Eight key steps to a successful high performance business revealed:
There are two certainties in today’s business environment: Change is a given and sustained performance is not. As a critical member of the leadership team, you, the senior financial executive is forced to deal with both. The test of executive leadership is the ability to develop a high performance organization — one that focuses on successful execution in the face of change and uncertainty.
The Starting Point
In looking at how organizations maintain long-term profitability, one characteristic that stands out is a leadership team that thinks and acts strategically. While the bottom-line must be the ability to execute at a functional level, your team should begin by looking “out” into the business environment, then “down” into the organization. Each member of your leadership team should then be challenged to focus on the big picture, to avoid taking or defending a departmental perspective from the outset. Instead, your team must demonstrate an obsessive need to scan the environment, assess organizational capabilities, make informed business decisions and align — or realign — the organization as necessary.
The End Game
A second characteristic of the high performance organization (HPO) is the level of accountability that individuals exhibit in the day-to-day execution of their jobs. What drives their performance is clarity of expectations. What seems like a simple requirement is actually very difficult to accomplish, particularly as an organization adjusts to changes in the business environment. What is it that the leadership team and subsequently the organization do to create clarity in a world where shades of gray overshadow black or white situations?
The HPO Roadmap
A high-performing organization is the result of continuously aligning eight critical elements.
Figure 1: The HPO Roadmap
Step 1. Determine the Strategic Drivers
As mentioned, the leadership team begins down the road to high performance with a scan of the external business environment. This step entails an understanding of:
- What is critical to your customers
- Your competition
- Your need for strategic business partners
- Your market opportunities
- Your loss or addition of major accounts
- New technology
- The economic picture
- The political landscape
- Challenge of managing across cultures, geographies and time zones
- Resource availability
- Government regulations
Step 2. Assess Organizational Activities
The senior financial leader of your organization brings a specialized competency to the team as they assess the gaps between the critical business drivers and the organization’s capabilities. Because of their expertise and experience, financial executives educate and lead the team in a financial analysis of options, driving the team to think strategically and make informed decisions.
Figure 2: Business Gap Analysis
Step 3. Develop Strategies
What is the plan to win? Again, your financial leader is a key player in the development of:
- Solid business case
- Competitive positioning strategy
- Assessment of whether to develop versus acquire capabilities
- Cost-benefit and due-diligence analyses
- Assessment of risks and tradeoffs
Step 4. Align Strategy, Processes and Structure
At this point in the process, the members of your leadership team wear two hats — as business strategists and functional leaders. As strategists, they need to nail down priorities, align resources and articulate the strategic goals and high-level metrics to the organization. As functional leaders, they develop operational plans that need to align with the overall strategy.
This is the point at which your senior financial leader has the first real opportunity to develop and accelerate the level of performance inside the functional organization. It is essential to eliminate bureaucracy by using the overall business strategy as criteria for streamlining the departmental structure and its critical business processes.
Step 5. Define Roles and Responsibilities
This is the most influential step in the development of the HPO. By aligning individual measures of accountability and job tasks to the business processes, your senior financial leader, like his/her executive colleagues, has to “push” the strategy deep into the organization. Job clarity is fundamental to creating and sustaining high performance.
Step 6. Create Job Standards
To further refine the process, job standards are developed to include skill sets, competencies and behaviors needed to perform successfully. Job standards enable an individual to take responsibility for their own performance. These standards are by no means static. When businesses change, jobs change. When jobs change, skill sets and competencies change. Thus the process for developing job standards is actually an ongoing dialogue between the manager and the employee to clarify performance expectations.
Step 7. Identify and Close Performance Gaps
At both an organizational and functional level, there needs to be systems and tools in place that facilitate skill assessment, performance management and targeted training and development activities. These processes need to be practical, easy-to-use and capable of enhancing the development of the “right” skills and competencies.
Step 8. Manage Talent and Develop Leadership Skills
The ability to sustain a high level of performance over time requires identifying the next generation of leaders and developing the overall level of talent throughout the organization. What competencies are required in the future? Who are the role models and what are their responsibilities for developing tomorrow’s leaders? How does the organization hang on to its talent?
The diagram below of the HPO Alignment Model illustrates how these eight elements inter-relate and must continually align for effective and sustained performance.
Figure 3: HPO Alignment Model
As a member of the leadership team, your senior financial leader is at the center of a high performance organization. Their ability to think strategically, to look continuously out into the marketplace and translate change into a meaningful set of job standards for employees inside the finance and accounting function, are contributions of the financial executive that leave an indelible mark on the organization’s success in performing at the highest levels.