A large edition of an Organizational Development journal came in my mail between Christmas and New Years. The cover announced their annual 2013 “Total Rewards Conference”. Hundreds of vendors will be hawking thousands of ways to reward people for something. All in an attempt to achieve a higher level of some corporate metric(s)… I think. Or maybe it’s just to make people happy or maybe something for nothing.
In my career, I have asked many presidents, CFO’s, and VP’s, “what are the corporate metrics to which you are personally held accountable”? Answers come quickly, and typically include one or more of the following: net profit, ebit, editda, cash flow (or some variation), return on assets, earnings per share, etc.
Having identified the senior leadership metrics, I leave the room and wander the office, cubes, and factory and ask employees if they know the answer to the same question. They almost never do. If I tell them the answer, and then ask if they can define the metric, they cannot. By it’s very nature this creates and nurtures a culture of disconnection and mis-alignment.
Contrast this observation of business to the experience of watching an NFL football game. Whether the camera pans the players, the coaches, the owner in the sky box, the trainers, or even the water boys… everyone is looking at exactly the same thing. A single, overall, comprehensive representation of performance – the scoreboard. That’s cultural focus and alignment, top to bottom.
Why isn’t there a single, valid, robust, real time, comprehensive scoreboard that accurately represents the performance of your business? It’s not the financial statement – it’s too complicated, too noisy, and usually not very tactical. Rather the “scoreboard” should be the “drivers of profitability” – tactical, visible, and understandable to all, top to bottom. Providing intense organizational focus on what really matters… every day.
And why don’t all your employees participate in the performance of the business – real time, every month? If it could be demonstrated that the primary cause for performance exceeding budget by a wide margin was allowing your employees to participate in real incremental gains in financial performance, who wouldn’t?
Rather than “Total Rewards”, I would suggest we need Total Alignment and Total Commitment. This comes about through a structured strategy of defining, measuring, pursuing, and rewarding performance. I didn’t say it was complicated, I didn’t say it was simple, but it is structured.
There are many uncertainties ahead in 2013. However, one thing is certain. Your employees have much more they could offer if they were focused on a unified scoreboard, and were engaged to be your “partners” in the business.