Aligning Corporate Culture and Systems for Peak Performance: How CEO use the SPHERE Diagnostic Scorecard to establish a corporate culture that delivers results

Aligning Culture and Systems for Peak Performance How CEOs use the SPHERE Diagnostic Scorecard to establish a corporate culture that delivers results S P H E R E Advisors AG | Untermüli 7, Postfach 4440 l CH-6304 Zug (ZG), Switzerland l T: +41 41 758 08 17 F: +41 44 683 15 96 l contact@sphereadvisors.com

It is a new era – and time to fundamentally rethink traditional control! • Today, employees make thousands of decisions Results every day. Culture • For this, an enabling culture is needed. Systems • Higher dynamics, complexity, uncertainties, and ambiguities are the norm. This demands a new set of managerial systems © COPYRIGHT 2002-2009 l S P H E R E Advisors AG | www.sphereadvisors.com and www.spherediagnostics.com 2

Aligning Systems with Culture to deliver Results! Results • Good decisions drive performance • An enabling culture is needed • Managerial systems need to be designed to enable good decision making Decisions Culture Systems Systems that do not fit the organization create bureaucracy, hamper performance, limit growth and make leaders ineffective! As such, leaders focus on the wrong things, spend time on unimportant issues and waste their energy. © COPYRIGHT 2002-2009 l S P H E R E Advisors AG | www.sphereadvisors.com and www.spherediagnostics.com 6

The SPHERE Diagnostic Scorecard helps leaders understand how culture and systems drive performance For more detail: Understanding decision- making in Organizations to Focus Its Practices Where It Matters Von Lukas Michel In Measuring Business Excellence, Vol. 11, 2007 © COPYRIGHT 2002-2009 l S P H E R E Advisors AG | www.sphereadvisors.com and www.spherediagnostics.com 7

Does your organization deliver peak performance? + Capabilities + Competencies Results + Brand = Promises © COPYRIGHT 2002-2009 l S P H E R E Advisors AG | www.sphereadvisors.com and www.spherediagnostics.com 8

Does your organization keep the promises that it makes to it‘s stakeholders? Promises addresses the degree to which the organization delivers on its promises to customers, shareholder, employees, and other stakeholders – the table stakes of competing in the market High-Performance Organizations + Capabilities Keep promises, fulfill expectations, + Competencies communicate Results transparently, protect + Brand their reputation, disclose results timely = Promises © COPYRIGHT 2002-2009 l S P H E R E Advisors AG | www.sphereadvisors.com and www.spherediagnostics.com 10

Does your brand attract the right stakeholders? Brand addresses the quality of the strategy, e.g. how well the organization attracts customers, shareholder, employees, and other stakeholders with strategy High-Performance Organizations + Capabilities Communicate a clear strategy, satisfy + Competencies stakeholder needs, Results allocate resources in + Brand line with strategy, develop their organization = Promises © COPYRIGHT 2002-2009 l S P H E R E Advisors AG | www.sphereadvisors.com and www.spherediagnostics.com 12

Does your organization have the core competencies that create competitive advantages? Core Competencies address the quality of focus and the ability to establish competitive advantage High-Performance Organizations + Capabilities Build competitive advantage, invest in + Competencies capabilities, focus Results employees, change + Brand fast = Promises © COPYRIGHT 2002-2009 l S P H E R E Advisors AG | www.sphereadvisors.com and www.spherediagnostics.com 13

Does your organization have the social capabilities to sustain competitive advantages over time Capabilities address the readiness of the social capabilities that embed these advantages as sustainable value High-Performance Organizations + Capabilities Develop and maintain the right talent, + Competencies understand risks, Results establish good + Brand governance, keep high standards = Promises © COPYRIGHT 2002-2009 l S P H E R E Advisors AG | www.sphereadvisors.com and www.spherediagnostics.com 14

Does your culture enable peak performance? + Capabilities + Competencies Results + Brand = Promises Culture = Awareness + Intent + Agenda + Aspirations + Norms © COPYRIGHT 2002-2009 l S P H E R E Advisors AG | www.sphereadvisors.com and www.spherediagnostics.com 15

Does information create a shared understanding Awareness addresses the degree to which organizations use information and feedback to create a shared understanding of the context in which employees make decisions High-Performance + Capabilities Organizations Understand + Competencies stakeholders, enable Results timely feedback, learn with information and + Brand share = Promises Culture = Awareness + Intent + Agenda + Aspirations + Norms © COPYRIGHT 2002-2009 l S P H E R E Advisors AG | www.sphereadvisors.com and www.spherediagnostics.com 16

Does your team share the same intent? Intent addresses the degree to which management teams and employees have a shared intent and mind-set about the future High-Performance + Capabilities Organizations Create the context, turn + Competencies ideas into reality, Results establish an identity, align the organization + Brand = Promises Culture = Awareness + Intent + Agenda + Aspirations + Norms © COPYRIGHT 2002-2009 l S P H E R E Advisors AG | www.sphereadvisors.com and www.spherediagnostics.com 17

Does your team implement the same agenda? Agenda addresses the degree to which management teams and employees share the same corporate agenda High-Performance + Capabilities Organizations Have plans and metrics + Competencies in place, coordinate Results actions and implement strategy, review + Brand performance regularly = Promises Culture = Awareness + Intent + Agenda + Aspirations + Norms © COPYRIGHT 2002-2009 l S P H E R E Advisors AG | www.sphereadvisors.com and www.spherediagnostics.com 18

Act in line with the same principles? Aspirations address the degree to which management teams and employees share the beliefs that help them make decisions in line with strategy and values High-Performance + Capabilities Organizations Commit to goals, align + Competencies decisions, act in line Results with values, honor performance + Brand = Promises Culture = Awareness + Intent + Agenda + Aspirations + Norms © COPYRIGHT 2002-2009 l S P H E R E Advisors AG | www.sphereadvisors.com and www.spherediagnostics.com 19

Decide and act in line with the same standards? Norms address the degree to which leaders and employees share the same norms that govern what employees do and what they do not do High-Performance + Capabilities Organizations Understand risks, work + Competencies the system, act in line Results with norms + Brand = Promises Culture = Awareness + Intent + Agenda + Aspirations + Norms © COPYRIGHT 2002-2009 l S P H E R E Advisors AG | www.sphereadvisors.com and www.spherediagnostics.com 20

Do your systems enable a culture that delivers peak performance? + Capabilities + Competencies Results + Brand = Promises Culture = Awareness + Intent + Agenda + Aspirations + Norms Systems = Diagnostics + Direction + Action + Beliefs + Boundaries © COPYRIGHT 2002-2009 l S P H E R E Advisors AG | www.sphereadvisors.com and www.spherediagnostics.com 22

Does our information enable good decisions? Diagnostics address the adequacy and quality of measurement systems for sensing opportunities and trends, setting the performance standards, and monitoring performance High-Performance + Capabilities Organizations Define balanced CPV, + Competencies compare with Results benchmarks, measure + Brand performance, revise the measurement system, enable = Promises feedback, understand trends Culture = Awareness + Intent + Agenda + Aspirations + Norms Systems = Diagnostics + Direction + Action + Beliefs + Boundaries © COPYRIGHT 2002-2009 l S P H E R E Advisors AG | www.sphereadvisors.com and www.spherediagnostics.com 23

Are we able to respond to our challenges? Direction addresses the adequacy and quality of strategic management systems that focus the attention of employees, e.g. capture, review and decide on opportunities and risks, align capabilities, allocate capital, review businesses High-Performance + Capabilities Organizations Recognize + Competencies opportunities and Results trends, articulate the + Brand strategy, learn from ideas, identify key success factors, = Promises maintain a dialogue on strategy, shape the future Culture = Awareness + Intent + Agenda + Aspirations + Norms Systems = Diagnostics + Direction + Action + Beliefs + Boundaries © COPYRIGHT 2002-2009 l S P H E R E Advisors AG | www.sphereadvisors.com and www.spherediagnostics.com 25

Can we track what we are doing? Action addresses the adequacy and quality of the performance management to support the commitment of employees High-Performance + Capabilities Organizations Plan and implement + Competencies strategy, coordinate, Results align, and share, + Brand review performance regularly, set challenging goals = Promises Culture = Awareness + Intent + Agenda + Aspirations + Norms Systems = Diagnostics + Direction + Action + Beliefs + Boundaries © COPYRIGHT 2002-2009 l S P H E R E Advisors AG | www.sphereadvisors.com and www.spherediagnostics.com 26

Are we flexible and fast? Beliefs address the adequacy and quality of beliefs standards. They establish the context and provide guidance for decisions and behaviors with the vision, the values, and individual performance objectives High-Performance + Capabilities Organizations Align decisions with + Competencies the vision and values, Results clarify individual + Brand contributions, honor performance = Promises Culture = Awareness + Intent + Agenda + Aspirations + Norms Systems = Diagnostics + Direction + Action + Beliefs + Boundaries © COPYRIGHT 2002-2009 l S P H E R E Advisors AG | www.sphereadvisors.com and www.spherediagnostics.com 27

Can we balance trade-offs? Boundaries address the adequacy and quality of behavioral standards as policies and decision making rules that frame the functioning of the management system, e.g. decision making standards such as governance, incentives systems, HR policies, accounting rules, risk limits and leadership standards High-Performance + Capabilities Organizations Lead with a simple + Competencies structure, establish Results clear risk limits, set + Brand clear leadership standards and good governance rules, = Promises support employees with critical decisions Culture = Awareness + Intent + Agenda + Aspirations + Norms Systems = Diagnostics + Direction + Action + Beliefs + Boundaries © COPYRIGHT 2002-2009 l S P H E R E Advisors AG | www.sphereadvisors.com and www.spherediagnostics.com 28

Using the Scorecard with 9 Principles • High Reliability Creates Trust • Convince Stakeholders Through Clarity • Capabilities Enable a Competent Organization • Beliefs Maintain the Pace and High Agility • Norms Enable Entrepreneurship • Systems Maintain the Routines of Time • A Responsive Culture Gets Things Done • High Effectiveness Enables Peak Performance • Integrated and Aligned Leadership Enables Growth © COPYRIGHT 2002-2009 l S P H E R E Advisors AG | www.sphereadvisors.com and www.spherediagnostics.com 29

In modern organizations, diagnostics enable informed decisions where people do the work. Non-judgmental observation is the practice that helps leadership teams create a shared awareness of current reality. High Reliability Shared awareness helps leadership teams keep their promises with their stakeholders. Such organizations are Creates Trust reliable. They build and maintain trust. © COPYRIGHT 2002-2009 l S P H E R E Advisors AG | www.sphereadvisors.com and www.spherediagnostics.com 30

Direction focuses the attention of employees on the important things. A shared intent strengthens the attention and supports the alignment of strategy, structure, and culture. Clarity on the strategy convinces clients to buy, employees to join, and Convince shareholders to provide funds. Stakeholders The results are loyal clients, employees that perform, and owners that stay. A convincing organization has the Through Clarity building blocks for growth. © COPYRIGHT 2002-2009 l S P H E R E Advisors AG | www.sphereadvisors.com and www.spherediagnostics.com 31

Action establishes the things that get done. A shared agenda reinforces the attention of employees and creates a shared platform for development. Competencies include the organizational capabilities and provide Capabilities Enable the foundation for competitive advantage. a Competent The result is a competent organization that focuses, stays on track, and gets Organization things done on time. © COPYRIGHT 2002-2009 l S P H E R E Advisors AG | www.sphereadvisors.com and www.spherediagnostics.com 32

Beliefs calibrate how things get done in organizations. Shared aspirations help leadership teams maintain a high attention density over time. Social capabilities are the hidden sources of competitive advantage. They Beliefs Maintain represent many of the intangibles that account for a large portion of the value the Pace and High in organizations. Agility © COPYRIGHT 2002-2009 l S P H E R E Advisors AG | www.sphereadvisors.com and www.spherediagnostics.com 33

Boundaries set the frame for what is inside and outside the limits of what the organization does. Shared norms give employees the confidence that allows them to take acceptable risks. Social capabilities are the hidden Norms Enable sources of competitive advantage. They ensure that the same rules apply Entrepreneurship to all members of the organization. An engaged organization protects its boundaries while employees are committed to search for new business opportunities. © COPYRIGHT 2002-2009 l S P H E R E Advisors AG | www.sphereadvisors.com and www.spherediagnostics.com 34

Diagnostics enable non-judgmental observations and informed decisions. Direction focuses the attention of employees on important things. Action includes the tools for strategy implementation. Beliefs and boundaries establish the conditions that release the productive energy in the organization and help employees use their potential. Systems Maintain Well-designed management systems the Routines of are the drivers of corporate culture. With formal routines of time, Time employees concentrate on substance and reduce bureaucracy. The results are higher managerial efficiencies and more time for important things. © COPYRIGHT 2002-2009 l S P H E R E Advisors AG | www.sphereadvisors.com and www.spherediagnostics.com 35

Successful leadership teams invest in a shared understanding, a shared agenda, and the same standards for their decisions, behaviors and actions. Leadership teams establish a culture that enables the entire organization to respond to challenges. A Responsive Leaders need to organize the attention of their employees. At scale of larger Culture Gets organizations, leaders manage their team with a process that focuses members and employees throughout Things Done the organization. With a corporate cycle and agenda, they focus on the essential yet non-urgent issues. © COPYRIGHT 2002-2009 l S P H E R E Advisors AG | www.sphereadvisors.com and www.spherediagnostics.com 36

A responsive culture and efficient systems are prerequisites for high effectiveness. These are the characteristics of an organization that delivers on its promises, attracts stakeholders with a compelling strategy, and maintains sustainable competitive advantage. High Effectiveness Enables Peak Performance in Leadership © COPYRIGHT 2002-2009 l S P H E R E Advisors AG | www.sphereadvisors.com and www.spherediagnostics.com 37

The greater the challenges are an organization, a team or a leader accepts, the more important it is to have minimum interference occurring from within! Interferences are all those things that keep the organization from reaching its true potential. In particular, with less interference occurring from within the Integrated and organization, employees search for new market growth opportunities and take decisions that develop and grow the Aligned Leadership business. Enables Growth Growth is the result of employees that take risks and capture opportunities as they arise. At the same time, the strategy, values and boundaries ensure that employees maintain their focus on the given priorities. © COPYRIGHT 2002-2009 l S P H E R E Advisors AG | www.sphereadvisors.com and www.spherediagnostics.com 38

Aligning Systems with Culture to deliver Results! The SPHERE Corporate Diagnostic measures the performance on systems, Results culture and results Decisions Culture Systems © COPYRIGHT 2002-2009 l S P H E R E Advisors AG | www.sphereadvisors.com and www.spherediagnostics.com 39

SPHERE Advice on Corporate Systems Unique experience and expertise in dealing with sensitive, critical and potentially risky projects 5 Systems 5 Diagnostics 5 Design Options 5 Steps Analysis Direction 2 Definition 3 1 Diagnosis Boundaries Diagnostics Beliefs Design 4 Implementation 5 Action Results Leadership Cycle Leadership Models Tool Box Scorecard © COPYRIGHT 2002-2009 l S P H E R E Advisors AG | www.sphereadvisors.com and www.spherediagnostics.com 40

Publications: Tools for Effective Leadership All our articles can be downloaded from our website: www.spherediagnostics.com © COPYRIGHT 2002-2009 l S P H E R E Advisors AG | www.sphereadvisors.com and www.spherediagnostics.com 41

Join us on our web 2 platforms: SPHERE Advisors: Coaching www.sphereadvisors.com and advice for CEO and the Management Team SPHERE Diagnostics: www.spherediagnostics.com Services for Staff Leaders and Publications, resources, forum, blog Control Professionals Presentations for download, free Diagnostic trial Group: Peak Performance in Corporate Leadership http://www.linkedin.com/groups?gid=1884954 Copyright © 2002 – 2009 S P H– 2009 Advisors R E |Advisors AG | All rights reserved | www.sphereadvisors.com and www.spherediagnostics.com Copyright © 2002 E R E S P H E AG All rights reserved | www.sphereadvisors.com and www.spherediagnostics.com 42

Peak Performance at the Top We support CEOs and Senior Executive deliver peak performance in corporate leadership Advice: CEO Coaching, Senior Executive Workshops Diagnostics: Corporate and individual effectiveness Communications: Stakeholder, content and impact management Infrastructure: Board relations, management systems, CEO Office Our client list reads like the „Who‘s Who“ of the leadership of firms, non-profit organizations in Europe, the U.S. and the Middle East. Trust is the foundation of our business. This is why you do not find names here. Contact us for peak performance S P H E R E Advisors AG Tel: +41 41 758 08 17 Untermüli 7, 4440 Postfach Fax: +41 44 683 15 96 CH-6340 Zug (ZG) contact@sphereadvisors.com Switzerland www.sphereadvisors.com Copyright © 2002 – 2009 S P H E R E Advisors AG | All rights reserved | www.sphereadvisors.com and www.spherediagnostics.com

Aligning Corporate Culture and Systems for Peak Performance: How CEO use the SPHERE Diagnostic Scorecard to establish a corporate culture that delivers results

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