In his book, On War, the Prussian General Clausewitz sought to explain the inherent issues in managing large scale engagements. He introduced two key concepts which are applicable to any organization looking to maximize performance. The first concept is internal friction which describes the gap observed between planned actions and actual actions. The second concept is external friction which describes the gap between desired outcomes and actual outcomes. Any CEO will recognize these gaps as part of their daily battle. Clausewitz is often quoted as saying no plan survives first contact with the enemy and it is because of these frictions.
The answer to overcoming friction is not better or more detailed plans. No human planning can anticipate every internal and external source of friction. The answer lies in two specific types of communication. The first type requires communicating the strategy and goals from the top to the bottom of the organization in order to create alignment. Proper alignment allows all employees to understand the priorities of the CEO and to make decisions that are consistent with the decisions the CEO would make in their position. The second type of communication is feedback from the employees about their current likelihood in accomplishing their goals. As challenges arise they communicate back to the top allowing for improvements in alignment and assistance in meeting the objectives. Instead of trying to execute a detailed plan that prepares for every contingency the strategy is by nature dynamic and adaptive.
Stephen von Bungay is his enlightening book, the Art of Action, refines this concept and names it directed opportunism. With directed opportunism the top level of an organization creates and communicates a set of clear intents or goals for the company. These goals express measurable outcomes that are the top priorities of the organization. For example, generate $50 million in revenue in the quarter. This is a statement of intent not a detailed plan as to how to generate the revenue. The translation into specific actions takes place at each level below in the organization. It is up to the people at each level working in consult with the higher level to determine what actions they should take. This might look like selling $25 million of product X at the next level and then further refine to selling $10 million in the western region all the way down to an individual salesperson having a goal of hosting 10 qualified meetings with customers in the quarter. As the goals move down the organization they become more specific until at the bottom level they become actions that an individual can take to move the organization forward. Notice that the goal of the individual salesperson was not to tell $1 million of product but to take whatever specific actions they thought appropriate to generate the revenue. Once this process is complete the organization has alignment between the goals of the organization and the actions of individuals within the group.
Once alignment is achieved it is then critical for the second type of communication. Feedback is delivered on a weekly basis from every person in the organization. That feedback takes the form of answering two questions on a scale of 1 to 5 about every goal they have. The first question is “what is the likelihood that you will complete your goal on time?” This is not the same as asking for the status of a goal completion. Status communicates the current state but may not reflect the likelihood of completion. Likelihood requires everyone to make a prediction and gives the CEO the best information available about the future. The second question is “how do you feel about the quality of the work you have done so far towards the goal?” This question allows employees to signal to the executive team that a project is not going as well as they would like independent of completion. Quality is not an absolute concept and it will be different for each group and even among people in each group. It is not meant to be a measurement but a way to ask for assistance while still making progress toward the goal.
By allowing each level of the organization to refine and adjust their actions you are more likely to reach your intent whenever the inevitable internal or external friction is encountered. Additionally the freedom given at each level allows employees to feel autonomous while still working as part of a team. Autonomy is a major motivation for employees as is being part of a team. Achieving both at the same time is a key requirement for maximizing performance.