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Steve Sherre a
April 17, 2013
Performance Management:
Enhancing Execution Through a Culture of Dialogue
Peter is Chief Executive Officer for a medical supply multinational that recently
crafted a new strategy to counter competitive threats. The plan stressed the need
to cut cycle time, concentrate sales on higher-margin products and develop new
markets.
Four months after circulating the plan, Peter did a “walkaround” to see how things
were going. He was appalled. Everywhere Peter turned people,
departments— whole business units—simply didn’t “get it.”
First surprise: Engineering. The group had cut product design time 30%,
meeting its goal to increase speed-to-market. Good. Then Peter asked how
manufacturing would be affected. It turned out the new design would take much
more time to make. Total cycle time actually increased. “Our strategic plan
message is not really getting through,” Peter thought.
Second surprise: Sales. The new strategy called for a shift—emphasize high
margin sales rather that pushing product down the pipeline as fast as possible.
But just about every salesperson Peter spoke to was making transactional sales to
high-volume customers; hardly anyone was building relationships with the most
profitable prospects. Sales is doing just what it’s always done, Peter thought.
Worst surprise: Even his top team, the people who’d helped him craft the strategy,
was not sticking to plan. Peter asked a team member: “Why are you spending
all your time making sure the new machinery is working instead of developin
new markets?”
“Because my unit’s chief goal was to improve on-time delivery,” he answered.
“But what about companygoals?” said Peter. “We came up with a good plan and
communicated it ver
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