This is the third in a blog series that breaks down the concept of KPIs to make them understandable and practical. See, Just like Mythbusters but without the explosives. I regularly present about business strategy and how to define and measure it effectively, but it turns out that everyone desperately wants to know how they are doing against their strategy, but they're rarely certain of their goals in the first place. And an employee's internalization of their company’s vision has a significant impact on their engagement and their ability to make the right decisions at the right times. Let's talk about how language can impact how you create and track your KPIs.
Plotting language on the strategy-to-KPI pyramid
In the previous post, I wrote about the strategy–to-KPI pyramid and promised to continue breaking down each dimension into further detail. There’s no better place to start than at the top – in this case with the overall strategy.
The overall strategy for an organization describes their aspirational goal as a company. It isn’t directly measured but rather sets the direction and tone of the business. This might be called a mission statement or a corporate vision statement.Soiy
Two cases of strategy language in the airline industry
I recently had a great conversation with a CEO where I was describing my crush on Southwest Airlines. The CEO is British and wasn’t familiar with it. I described it as a casual, cheap-and-cheerful airline with a single class of service, no reserved seats and simplistic pricing scheme. Based on that description, he likened it to EasyJet or Ryan Air (Americans, these are two LOW COST airlines that service Europe).
Being a frequent traveler, I quickly jumped in to clarify to that Southwest was customer-focused, rather that revenue-focused like EasyJet and Ryan Air. I conjectured that their mission statements would PROVE my theory (*thanks, Google!).
Check out Southwest Airlines' mission statement:
Check out the language being used: customer service is the first attribute they list. They use emotive words like warmth and company spirit. They might be the airline for the “every man” but they seem to recognize that while people will give up “frills” for lower fares, they won’t give up quality service. Notice that there is no mention of PRICE.
Compare this to EasyJet:
“To provide our customers with safe, good value, point-to-point air services. To effect and to offer a consistent and reliable product and fares appealing to leisure and business markets on a range of European routes. To achieve this we will develop our people and establish lasting relationships with our suppliers.”
We see a reference to price (“good value”) right away, but it’s easy to see that the language is distinctly different. This feels like it was written for a board rather than for the employees who are delivering it. Point-to-point air services? I am pretty sure I have never asked an airline if I could get point-to-point service.
So, what difference does language make?
Overall strategy (aka mission statements) are about alignment. That is, helping employees, customers and vendors really understand what your business stands for and what’s important to you. Now re-read each of those mission statements again. If you were an employee at either of those companies, which of these really provides clarity about what you should be doing?
We all want employees who are empowered and headed in the right direction. In order to achieve this, we have to give them some clear guidance and inspiration through our strategy statements.
Coming up: The next blog in this series will address focal points from the strategy-to-KPI pyramid. We'll be figuring out where a business needs to pay attention in order to accomplish their overall business strategy.