Article -> Linking Strategy with People to Increase Productivity
Date Added: September 2006
There are a handful of extremely successful organizations that generate huge annual earnings – year after year. Research suggests such extraordinary profits reflect the ability of these companies to make their top performers more productive.¹
These organizations measure employee productivity and incorporate this data into their overall organizational strategy. However, this is no easy task as the larger the organization, the more complex the corporate strategy becomes. These firms are creating new business models and value propositions to ensure a proper alignment between people and strategy. They are adapting the process of formulating strategy, by combining their tangible and intangible assets in unique ways to reveal new businesses and value propositions.²
The implementation process of adapting new business strategies is immensely important. Equally important is the communication that accompanies the change. If organizations are now recognizing employees as scarce and valuable resources – those capable of enhancing profitability and productivity - it is necessary to overcome communication barriers that can hinder people’s production. Ensuring that people are engaged in the corporate vision/objective and strategy creates a link between the two that ultimately proves successful in generating profitability and increasing productivity.
Promoting effective communication throughout an organization can be an arduous task if handled irresponsibly. Successful organizations implement standard processes into their business to limit unnecessary complications. Clearly communicating expectations to all people, regardless of status, is an effective way to eliminate confusion. Organizations that establish consistent leadership practices, define job roles, and regularly identify processes that need improvement will find that well-informed people are able to perform more efficiently and effectively.
By creating a performance management system, organizations have the ability to electronically link employees’ objectives with those of their department or division, all the way to the corporate level and goals. The result is a performance management system where employees know how they impact the bottom line and have a clear “line of sight” between their individual objectives to the corporate objectives. Experience indicates that performance management leads to increased business results, providing linkage between people and strategy.
The strategies employed can be successful to organizations both large and small. Measuring employee productivity, no matter how large or small the workforce, creates a standard to gauge the success your current business model. Engaging employees by linking their productivity directly to your bottom line is an effective strategy that, when done correctly, will prove to be successful for organizations of any size.
¹ “Creating Value From Employees.” The McKinsey Quarterly. May 2006 Member Edition.
² Bryan, Lowell L. and Michele Zanini. “Strategy in an Era of Global Giants.” The McKinsey Quarterly. May 2006 Member Edition.