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Keys to a Performance Driven Culture

September 16, 2011, Bhaskar Deka -

We all know that having a sound strategy is essential for a results and performance driven culture. But, is clearly defining strategy enough to guarantee success for an entire organization, or does it require more?

According to a study published in Harvard Business Review by Michael Mankins and Richard Steele, there is a wide gap between the projected results in an organization's strategy and the actual results.  On an average, companies achieve only 63% of their projected results from business strategy; more than one-third of the executives surveyed said that they achieve less than 50% of the projected results from their strategy. This means that by improving execution to realize the full potential of their business strategy, companies could increase their value by  between 60-100%.

Barriers to a Results and Performance Driven Culture

A detailed breakdown of the 37% loss (shown in the image in the bottom right) in performance and productivity reveals that the majority of the barriers to execution are people related.

Take a look at the second largest factor in under performance - poorly communicated strategy- as an example (Click on image to enlarge). Studies reveal that, on an average, 55% of the employees cannot clearly state their Company's strategy as well as their role in supporting that strategy. This fosters disengagement and confusion among the employees and ultimately leads to an under performing culture. By establishing an organizational planning system that enables the clear creation and alignment of goals throughout the organization, that are cascaded down from the executive team to divisions, business units, departments, teams and individuals, companies can ensure that any changes to business strategy is effectively communicated throughout the year.

Building a Performance Driven Culture

People are the critical links to unlocking value and as such, HR organizations play a pivotal role. So, what steps should an HR organization take to ensure effective execution of strategy? Forward looking HR organizations enable companies to clearly communicate strategy to employees, help define and manage realistic  employee goal setting, provide foundation for clear and disproportionate rewards for performance, provide framework for clear career path and development for employees, and instills confidence, engagement, and risk taking in the most important asset an organization has – its employees. The aftermath is a transformative workplace with a results and performance driven culture with demonstrable and repeatable impact on business results.

Click to read Keys to Building a Performance Driven Culture – Part II

Please join me and Chris Tratar, Senior Director, Product Marketing at Saba for a webinar where we will talk about  "Seven Keys to Building a High Performance Culture through Effective Execution."

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