What a difference words can do!

Title: What a difference words can do!

In my young days I worked for a big fortune 250 company. As the financial controller working in the shared services department, I had an experience which, I will never forget. All the managers (40 in total) were gathered for an extended management meeting and as a young controller I watched the Vice President speak to the managers.

He started his speech with good words. As we were in the corporate shared service center of a company of 20000 employees we were often regarded as "cost center" and "overhead". We were not a part of the core business. But that day the Vice President "raised us up" and gave us value and new energy.

He started by saying "you are the oil in the machinery" and "without your services our company could never operate". "You are valuable and the work you do is very valuable for the company". Then he started telling some challenging things to us like the overall cost in the company was too high, and that this was discussed in the last management meeting with the CEO and all the VP's. The Group had to cut cost of about USD 100 million... and he continued with his magical words that transformed all of us:

"I am so proud of representing the shared services division, and I know what capacity is there in you. And I believe so much in you. So in the top management meeting I "jumped up" and said "I believe so much in my shared services division – we will take half of the cost cut".

Normally this would have made people angry. I have never met people that are comfortable with cutting costs. But the VP’s speech changed it all. He gave us value and he believed in us. The result was outstanding. In less than one week we had a plan for the cost cut and we managed to keep our new budgets.

May be business schools should have more psychology in the subjects they teach. It is all about humans - Winning the hearts and minds of the people.

Author : Tor Inge Vasshus


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Title: Don’t just keep running faster – rather stop and ask 7 important questions

Have you sometimes been told that you need to be more productive? You need to work harder? You need to be more efficient?

Most people, when they hear these words, think that they need to speed up their work. “The management thinks we are too slow.”

Efficiency and productivity are in most cases not linked to the speed of work. In fact, efficiency and productivity comes from the following:

    Making sure what you contribute towards fulfilling your company’s strategy. (Justified by strategy – adding value)
    What you do – do it right. (Right quality)
    What you do – do it the right way. (Right process)
    Prioritizing initiatives and choosing which ones to do first, second, and which ones to never do. (Project management)
    Making sure what you do can be justified economically. (Financial management)
    Making sure that you have the needed skills to perform the job. (HR management)
    Making sure that what you do is within the acceptable levels of risk. (Risk management)

None of the seven check points on the list above ask you to “run faster”. Hence, the key to productivity and efficiency is actually in making better decisions on key issues like quality, process, projects, financials, HR and risk.

In a world where the speed of business is increasing, it is important to not just speed up the “hamster wheel”, but to speed up the thinking process and ask these fundamental questions. And if you are honest you will experience increasing efficiency and productivity in you and in your company.

Author : Tor Inge Vasshus


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KPI Mania

Title: KPI Mania

I have been visiting several customers lately and have been seeing their scorecards. Among all, particularly in banking and finance I noticed that their scorecard is populated with up to 100 KPI's! 

They might have an objective - "high uptime on our critical banking systems" with 50 corresponding KPI’s that show the uptime status on each of the critical systems. The scorecard looks overpopulated and it is not easy to read how well they are executing their strategy.

My advice to companies that tend to fall into this "KPI Mania trap" is to consolidate.  Instead of having 50 KPIs - one for each critical system _ you can make one KPI for "uptime critical systems" and show the status of all the 50 systems within that one KPI. You might want to put some rules that turn the KPI to red if one or some of the systems have had a bad uptime.

By doing this you can have a cleaner "first page" about your strategy execution and leave all the operational control parameters hidden "inside" the model.

Author : Tor Inge Vasshus


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KPI Bazooka

Title: KPI Bazooka

KPI Bazooka - are you measuring everything that moves - or are you measuring the KEY things?

KPI's (Key performance indicators) are a vital part of your Strategy Execution system. We should probably take a closer look at the three magic letters and see what they contain:

K - Key - remember only the important - the "key" - the few. I see many companies going into the KPI trap and measuring everything that moves. All things that "move" are subjects for measuring, but the question is still the same: is it the KEY? And KEY to what? Is it the Key to see that you are executing your strategy well?

P - Performance - are we trying to find out about the Performance? Or are we just gathering statistics, counting, and collecting all meaningless data?

I - Indicator - are we aware that what we are presenting as KPI's are just indications? If it was the "full truth" it would have been another abbreviation - KPT - Key performance Truth. But we are not trying to tell the "full and only truth". We are like doctors, only trying to make indications - good indications. If people say to me "this KPI is not measuring the 100% truth", I agree with them. It will tell them what the "I" is representing, and moves on from that. This makes the conversation between employees and managers much easier.

Good luck with your KPI selection and don't forget the three important letters K,P,I.

Author : Tor Inge Vasshus


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Culture eats Strategy for lunch

Title: Culture eats Strategy for lunch


I have come across this quote several times in the last few months. I have been thinking about the reality of this quote. Why isn't it strategy that eats culture for lunch?!

If we just compare the power structure of it, you will see who wins:



Why culture wins and eats strategy:


Rational/ logical

Emotions are strong. Just think of the power that is released in people when it comes to the emotions of 'love' and 'heart'

Based on the past

Based on the future

Most organizations (read people) are making decisions based on past experience. You can never re-do your past - but you can certainly change your future.

People driven

Business driven

Most people tend to do what is best for them - not what is best for the company. We can ask "are employees working for the company to prosper, or is the company made for the people to prosper?". In most organizations people have enormous power (informal power)

So, when you see the power balance between culture and strategy - I think it is time that we take the "alignment" part more seriously. Not only aligning and giving part of the strategy to individuals, but really aligning the company’s culture with its strategy. If not done properly culture will eat strategy not only for breakfast but for lunch and dinner as well !

Enjoy your meal...

Author : Tor Inge Vasshus


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Strategic communication

Title: Strategic communication

We all know from our own marriages how difficult communication can be! There are structural differences in the male and female brains, which make us misunderstand messages.

I once heard a story on how difficult communication can be between two countries. This story is from 1979 and is about the Egypt-Israel Peace Treaty. If today, you ask an Egyptian if they are at "peace" with Israel, they would claim "yes". The word peace for an Egyptian means "we will not harm our neighbors".

If you turn to an Israelite and ask if Israel has achieved "peace" with Egypt, he would most probably say "no". The reason for this is that the word "peace" (shalom) for an Israelite means more than not harming/fighting with your neighbor. It encompasses qualities like brotherhood, love and joy. So this warm, loving friendship is contained in the word "peace" for an Israelite.

So words have different meanings based on language, history, background, education and so on. I see the same when I challenge businesses. When I challenge statements like "we should be the best in banking", different individuals put different meanings to this. What is "best"? What do we mean by "banking"? Do we mean "the best", or just among the best? Should we be the best in all areas of banking, or just in certain areas? I think it is important to do this kind of exercise and clarify our strategic communication.

If you are not sure what is meant by your company's strategy - please ask for clarification. If you are a manager - you can never over communicate strategy.

Author : Tor Inge Vasshus


Explore our resources to learn more about techniques and the value of effectively communicating and executing your strategy.

New Management Messiah

Title: New Management Messiah

The Balanced Scorecard has been evolving since it was first mentioned by Art Schneiderman in 1987. Kaplan and Norton branded it and made it known to the world. They further developed it from a measurement system in to a management system, and connected strategy to the theory. Balanced Scorecard is still a widely popular concept around the world and new thoughts are evolving the theory. 

As with any other theory, one day there will be a paradigm shift. The old beliefs will fall and new and better theories will arise. My question is "has the time come already"? When a new guru appears and introduces a new management theory that takes over the position the Balanced Scorecard has today?

The strength with the Balanced Scorecard is in the ease of communication around the words "Balanced Scorecard". The words cover much of the theory.

If you are thinking of becoming a new guru and of introducing a new and better theory, I would like to give you the ingredients for success:

- Link up to Academia (well reputed business schools)
- Build your own CV
- Develop superb presentation skills
- Turn on your charisma
- Write business books (with a portion of your knowledge, do not write all at once)
- Money and fame should propel you to move forward
- Find industry players (Software, management consultants, and event organizers) to take you around the world so that you can evangelize your new theory. (the good thing with this is that they pay for you spreading the word, and it is well paid too)
- Find some high profile company that can be your practical evidence that the new theory is right
- Get articles published in the Harvard Business Review
- Work with the leading business schools to get your word across to the new students
- Find a unique name for the new theory
- If your new theory cannot be told as an "elevator speech" (max 10 seconds) - forget it

If anyone sees the new "Management Messiah" – please send me an email. I would like to get in touch with him/her.

Author : Tor Inge Vasshus


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Performance Management System – For Reward or Punishment?

Title: Performance Management System – For Reward or Punishment? 

Many companies are using their performance management system to control and punish people/ divisions which do not meet their set targets.

Seldom do I hear about celebrating good results. Sales people are probably the ones who get to celebrate for they are likely to have a "gong gong" arrangement to announce when they have won a new contract. But why are we not implementing a more positive approach of defining "celebration rules" as a part of the company's performance management system? You should go ahead and define which events or what results entitle to an official celebration.

I know for sure how much recognition means to me and others and celebration is a way to award recognition. Let your performance management system contain the celebration rules.

One example of how such a rule could be set up is like this:
If target is achieved –› send an email to the local baker and order a cake for delivery –› send out invitations to people responsible for the achievement of the target We need to start focusing more on partying, celebrating & recognizing, because I think this is what drives performance. Recognizing facilitates a positive performance culture.

Good luck – and remember too much cake is not healthy! 

Author : Tor Inge Vasshus


Explore our resources to learn more about techniques and the value of effectively communicating and executing your strategy.

Strategy Elevator

Title: Strategy Elevator

I have visited several companies in the past and many of them have asked me about how to make their performance management system one that reflects strategy. They all wanted to go from a KPI / operational focus, to a more strategic focus and asked for help. My advice was to not even think about what they had in their current Performance Management system. Even if they had good data that was hard to collect, they must just leave it all for a while when structuring a Strategic Balanced Scorecard. This process of “emptying your brain of your beloved KPI’s” is hard for many. Here are my steps on how to connect strategy to your performance management system:

  1. You need to have a strategy to implement – show me your strategy
  2. You need to translate your strategy / structure it
     a. Establish your strategic objectives
     b. Establish your strategy map
     c. Connect your initiatives
  3. At the end you see if any of the KPI’s you had in your performance management system can function as an expression of strategic
      objective achievement or not

Your Strategic objectives decides/ tells you which KPI’s you should use, for the KPI’s should indicate if you can achieve your objectives or not. That is the purpose of the KPI’s in a Strategy focused Performance Management system (Balanced Scorecard).

Some of the KPI’s that you have left out after this process probably represents interesting aspects of performance, but they are not strategically relevant. They might still be important. You can use these KPI’s as additional performance information – but not on the front page of your most important objectives and strategic KPI’s.

So you might find yourself with a lot of extra KPI’s that you haven’t been able to put into this structure. What should you do with the left over KPI’s? Probably send them “down the elevator”. To the KPI grave yard. It’s a quiet, empty place. smiley

Author : Tor Inge Vasshus


Explore our resources to learn more about techniques and the value of effectively communicating and executing your strategy.

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