In the first two articles of this series, we discussed how to engage visionaries in order to better reach a North Star vision and how to turn people from being a key risk into a key opportunity during a transformation journey.
Another critical success factor in a company’s ability to reach their North Star is the ability to keep their eyes on the prize. Too often, organizations get caught up in new technologies – embracing what’s hot as opposed to what is most relevant. This can lead to companies spending a significant amount of time and money on changes that do not contribute to their vision or, in some cases, even act counter to it.
That’s not to say organizations shouldn’t be adaptable. Given the length of time it can take to reach their North Star, companies have to be able to adjust their route along the way.
To do this, companies should consider all of their decisions from the perspective of, “Will this change move us towards our North Star?”
Taking an outcomes-driven approach to decision-making
Companies can ensure they remain headed in the right direction by embracing an outcomes-driven approach to decision-making. Such an approach requires a company look at every opportunity or change in terms of its projected value and contribution to the North Star vision. These anticipated outcomes can then be used to guide the design or modification of a specific solution and related operational processes, and as a target against which to monitor and measure results over time.
For example, if a company’s desired outcome is to reduce inventory by 10%, they should embed the outcome into the early design features of the solution and show how, over time, changes such as automated or streamlined processes will result in the desired reduction.
Where to start
Over the course of our work, we have identified three key actions that can help companies embed an outcomes-driven approach into their North Star transformation journey. These include:
Determine what you are trying to achieve – and obtain buy-in
To achieve the best results, companies need to define what success looks like and obtain buy-in from relevant stakeholders and from the project team. This means that when developing a North Star vision, business leaders should take time to fully define what outcomes they want to achieve (e.g. reduce inventory by 10%) and what needs to happen in order to achieve those outcomes (e.g. increase visibility of supplier on-time performance, improve predictive analytics as to materials requirements, use automation to accelerate order processing). By focusing on outcomes from the get-go, companies and project teams can ensure that day-to-day decision-making remains focused on the outcomes that matter long-term.
Incorporate long-term outcomes into short-term decision-making and accountability processes
Project teams can easily get sidetracked by focusing on a specific ‘Go Live’ date or other short-term measures of success rather than on long-term desired outcomes. To go live quickly with a specific solution, a project team might make decisions that appear sensible from a short-term perspective but that create roadblocks to future steps in a company’s North Star transformation. To smooth the longer-term journey, companies should incorporate outcomes-focused decision-making into their accountability processes for all change initiatives. Recognizing that successful transformation often requires a narrow focus on Minimum Viable Scope early on, the project team should embed consideration of how potential actions build toward – or do not hinder – reaching the North Star into their critical decision-making processes.
Create long-term incentives that are meaningful
It can be difficult to keep people focused on a long-term goal. This is because most companies reward performance based on short-term results. Similarly, employees often get caught up in short-term thinking, looking forward only a few weeks, months, or maybe a year. If companies want people to buy-in to a North Star vision, they need to make it well-worth their people’s while. For example, if a large company reduces its inventory by 10%, it will likely improve its cash flow significantly. To achieve this outcome, however, the company likely requires critical employees to make a concerted effort for several years. To harness and retain the commitment of these employees, companies need to design incentives that will matter significantly to them (e.g. a 20% bonus in two years should results be achieved) – and then provide clear and ongoing communication as to progress against the desired outcomes.
Turning ambition into reality
For most companies, reaching their North Star might be a highly ambitious endeavor, but it is not an impossible one. By incorporating an outcomes-driven approach into decision-making processes – in addition to engaging visionaries and getting the people approach right – companies can make sure that every project they undertake moves them one step closer to their North Star without risking their business along the way.
A few final words
We hope you've enjoyed this article series about the three critical success factors that can help your organization reach its North Star – the long-term vision of your organization – without losing direction or risking its business along the way. Considering the era in which we currently operate
About the Author
Stephen Thomas, Vice President, Consulting and Solutions at Illumiti
A graduate of the University of Waterloo, Stephen is a senior consulting executive with more than 20 years of SAP software implementation experience across a diverse range of industries including high tech, chemicals, commodities, mining, Mill and EC&O.