How Should Leaders Set Direction

HOW LEADERS SET DIRECTION

Leadership is like a beacon or navigational aid. People must know what the goal or destination is and they require signals over the course of their efforts to confirm that they are on track. No ship’s captain would set sail without knowing the destination and having the ability to know whether or not he was on course. No airplane pilot would take off without knowing the destination and having the capability to validate whether or not the plane was on its prescribed flight path. Yet organizations repeatedly engage in activities and launch new initiatives, products, and technology without understanding or being in agreement on the goal or having the ability to stay on course.

People require three types of information to do their jobs effectively. The first type should come from top leadership, as it is about where the organization is headed, what the priorities are, and what the organization is doing in terms of investment to compete in the marketplace or fulfill its mission. The second type should come from human resources (HR) and the manager or supervisor, as it is about what is expected of individuals in terms of their roles, goals, and performance criteria. The third type comes from the training department and the manager or supervisor, as it is about what to do, how to do it, and why. Managers and supervisors have an important role in assuring that people receive all three types of information. This article focuses on how to use the information that comes from top management to make sure goals, objectives, deliverables, activities, and measures are aligned and understood by the people.

• A goal is an end state or condition toward which human effort is directed.
• An objective is an interim or enabling state or condition that, when combined with other objectives, adds up to the overall success of a company.
• A deliverable is something that is produced to accomplish a goal or objective, a physical or mental object.
• An activity is a combination of behaviors that contribute to creating a deliverable and achieving an objective.
• A measure is an attribute that is used as the basis for judging productivity,
proficiency, performance, and worth from a performance improvement perspective, people deserve clear direction.

They should have some understanding of what the organization is trying to accomplish and what role they play in making it happen. The first principle of performance is to focus on results—to not lose sight of the outcomes that are required to meet the organization’s goals.

Focus is about making sure goals, objectives, activities, deliverables, and measures are aligned and congruent. Once people know the goals, they should know what is expected of them. Once they know what is expected and the direction they are heading, they will require tools to help them perform the job. Finally, they should get cues or signals to help them stay on course.

Here are some common mistakes managers and supervisors make when it comes to assuring people receive the direction they deserve:
1. They assume that the members of top management are in agreement on the goals.
2. They assume that top management has thought through the implications of what they attend to and that they understand the effect of their shifting their attention or changing their message.
3. They assume that what they want to accomplish is understood and agreed
to by the people who do the work and by those who depend on the work
being done.
4. They create plans and set objectives without fully understanding the situation or thinking through the ramifications of their actions.
5. They assume there will be no negative side effects to how they go about work and that, if there are, they are in no position to reduce or eliminate
them.
6. They fail to confirm that what they use, do, produce, and deliver is working
toward the same goal.
7. They fail to exercise judgment when it comes to interpreting top
management’s behaviors or messages.
8. They assume that they are part of the solution and not part of the problem.
9. They fail to validate their assumptions.

Leadership is not about standing up and saying, “I’m in charge!” but it does require leaders to behave in certain ways because it is their behaviors that reinforce or cue people in how to act. Leadership is what assures efforts are focused on the right goals, objectives, deliverables, and activities. It can and must occur at all levels so people are continually reminded of what is important, where the organization is headed, and what is required of them. Leadership
can empower people if they understand where the organization is headed and they have confidence in their leaders. There are two sets of behaviors, in particular, that are especially important to providing direction.
1. Focus on results happens when leaders overtly state what the goal is, what the rules are for carrying out the work, what is and is not open for discussion or debate, what is expected of everyone, and what will be used as evidence of progress and success.
2. Consistency of focus is about leaders consistently sending the same messages
about what the goal is and what is important. Mixed messages confuse people and distract them from the goal.

Performance improvement begins by defining:
• The goals and results that you want to have happen or accomplish.
• The deliverables or outputs required for you to achieve the results and what each group must produce to get the results.
• The side effects of accomplishing the result, specifically the unforeseen implications you want to avoid, whether they are damaged relations or exhausted employees.
• The sustainability of the effort, what it will take in energy and resources
to continue to do the work time and time again.

The terms goals and objectives and goals and outcomes are used interchangeably.
However, there is usually an assumed hierarchy with goals having
a broader meaning and objectives less so. Organizations set goals that are statements
that describe what they want to achieve or become. Objectives are the
interim milestones or deliverables that have to happen to accomplish the goals and they are usually more specific and more measurable.

People are hired to produce deliverables or outputs in the belief that the effort will lead to an outcome, such as more revenue, higher profits, strategic alliances, greater market penetration, and higher retention of customers. What they produce may be things, ideas, or information. However, what is produced or how it is produced usually has side effects that may or may not have been predicted. Side effects can be negative or positive. For example, sometimes the cost of the sale in resources exceeds the revenue gained and inventory cannot
keep up with demand, damaging customer relations.

Sustainability is about the ability to continue to deliver in the long-term given the demand on your current resources. Tradeoffs usually have to be made to continue to sustain the results or reap the benefits over time. Some examples are having sufficient qualified people to sell, perform repairs, and service customers and having the dollars to purchase materials or invest in development.

Deliverables, in and of themselves, may not lead to desired results, and results may not have desirable side effects. The demands on resources to deliver or sustain the result may be so great as to limit the ability to take advantage of other opportunities or respond to new challenges.

Top management defines the goals for the organization. Other levels of management interpret the goals for their departments and then set goals or objectives specific for their groups. Then they develop plans or identify the activities required to accomplish the objectives and define the measures of success. Outcomes are the results that occur after having engaged in activities to meet the goals and objectives. An outcome is successful or not based on the
measures that were used.

Organization Level
• The organization’s goals are profits, societal return on investment, market share, and market demand for products.
• The organization’s outputs or deliverables are all the goods and services it develops and delivers to the marketplace.
• The outcomes are the results that occur from having produced the goods and services.
• The measures are the criteria used to judge success or effectiveness, such as dollars, ratings, percentages, and so forth, both in the short-term and long-term.
• The side effects of having achieved or not achieved the goals are the impact on its brand image and relationships with labor, customers, employees, distributors, third-party partners, investors, and regulatory agencies.
• Sustainability is about having sufficient economic resources, access to materials and talent, and the production and distribution capacity to honor promises to customers, investors, employees, outside agencies, and partners in the future.

Hierarchy of Goals and Objectives
Here are some examples.
• A bank’s goal is to service the financial needs of the community at a profit. A bank’s products or outputs are loans, mortgages, investment advice, and savings and checking accounts. The outcome is number of services rendered and at what profit or loss. The impact or side effect is market share. Sustainability is about having qualified personnel to service customers and the resources to continue to offer competitive products.
• An airport’s goal is to positively impact the economy of the local area. The airport’s outputs are services to airlines and passengers that include landing strips, gates, facilities, parking, and concessions. The outcomes are revenues from gates and parking and jobs for concessionaires and other outsourced services. The side effect is economic impact on the
community from taxes and spending by passengers, workers, and businesses supporting the airport and airlines. Sustainability depends on the airport’s ability to maintain its facilities so it can attract airlines, passengers, and businesses.

Department or Division Level
• The objectives may include marketable products, profits, retention of customers and employees, cooperative labor-management relations, efficient distribution channels, and excellent customer service.
• The outputs or deliverables required to achieve the objectives might include the development of products, marketing strategies, agreements, and policies required to manufacture, promote, sell, distribute, and provide after-market support to the marketplace.
• The outcome is the results that were achieved or what actually happened from having delivered the products or services.
• The side effects may be higher than anticipated customer loyalty, unexpected innovation by employees, higher yields in investments, and the ability to leverage relationships with distributors to service new markets or the opposite.
• The measures might include the number of products that reached market, the degree of market penetration, the number of customers retained, and the level of employee and customer satisfaction.
• Sustainability is having the bench strength in facilities, equipment, systems, people, and processes to withstand new competition, changing requirements, increased regulation, and other market pressures.

Performance Based Management
Here are some examples.
• The objectives of the bank’s loan department include profitable loans. The outputs of the bank’s loan department are its lending instruments, such as mortgages, home equity loans, and college loans. The outcomes are the earnings from those loans. The side effect might be losses from bad loans or an increased number of customers making use of other bank services because of their loan experience. Sustainability is about the loan officers’ ability to develop and maintain relationships with local businesses and residents in the community and continue to offer cost-competitive, yet profitable, products.
• The objectives of the airport maintenance department are good relations with airlines and concessionaires and passengers because of functioning jetways, escalators, elevators, and so forth. The outputs are the repair and maintenance of facilities, such as jetways, people movers, bathrooms, escalators, and utilities to restaurants, concessions, and other retail businesses. The outcome is the level of satisfaction airlines, concessions, and passengers have with the airport. The side effects are avoided complaints and lawsuits due to malfunctioning equipment, power outages, or poorly maintained bathrooms. The sustainability is about the airport having the financial ability to retain qualified people to maintain the facilities and buy quality equipment.

Work Unit, Team, and Individual Levels
• The objectives might include meeting production quotas, satisfying internal and external customers, and controlling costs, as well as setting up capable distribution channels.
• The outputs may be the development and delivery of sub-assemblies, prototypes, marketing materials, training, documentation, and other resources required to build, market, and deliver products to customers, provide customer service, operate systems, and assure that employees are capable.
• The outcomes are the actual results achieved from having created the outputs.
• The side effects could be trust, cooperation, shorter cycle times, safer performance, lower reject rates, and higher productivity or they might be the ability to rapidly deploy staff to new production lines or field offices in response to unanticipated demand or interrupted distribution capability.
• The measures might include the volume and cost of production, the number of distribution channels set up, and at what cost.
• Sustainability depends on the ability to handle increased capacity and changing requirements and on the employees having the energy and willingness to continue to innovate and produce at the same level of intensity over time (If you do not have the right people you cannot sustain performance)

Here are some examples.
• At the bank a loan officer’s objective may be to lend a minimum dollar amount. The outputs are the number and dollar value of loans approved. The outcome is the profit generated from the loans, any losses that may occur, and accurate and cost-efficient transactions. The side effects are satisfied customers and the number of customers purchasing other bank services. The sustainability depends on the loan officer’s continued interest in serving customers and staying current in banking regulations and on the bank’s ability to retain qualified loan officers and friendly tellers.
• The objective of the airport maintenance department is no loss of revenue or life because of accidents on slippery runways or roads. The outputs of the groundskeeping department are clean, cleared runways and access roads and attractive landscaping. The outcome is the amount of revenue lost or accidents that occurred due to poorly maintained runways and access roads. The side effect is compliments by passengers, the airlines’ confidence in the airport, and community pride in the attractiveness of the area. Sustainability depends on the airport continuing to allocate resources for the maintenance of the grounds.