environmental or human. Resource allocation decisions are among the hardest, but linking those decisions to an organization's mission makes them more reasoned and defensible.

3. Missions help move from ideas to action. Undertaking the strategic planning steps of goal setting, developing objectives and defining measures are impossible without the critical step of defining the mission. This applies to the organization as a whole as well as to subunits and individuals.

4. Missions establish culture. The culture of an organization emanates from the entity's mission and from its leaders. The effort to modify organizational culture can be daunting, but the acceptance of an organizational mission statement can ease the task and help overcome resistance to these changes.

The Characteristics of a Mission Statement

According to the CCH Business Owner's Toolkit, a mission statement should have the following four attributes to be successful.

1. Elicits an emotional, motivational response in employees. The rank and file should be able to identify with the mission statement, using it to make decisions and focus their energies.

2. Be easily understood and be transferred into individual action. The mission statement should be a practical tool to allow employees to see how their part of the organization relates to the greater whole of the mission. At its best, a mission statement breathes daily in the lives of the employees.

3. Is a measurable, tangible goal. Employees, managers, shareholders and other should be able to measure the organization's performance against its mission. Lofty, ethereal missions are less effective than measurable, quantifiable ones.

4. Is rooted in the competitive environment. Each organization is in competition for something; even monopolies have to maintain value in their product. There is not much value today in having a monopoly in buggy whips. Measuring the competition and linking your mission statement to competitive advantage works.

One Way to Craft a Mission Statement--The Q&A Model

While the development of a mission statement takes time and effort by many factions, the effort normally should center around getting answers to three vital questions, and then building those answers into the mission statement. The questions are:

1. What is our most significant market? Whom do we serve? Who makes our business worthwhile? Which part of the market is our target?

2. What is our contribution to the market? What value do we add to the customer's life and work? How are the members of our target market better because of us.

3. How do we rise above the competition in making that contribution? What distinguishes our product or service from our competitors? What SHOULD distinguish us? What is our unique niche?

As these questions are evaluated, a mission statement will start to evolve. Look at the Courtyard by Marriott statement at the beginning of this article. Let's see how it measures up.

At Courtyard, the significant market is economy and quality minded travelers. Courtyard contributes premier, moderate priced lodging facilities to their market. True, but so do many other hotel chains. Courtyard's distinction is that its properties will be perceived as clean, comfortable, well maintained and attractive, with friendly, attentive and efficient people.

By following these guidelines, your organization can work to develop its own powerful and effective mission statement, and receive the significant benefits that follow this critical process.

In future articles in this series, we will cover issues such as establishing organizational vision, goal setting, developing action plans, and using performance measures.

Strategic Planning 101--Identifying Your Organizational Values

"Honesty and Integrity, Excellent Customer Service, High Performance, Openness and Teamwork, Respect for Diversity, and Forward Thinking."

These are the core values of the City of Yuma, Arizona, as articulated in their Strategic Plan. This is a great example of a statement of values, the second critical step in the strategic planning process.

In this second module of Strategic Planning 101, we examine the value of values. Why is value identification important and relevant to strategic planning? And how do we identify them in an organization?

The Purpose of a Values Statement

Values are the set of beliefs held by the organization; every organization has them. Values are the underlying principles that guide operations, decisions and staff. They are what drive the priorities of employees and managers and how they act within the organization. They are the basis of the ethical standards in dealing with employees, customers, vendors and competitors.

A values statement is essential to good strategic planning because values underlie the decision-making process. Ignoring the cultural values of an organization is disastrous for a strategic plan because regardless of the plan, major and minor decisions alike will always align with the culture but not necessarily with the mission. Identifying and incorporating the values into the planning process will assure that goals, objectives and strategies will be achievable.

How to Define Values

In any organization, there are two sets of values. There are the real values that drive current decision making. In addition, there are preferred values, which an organization believes should be real, even if they are not. It could be, for example, that an organization hopes to value diversity, when the past behavior of the organization suggests otherwise.

A consultant should identify both real and preferred values in his work. This will help articulate not only what the organization desires to be, but the capabilities of the organization to meet that ideal.

In identifying values, a very open and inclusive process should be followed. Employees, managers, customers, stakeholders, and the broader community should have the opportunity for input. It is not enough to brainstorm with senior management. Because this process is so pivotal to the whole strategic planning process, there must be broad ownership of the final product. The more and broader the input, the easier the final plan will be to sell.

A values survey is a good empirical way of at least narrowing the options. Open ended questions can usually help identify values. Consider questions such as:

• When deciding how to solve a particular problem, what factors enter your mind?
  
• If presenting a recommendation to your boss, what questions will he likely ask?
  
• If this organization were considering a major strategic shift, what factors would it take into account before acting?

Additionally, the survey might contain a listing of potential values, asking for a rating as to which ones enter into the decision-making process, and which ones should but do not. Those with high rankings in both real and preferred values could form the basis for a values statement.

Individual interviews and focus groups with various stakeholder groups would allow for additional clarification. Issues such as "What do we mean in this organization when we say that we respect our employees?" and "How do you know when this organization puts customers first?" can be the topic for interviews and group discussions.

When discrepancies are identified between actual behavior and preferred values, these can form the basis for goals and objectives for the organization.

A well-crafted statement of organizational values can form a strong foundation for the strategic planning process. A thorough and inclusive process led by an independent third party consultant can bring objectivity and meaning to that process and its end result.