Catchball Process 1/2 – Focus and Alignment Between Business Units and the Overall Strategy

Most companies comprise of a series of moving parts, with each team representing a different part or aspect of the company. One of the most common challenges we see here at Digital Pathways is aligning the team so that everyone is working towards a common goal, and everyone knows what they are working towards and how their role plays a part in the larger goal. Below is a conversation between co-founders, Laurent Simon and Pascal Dennis, on how to align business units with the overall strategy – a process we refer to as Catchball.

Laurent:

Hi, Pascal. How are you today?

Pascal:

I’m really well. How are you Laurent?

Laurent:

Very well, thanks. So today the question I have for you is, how does our Business Unit align with our overall strategy? How do we make sure senior leaders and the rest of the team are on the same page?

Pascal:

Great question. The most obvious expression of alignment is through narrative. Strategy, at its most basic level, is story-telling. And so, our organization will have an Aspiration and a Winning Logic. And so will our Business Unit.  Do the stories align?  Does our story support the aspiration and winning logic of our organization? If so, we’ve made a good start.

Laurent:

What else is important when it comes to alignment?

Pascal:

We also have to align our Business Unit’s activities and metrics, with those of the organization. We do this through the so-called Catchball process. Catchball entails a back and forth dialogue, wherein the senior leader(s) and subordinate team members validate the big questions.  What is the critical gap that we need to close?  Can we break the gap down to its key parts?  The output typically comprises Pareto diagrams of blockers and/or root causes. Through this back and forth dialogue, we achieve a shared understanding of the job to be done, and of the winning logic through which we will achieve it.

Laurent:

Very good. In your experience, what are the key enablers of alignment?

Pascal:

Good data and information flow up and down the tiered management system is essential. We discuss the latter in a number of blogs. The Tiered Management System acts as our nervous system alerting us to abnormalities, so we can fix them. It’s also provides the data upon which our organization depends. That and our so-called operating rhythms or management routines. (Note: we’re preparing a number of blogs describing the latter.)

Here’s a simple example: Every morning, our team has a standup meeting wherein we review the key operational and strategic questions. What’s our goal today, this week, and this strategic cycle?  How did we do yesterday, last week and so far in this cycle?  What are our biggest problems? What are the root causes and what are we doing about them?  And so on.  Our team members are the source of such data, and they gather it in the course of their work.  Rolling up the data for the next level up is a straightforward activity.

A secondary source, as I said, is management’s operating rhythms. For example, suppose I’m leading a number of teams focused on, say, five core customer journeys. My personal routine will include attending daily stand-up meetings on some frequency and recording patterns, common trends and themes.  For example, “Hmm, customers are having trouble with this or that element of our latest software.  Our developers keep dropping key features just before launch without engaging the Designers. Customer experience is suffering across the board. Especially troubling is a sharp drop in Referral rates…”

Pascal:

And so, we bring data to our stand-up meetings, whether we’re a frontline team or senior executives. And that data is the lifeblood of our management system – and organization.

One last point about data. You, your team members and customers are the most important source of data. You’ll use secondary sources, of course, but please do not depend on them exclusively, especially for critical information.  In Healthcare, for example, we cannot afford to wait four weeks for on our corporate EMS report on Patient Safety. We need to know about infections, falls, or mis-medications in real time. Maybe that means a daily check-in with the microbiology lab.  “Any infections in any of the sample we submitted yesterday?”

Similarly, in Financial Services, we need to set up simple processes that quickly highlight, say, important customer service or Regulatory abnormalities.

Laurent:

You seem to describe the image whereby everybody holds a piece of the jigsaw and every leader collects the data from the area of their team, brings that piece of the jigsaw to a public forum, and then everybody can see the entire situation at a glance. Is that right?

Pascal:

Exactly right. ‘Jigsaw puzzle’ is a good metaphor in a number of ways.  It reflects the collaborative nature of the tiered management system, and Strategy Deployment in general

Laurent:

Is that what you mean by the term Lighthouse? A visual representation of all business aspects relevant to a team, and showing it to others in a regular forum?

Pascal:

Exactly right.

Laurent:

Could you describe another means by which people can gather the data?

Pascal:

When it comes to Catchball and Root Cause Problem solving, you have to validate blockers and root causes by going to see for yourself. It’s good to have a report, spreadsheet and dashboard. But you have validate your understanding by, say, going to the Design studio where we’re having this or that issue, or to the Supplier shop where they’re having that hassle. Even better, go to the customer and hear about their experience directly. You validate with your eyes and psyche.  I often assign senior teams the task of talking directly with a representative number of core customers.  Not all of them do it, of course.  [Laughter] But those that do have a much deeper appreciation of their business challenges and necessary strategies.

Laurent:

To build on your point, I’ve found the same using the so-called Customer Arena, wherein you bring senior leader and customer together, and they feed you back their experience, how they feel about doing business with you.

Pascal:

That’s excellent.

Laurent:

So the last question I have for you is, how do we understand whether we are on track? How can we know if we are achieving our strategy goal?

Pascal:

I’ll speak as a chemical engineer. I hope that’s okay with everyone. I think in terms of so-called end-of-the-pipe measures, also known as, lagging indicators, and so-called ‘process’ metrics, also known as ‘leading’ indicators. The former tells us, are we winning or losing the game? And process metrics tell us, how well are we executing our strategy? Any abnormalities that suggest we have major failure ahead, for example, execution issues, or even worse, major failures in our logic? Process metrics provide the invaluable early warning.  We need both end-of-pipe and process indicators. If they’re both in a good condition, we’re probably doing okay.

Pascal:

Clear end-of-pipe and process measures also provide deeper insights.  For example, end-of-pipe and process metrics can be OK or Not/Ok, creating a 2 x 2 matrix of possibilities. For example, sometimes the end-of-pipe results are good, but the process indicators are not good.

That’s a serious warning sign. Have we gotten lucky?  Are the ‘gods smiling on us’?  Maybe the market is just really great right now, but our winning logic is not good. Or our execution is not that good. In fact, case studies of corporate collapse teach us that things usually look pretty good right up until the end.  So there are different permutations between lagging and leading indicators that give us essential information.

Laurent:

Just to confirm and to make it clear for everyone, what you called end-of-the-pipe KPIs are the lagging indicators, and the way people work, and the way the demand has been processed are the leading indicators?

Pascal:

Correct.

Laurent:

How do you typically help an organization to distinguish in a practical way, the leading indicator from the lagging indicator? Because everybody wants the output. Nobody really cares about how the job gets done. Could you please explain?

Pascal:

Here’s an example. Earlier I talked about Aspiration and Winning Logic. The Aspiration, is an example of a lagging indicator. It make takes us years to achieve it.  From our Winning Logic we can derive our leading indicators.  These tell us, for example, are we implementing our plan well? Are customers happy and telling their friends about our offerings? Are suppliers and team members happy, engaged and performing as expected? Are new offerings gaining traction? Such signals suggest we’re on track to achieving our Aspiration.

Our favorite sports also provide excellent examples of leading and lagging indicators.  The ultimate lagging indicator, of course, is ‘did you win the game or not’?  But there are usually a rich array of leading indicators that tell you whether the team is on track.

Laurent:

Exceptional. Thank you so much. Have a good day.

Pascal:

My pleasure. And you.