If you wrote the draft e-mail below, would you be bold enough to hit “Send”?
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To: CEO
From: A low-level employee
Subject: Why are we under-performing?
Date: August 1, 20XX
Dear CEO:
I realize that as an employee several layers down in our organization, I risk a career-limiting move by e-mailing you. But I will take the risk to share with you my concerns about our organization’s poor performance.
I am not alone but feel disconnected
During hallway and cafeteria conversations with co-workers at my level, I detect low morale and a collective feeling of malaise. Employees are asking, “Where are we going? Why are we poorly performing?”
Initially, some managers answered by pointing their finger at you as whom to blame. They say, “Weak leadership. No vision. Not a motivator.”
With time passing, more of us lower down in the organization’s hierarchy have begun to counter their complaints and defend you. Yes, you are a tad guilty of not communicating your executive team’s strategy to us in a way that we can understand. But that’s like a minor traffic ticket the big scheme. We believe you can correct things. Here is how:
You could develop a strategy map, involve and empower us to select initiatives that achieve the map’s strategic objectives and allow us to select the key performance indicators (KPIs) that we will be held accountable to (and which will align our behavior with your strategy). You set the target metrics (but make them at an achievable level). We believe you are formulating a good strategy. Our frustration is we’re not executing it well – in large part because we do not understand it.
Help us understand how we make money
We’re not fools. In the end, we understand it is always ultimately about money. But most of us are clueless about where and by how much we make or lose profits. We have no visibility to what things cost – or why. And when we ask our managers, they dismiss our management accounting system as distorted and untrustworthy – a bunch of lies – with flawed and misleading (and some claim unfair) cost allocations. Worse yet, some managers suggest our products and services have become commodity-like with our competitors’ similar offerings. Hence, there is little competitive edge from them. They say the opportunity for us to gain an advantage is by managing our non-product channel and customer-facing costs-to-serve. They say we should be uniquely tailoring our offers, deals, special services, discounts and prices to individual customers based on their unique preferences.
But here is the problem: We have no information to help us do that. Our accounting department does not measure or report customer profitability information.
However, you can also fix this. It is another minor traffic ticket. Our costing practices and system can be reformed to use activity-based costing principles. And its scope of costs can be expanded to include channel, selling, marketing and customer support expenses incurred below the gross profit margin. With that information in addition to onion layer-like visibility of profit margin contribution by each customer, you could devise incentive compensation schemes for our sales force by blending sales volume and targeted profits for each customer. It is no longer about growing sales but rather growing profitable sales. The sales force could even tailor prices at the time of placing the order. This will aid in customer account planning.
Do we know? Or do we think we know?
I let you off the hook from the minor traffic tickets above. But the employees who have complained to me do accuse you of one injustice that is more serious. You have not fostered a culture of metrics and analytics. Our competency in performing analysis is dreadful. Worse yet, the quality and location of our source transactional data are a mess. Complicating matters, even if you cleaned up and organized our data (for which there are technical solutions) and trained us on analytics, we have an IT problem. We still will not have easy and flexible access to the data to manipulate it for investigation, discovery and insights. There is a wall between IT and us. They like standards and to own the data. But analysis cannot be standardized.
The good news is we down here are confident you can also fix these deficiencies in our organization. We have learned to tolerate and cope. We will not succumb because we believe you are up to the task.
There is no “I” in team
I do hope I have not jeopardized my career by writing you. My co-workers do believe in you. We understand leadership in a knowledge-based organization is trickier than years ago when a strong-arm command-and-control drill sergeant style of management worked. Today, you need good followers. We can be persuaded.
I am just a lowly single voice deep in the bowels of our organization. But I have hopefully planted a few seeds and tips for you. They are easy to do. Simply give us a chance, and I believe our organization will shift from under to over performing.
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OK. The e-mail is drafted. Would you hit “Send” or “Cancel”?
By Gary Cokins, from: http://businessfinancemag.com/blog/e-mail-ceo-about-poor-performance
Gary Cokins is an internationally recognized expert, speaker, and author in advanced cost management and performance improvement systems. He is the founder of Analytics-Based Performance Management LLC at www.garycokins.com in Cary, North Carolina. His career: First ten years as an executive with a division executive with FMC Corporation; next fifteen years in consulting with Deloitte, KPMG, and EDS; and last fifteen years as a Principal Consultant with SAS, a leading provider of business intelligence and analytics software. See Gary’s articles on EPM Channel here.