No One Knows Your Strategy — Not Even Your Top Leaders

The CEO of a large technology company (let’s call it Generex) recently reviewed the results of her company’s annual employee engagement survey and was delighted that strategic alignment emerged as an area of strength.1 Among the senior leaders surveyed, 97% said they had a clear understanding of the company’s priorities and how their work contributed to corporate objectives. Based on these scores, the CEO was confident that the company’s five strategic priorities — which had not changed over the past two years and which she communicated regularly — were well understood by the leaders responsible for executing them.

We then asked those same managers to list the company’s strategic priorities. Using a machine-learning algorithm and human coders, we classified their answers to assess how well their responses aligned with the official strategic priorities.2 The CEO was shocked at the results. Only one-quarter of the managers surveyed could list three of the company’s five strategic priorities. Even worse, one-third of the leaders charged with implementing the company’s strategy could not list even one.

These results are typical not just in the technology industry, but across a range of companies we have studied. Most organizations fall far short when it comes to strategic alignment: Our analysis of 124 organizations revealed that only 28% of executives and middle managers responsible for executing strategy could list three of their company’s strategic priorities.3

When executives see these results, their first instinct is to schedule more town hall meetings or send another email blast describing the corporate strategy. The impulse to double down on existing corporate communication strategies is understandable, but unlikely to solve the problem. Our research has uncovered three nonintuitive causes of strategic misalignment and concrete steps that top leaders can take to improve how well the strategy is understood throughout the organization.

1. Acknowledge you have a problem. The first step in solving a problem is recognizing you have one. C-suite executives often assume that the entire company is on the same page when it comes to strategy, but this assumption is usually wrong.4 Our strategy execution survey includes a series of questions designed to measure whether a company has a shared set of strategic priorities, how well those objectives are understood, and whether they influence resource allocation and goal setting throughout the organization.5 Top executives rate their company higher on all of these dimensions than managers lower down the organization do.

The exhibit “Top Teams Overestimate Alignment” summarizes the strategic alignment gap. To interpret this chart, start with the first assessment statement, “Our organizational priorities support our strategy.” If supervisors, managers, and executives outside the C-suite assess their company as average (the 50th percentile in this figure), the typical top team will rate their company at the 67th percentile — well above average. The pattern repeats across every single measure of strategic alignment.6

2. Agree at the top. Lack of strategic alignment often starts at the top. In developing strategic priorities, the top team should agree on a single set of objectives for the business as a whole, rather than each leader pursuing his or her own agenda. Unfortunately, most top teams we have studied fail to agree among themselves on company-wide priorities. For the typical organization we studied, just over half of senior executives converged on the same list of strategic objectives. Bear in mind, we did not measure whether the team members were committed to achieving the strategic priorities; we measured only whether they agreed on what they were.

The results from Generex were typical of the companies we have studied. Just over half of the top team could list all or all but one of the company’s five official priorities. But the other half of the team was completely out of touch. (See “Lack of Agreement on Strategy at the Top.”) Three of the top team members could list only one of the company’s strategic priorities, and two executives did not get a single objective correct — despite having five tries. Between them, these C-suite members listed a total of eight additional priorities that were not among the company’s official objectives.

Of course, not every top team shares Generex’s problem of half the members flying blind. Some teams we have worked with produce a more normal distribution, where most of the senior executives know some of the priorities with a few executives (usually including the CEO) knowing all of them, and others who can name a few or none. The Generex example does, however, underscore the importance of checking whether everyone in the C-suite is on the same page strategically. If executives are not aligned, it is critical to understand why not and address the issues before communicating the strategy more broadly throughout the organization.

3. Bring level two along. Strategic misalignment often starts at the top, but it doesn’t end there. Managers’ ability to correctly list their company’s strategic priorities continues to drop as you move further down the organization, but the rate of decline is not what you might expect. You might predict a steady decrease in alignment as you move down the organizational hierarchy, or perhaps a sharp drop-off among the frontline supervisors who are furthest from the C-suite. In fact, our data suggests the opposite — the sharpest plunge in alignment occurs between the top team and their direct reports, and is more gradual thereafter.

“Alignment Plummets Between Top Executives and Their Direct Reports” plots the average number of managers, at each level in the organization, who can list the company’s top priorities. For the typical company, just over half of top team members can do so. It is pretty bad when only half the C-suite agrees on the same objectives, but things look even worse for their direct reports. Strategic convergence drops off a cliff between the top team (51% agreement) and senior executives who report to the top team (22%).

The gap between the top team and its members’ direct reports is less surprising than it seems at first glance. Top team members oversee their own function, business unit, or geography, but also serve on the enterprise-wide leadership team that charts the course for the company as a whole. Their direct reports, in contrast, are not privy to discussions in the C-suite, and tend to view the world through the lens of the organizational silo they are charged with managing.

Rather than hosting another town hall, top executives should focus first on their direct reports, making sure they understand the company’s overall strategy and how their function, geography, or business unit fits into the bigger picture. One powerful way to do this: Each top executive should consistently explain why his or her unit’s objectives matter for the team and for the company as a whole.

In our sample, half of executives who reported directly to a top team member said that their boss consistently explained how their goals supported the company’s overall agenda. Of the rest, 37% said their boss framed their activities in terms of their team’s objectives without reference to corporate strategy, or their boss struggled to explain why their priorities mattered (12%). Many top team members need to do a better job explaining to their direct reports how their department, function, or regional goals fit into the company’s overall strategy.

To communicate strategic priorities throughout the organization, leaders at every level in the hierarchy should explain why their team’s goals matter — both for their team and for the organization as whole. Across 69 items included in our execution survey, the single best predictor of strategic alignment was how consistently managers — from top executives to frontline supervisors — explained their team’s priorities in terms of their unit and the entire company.7

To quantify the impact of this behavior, imagine a company that is average on every survey item except for one — all the managers explain why goals matter for their unit and the company. A high score on that single item would propel an average company to the top quartile in terms of strategic alignment.

A shared understanding of strategic priorities among key leaders does not guarantee successful execution. But it is a good first step. Widespread confusion and disagreement about what matters most undermine the prioritization and coordination across teams necessary to implement strategy. If managers do not understand what the company as a whole is trying to achieve over the next few years, they cannot align their actions with the organization’s overall direction.

To increase the odds that their strategy is understood throughout the company, top executives should acknowledge that they may have a problem with alignment, agree as a team on strategic priorities for the entire company as a whole, make sure their direct reports understand these objectives, and ensure that leaders at every level in the organization communicate what corporate priorities mean and for the company overall.


MIT Sloan Management Review

When Developing Your Internet Of Things Strategy, Prioritize Privacy And Security

Former Cisco CEO John Chambers famously predicted that there would be 50 billion connected devices by 2020. Thanks to the Internet of Things (IoT), his forecast may soon become reality.

Things such as appliances, cars, medical devices, street lights, wearable technologies, industrial machinery, military equipment, and logistics systems are beginning to share huge volumes of information. Organizations that collect, store, and analyze this data can increase efficiency, cut costs, and make smarter decisions.

Despite this rapid growth, however, IoT technologies are still in their infancy. Consumer devices have drawn the most attention so far, but it’s likely that IoT will have more widespread applicability in business applications.

That’s why executives who want to gain value from IoT technologies need to make hard decisions about this dynamic, maturing technology. Among the most important concerns are privacy and security. To stay compliant with regulatory mandates and to create trusted relationships with customers, companies must protect and secure data.

Protecting data assets – and your reputation

Thinking about what’s possible with IoT is not enough. You must also consider what’s responsible in your data practices.

For example, who owns the data you collect? Is it the consumer, the device owner, or the device manufacturer? In the United States, Internet service providers are now permitted to sell any and all of their consumers’ information without consumer consent. Is it a breach of consumer privacy if the ISP’s customers buy data that tracks individuals’ entertainment preferences? E-mail communications? Online bill payments?

What about data created by an asset that has multiple owners over its lifetime? If a customer rents or leases an air compressor, the company owns the asset and the data it produces. But if the company later sells the compressor, who does the data belong to – the old owner or the new one? Should the data be stored by a trusted third-party to prevent breaches?

Many cars can track driver behaviour. Some consumers elect to share that data with their insurance carriers. But should the car’s technology alert the police or the insurer after every minor accident? Should law enforcement officials be able to access that vehicle data, or does it belong to the driver?

Developing trust

As you develop your IoT policies and strategies, look for ways to increase consistency across all touch points while correlating your interactions with customers’ changing wants and needs.

For consumers who opt in, you can use the IoT to enable a constant feedback loop that can boost product innovation, enhance service interactions, and engender new customer loyalty. For example, imagine a family whose vacation is interrupted by a rainy day. The beach resort that recognizes this need could save the day – and develop a loyal customer – by sending the parents coupons to enjoy a local movie theatre, museum, or bowling alley.

Balancing privacy and security and the insights enabled by data can be tricky in the age of the IoT. But organisations that adopt sophisticated data and analysis strategies for using IoT data – while still protecting customer privacy and security – stand to gain a practically unbeatable competitive advantage.

To learn what leading executives think about the privacy and security concerns in the IoT, read our e-book.

Follow me on Twitter @TomRaftery.

This article originally appeared on Forbes SAPVoice.


Internet of Things – Digitalist Magazine

The Top Eight Questions to Build a Successful IoT Strategy

The Top Eight Questions to Build a Successful IoT Strategy

The Top Eight Questions to Build a Successful IoT Strategy

As 61% of enterprises have already deployed an IoT solution, or are planning to in the next year, it is essential that both enterprises and providers ask the right questions early to maximize their IoT ROI.

ABI Research, has identified eight questions that innovative companies need to ask to turn their IoT visions into reality.

“When these solutions work, they work well,” says Ryan Harbison, Research Analyst at ABI Research. “However, these solutions can have detrimental effects if any area was overlooked in the development of these systems. If execution, technology, or supplier choices are poor, rest assured that the results will be poor. Poor solutions can negatively affect sales of existing products and services, disrupt internal organizational workflows, and damage relationships with customers—all results enterprises want to avoid.”

So, how can enterprises avoid deploying a poor solution?

First, potential IoT end-users need to ensure that they have properly identified the strategic business objectives they are trying to achieve before they create IoT use cases and align IoT use cases to customer needs and these objectives. Secondly, organizations need to achieve internal stakeholder alignment with all functional employee groups since IoT affects multiple layers of an organization to decide which parts of the solution to build in-house and which parts to buy. Lastly, enterprises need to assess partners for IoT enablement and lifecycle management operations keeping in mind that these decisions drive strategic and long-term success.

While it is essential for enterprises to consider these factors before building and deploying an IoT solution, it is also crucial that IoT suppliers understand these factors and guide their customers around the common pitfalls. Two of the biggest inhibitors of IoT adoption are aligning the solution within existing systems and the complexity and fragmentation of the supply chain. IoT suppliers need to understand that potential end-users are looking to partner with suppliers who have worked to ease the process of developing these solutions.

“As a result, we are seeing a surge in the market of companies that offer professional services—strategic consulting services, project management, and ROI analysis—in addition to their core competencies,” concludes Harbison.

“Companies like Dell, Digi International, and Bsquare are among those complementing their IoT solutions with additional value-added services. The number of suppliers offering these solutions will only continue to rise as business value shifts from output to outcome-based.”

Top Eight Questions to Build a Successful IoT Strategy according to ABI Research:

  • What Are Your Business Objectives to Better Serve Customers and Operate Profitably, and the Common Challenges toward Meeting Those Objectives?
  • What Are the Use Cases That Align with Your Value Proposition and Mitigate Business Challenges?
  • What Factors Need Consideration to Prioritize IoT Use Cases for Investment?
  • Who Are the Key Internal Stakeholders Impacted by a Connected Product, and How to Gain Internal Alignment on Risks and Benefits?
  • What Are My Internal Capabilities to Determine Build versus Buy?
  • What Is the IoT Data Governance Model?
  • How Should I Assess Suppliers and Partners for IoT Solution Enablement?
  • What Are the Life-Cycle Management Factors to Consider?

The post The Top Eight Questions to Build a Successful IoT Strategy appeared first on IoT Business News.

IoT Business News

Rolls-Royce to accelerate ‘Digital First’ strategy with TCS

Rolls-Royce to accelerate ‘Digital First’ strategy with TCS

Rolls-Royce to partner with Tata Consultancy Services and deploy its IoT platform on digital transformation journey.

Founded in 1906, British engineering company Rolls-Royce may be most frequently associated with its posh motorcars, but it also builds many other kind of machines, from aircraft engines to propulsion systems for submarines.

Increasingly, these machines are getting smarter. Bristling with sensors, they generate data that conveys information on their performance, status and condition.

Using that data to get the best possible performance from machines lies at the heart of the company’s ‘Digital First’ strategy – and that strategy has received a boost this week, with the announcement that Rolls-Royce is to work with Tata Consultancy Services (TCS) with the goal of accelerating its digital transformation strategy.

This builds on a longstanding relationship between the two companies and, it is claimed, will help “deliver further value to customers, improve existing services, accelerate development and deployment times and create new areas of growth.”

Read more: IIoT could revolutionize UK manufacturing, says Siemens-led report

Digital transformation journey

As part of the agreement, Rolls-Royce will use TCS’ Connected Universe Platform, a platform-as-a-service (PaaS) offering for IoT applications. Here, data from across the company will be captured, shared and analyzed, so that new products and services can be developed.

In addition, the two companies will jointly launch an analytics and agile applications capability hub in Bangalore, while TCS has recently opened a new customer delivery centre in Derby, UK, which is dedicated to servicing Rolls-Royce.

According to Neil Crockett, a former Cisco executive who took the role of chief digital officer at Rolls-Royce last year, “We expect to be able to realize both short-term and long-term benefits through collaboration with partners and customer on the TCS IoT platform. It will allow us to take advantage of fast-paced innovation – including accelerating our application of industrial artificial intelligence and a range of other cutting-edge, breakthrough opportunities.”

Read more: Industrial IoT: Plenty of words, too little action, says GE

Testing times ahead for Rolls-Royce

There is much for Rolls-Royce to prove here. Achieving new efficiencies and harnessing new opportunities is vital for the company, after a somewhat rocky 2016 financial year.

In February this year, it reported a £4.6 billion pre-tax loss for 2016 – one of the largest in corporate history – partly as a result of tough market conditions following the UK’s EU referendum, which sent the value of the pound tumbling, and partly due to payments amounting to £671 million that the company made to British, US and Brazilian authorities in order to settle bribery and corruption claims.

The company has warned that it anticipates supply chain headaches after the UK exits the EU and CEO Warren East is a vocal opponent of a so-called ‘hard’ Brexit, having urged the UK government to deliver “as little change as possible.”

With such challenges ahead, it will be interesting to see to what extent Rolls-Royce is able to use industrial IoT (IIoT) strategies to soften some of the blows it may face.

Read more: Rolls-Royce navigates Google deal on machine learning for shipping

The post Rolls-Royce to accelerate ‘Digital First’ strategy with TCS appeared first on Internet of Business.

Internet of Business

PTC to Accelerate Customers’ Connected Service Strategy with Launch of ThingWorx Asset Advisor

PTC to Accelerate Customers’ Connected Service Strategy with Launch of ThingWorx Asset Advisor

PTC to Accelerate Customers’ Connected Service Strategy with Launch of ThingWorx Asset Advisor

New Asset Advisor App for Service Enables Customers to Accelerate Time to Value.

PTC today announced from PTC Forum Europe in Stuttgart, Germany, the launch of the ThingWorx® Asset Advisor app for service to accelerate its customers’ service transformation initiatives.

ThingWorx® Asset Advisor for service enables remote monitoring and servicing of assets deployed in the field.

Built on PTC’s leading ThingWorx industrial innovation platform, ThingWorx Asset Advisor for service is a role-based app for service managers and technicians that is fast to deploy, scalable, flexible, and customizable. It provides visibility to connected assets with key role-intelligent information, offering insight into the operating condition of the asset, alerts on operating anomalies, and remote service for the connected assets. ThingWorx Asset Advisor for service follows PTC’s launch of the ThingWorx Asset Advisor app for manufacturing this past June at LiveWorx®17 and continues PTC’s commitment to helping industrial companies simplify their digital transformation efforts.

As industrial companies focus on improving efficiency and reducing downtime of their operations, being able to connect and monitor assets to capture critical alerts in real-time is key to an effective connected service strategy. PTC has a long history of enabling customers to connect assets and remotely monitor, diagnose, and resolve service issues. Customers adopting a connected service strategy helped PTC’s IoT business outpace the market growth rate of 30 to 40 percent in fiscal year 2017.

Companies like Elekta, Diebold, Sysmex, and McKinley Elevator are improving first-time fix rates 30 percent more than industry averages; mean time to repair by 6X; and equipment uptime by 20 percent, by being able to remotely monitor and service connected assets. The ThingWorx Asset Advisor app enables customers to accelerate the time to value by providing them with an even easier and faster path to connected service capabilities.

“The capabilities enabled through ThingWorx technology will help us deliver the machine uptime required by our customers in production environments,” said Antonio Lopez, vice president, global customer services, 3D Systems.

Heather Ashton, research manager, Service Innovation and Connected Product Strategies, IDC, said:

“Connected Service is a key use case for digital transformation by asset owners and operators. In fact, IDC believes that by 2020, 50% of global OEMs with connected service offerings will have incorporated augmented service execution and/or remote management, thus improving service margins by up to 30%. Using an IoT platform to enable this capability is a critical ingredient to success.”

The post PTC to Accelerate Customers’ Connected Service Strategy with Launch of ThingWorx Asset Advisor appeared first on IoT Business News.

IoT Business News