3 Proven Strategies for Improving Employee Alignment to The Strategic Plan from NACCO

Naaco

 

A simple mathematical function can help describe the root-cause behind many companies failed efforts at strategic planning.

It is a common pitfall that companies first create their targets and budgets, and then develop their strategic plan around that foundation.  In essence, the strategic plan becomes a function of targets.  In this type of strategy, promoting accountability becomes almost impossible in volatile and unpredictable emerging markets.  With the budgets and targets setting the direction and path forward instead of the strategic plan, many companies become victims to their own financial urgency and end up laying the groundwork for their own demise.

A subtle yet clear swap from the first model results in a much more reliable strategic plan, and NACCO’s Managing Director of Asia Pacific Andrew Satterley is one of the few bright minds capable of distinguishing this difference, and changed his company’s planning into the more effective model.  In this model, the strategic plan exists as its own entity, and targets are derived from the pre-established and overarching growth strategy.  Andrew was willing to sit down with Frontier Strategy Group and share three of his best practices for ensuring that his employees buy into the strategic plan, can execute on the initiatives, and manage results on an ongoing basis

1) Know where you stand

With NACCO’s Asia Pacific headquarters managed from Australia, Andrew recognized that they were losing touch with core marketing leads in different countries due to lack of contact.  One of Andrew’s first steps was to not only localize the regional headquarters closer to the region, but to do a thorough examination of NACCO’s local business.  He spent months observing organizational structure and sales processes, and also implemented external surveys of customers as well as staff to understand how they were perceived in market.  Afterwards, Andrew used the results to create a robust SWOT analysis and develop a vision for their plan of attack in the future.

AS: “We decided we needed to document where we are, where we want to be, and how we want to get there.  A lot of the times it’s always about the next sale etc, but I need to understand our overall objectives, numbers should be an outcome of our strategic direction”

2) Give employees the strategic plan…literally

For Andrew, every single person in the organization gets a copy of the strategic plan, from the head of a business unit to the person working a factory line job at 4am.  Every single person gets walked through the plan and the why/where/when/how, going through the relevant details line by line.  This has led to tremendous amounts of idea-generation through employee feedback.

AS: “I take them through why we are sitting down, what we expect, and depending on who I am talking to we will take them through the relevant parts of the plan (accounting gets accounting, warehouse manager gets warehousing).  When I listen to my front-line people react, I have heard some fantastic ideas”

3) Improve succession planning, transparency, and visibility

Employees who only receive cascaded down information often struggle to make the connection between their purpose and corporate objectives.  Andrew realized that a mandate-down approach doesn’t yield the desired employee alignment, so he made a concerted effort to give employees a clear view into why changes were being made.  By improving employees understanding of the strategic plan, how they fit in, and how they can grow with the company, Andrew was able to achieve improved employee engagement and alignment.

AS: “Some of the best ideas come from people on the floor, when I speak with someone who is in it every day it can really change the thinking.  A lot of it [employee alignment] is improving succession planning and training.  We want to give them as much information as possible to that they have confidence in not just the company but also themselves”.

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