People want to do what they are good at, and it makes sense to let them do that. However, doing well on an individual basis is not enough to succeed. You need to do well at the micro, as well as ensuring that your bit is making a positive contribution to the macro, the efforts of others.
Alignment in the jargon, but it is more than that.
Success in business requires that everyone understands the impact on the business of the decisions they take every day, like taking a ‘sickie. Taking a ‘sickie’ impacts on those around who are relying on the output you would normally deliver. To cover the shortfall entails the added cost of standby capacity, or ‘shorting’ a customer. Therefore, the more everyone understands about the numbers that reflect the performance of the business, the better.
This is not to make everyone accountants, which is the conclusion many jump to, it is just about understanding.
We often use sporting analogies in business, they are easy to see.
This is because business shares four common characteristics with sport.
- There is a goal, in its simplest terms, to win.
- There are rules.
- There is a scoreboard, which in business is normally kept hidden, sometimes deliberately, but most often by default,
- There are rewards for winning.
In our sporting team, every member of the team ‘owns’ part of the result. If we extend the analogy, for a business to be successful, we need the stakeholders to think and act like owners, they have a stake in the overall success of the business.
This goes way past picking up the pay check on a Friday. The things an employee typically wants from an employer, in addition to the pay check to keep the kids fed and housed, are job security, time off, promotion prospects, the opportunity to learn, to be appreciated, and to be able to see the job as way more than a daily grind. They worry about these things.
By contrast, owners and senior management while having all those same worries, are also concerned with all the things that deliver to all stakeholders: satisfied customers, revenue growth, cash, cost control, growth, ROI, which are all necessary if the employees are to be rewarded.
Their goals are the same, it is the language and context that are different.
However, we do have a common language, easy to learn to a sufficient level of understanding to be useful.
That language is the income statement, balance sheet and cash flow statement.
I hear groans: understandable.
Accountants have made these three simple ideas incomprehensible to most people. In unwitting collaboration with the regulators, they have complicated the simple ideas to suit their own purposes.
Broken down to the simplest form, these three reports provide the rules of the game, and the critical numbers that enable everyone to understand the score, while they provide the means to ensure everyone in the game understands their role and stake in the outcome.
To answer the question in the header: to build a successful culture you need to ensure everyone in the game understands the rules, and the way they apply in a volatile environment.
Header cartoon: Courtesy Hugh MacLeod at Gapingvoid.com
