The Concept of Organizational Clarity
Introduction
Over the past 17+ years, the Tablero Group, in cooperation with the Wharton School of Business at the University of Pennsylvania, has developed, refined, and implemented the Concept of “Organizational Clarity,” intended to develop scalable and capable service business models that have sector and societal transformational impact. Below, we have outlined the “Organizational Clarity Concept” in executive summary format.
Components of Organizational Clarity
Organizational Clarity has 4 components that must work conterminously and are mutually dependent upon each other for transformational, sector leadership while creating exponential shareholder wealth.
Strategic Clarity
Operational Clarity
Tactical Clarity
Financial Clarity
The Outcomes of Organizational Clarity include:
Organizational Clarity, owing to its holistic approach to business model development, creates an impressive list of potential outcomes.
A Sector-Impact Organization Resulting from a Transformational Business Model
Exponential Institutional Shareholder and Individual Wealth Creation
Significant Economic and Societal Success and Outcomes
Legislative Influence at the Sector Level
Consolidates Large, Fragmented, and Addressable Market Opportunities
Strategic Clarity
Strategic Clarity includes:
A clear, concise Mission Statement that describes the company’s mission, and for whom it provides value
A differentiated Value Proposition
A stated and adhered to Core Set of Values and Principals
A well-defined Strategy inclusive of Corporate Development and Structured Governance Functions
A defined set of Goals, generally <5 in number
A pragmatic set of Objectives, generally <6 in number
A well-defined, scalable, technology-enabled and differentiated Business Process and Model, that differentiates the company from mediocre sector participants
A highly skilled Leadership Team that utilizes “Outside Expertise” and that is empowered within the organization
Strategic Clarity Outcomes include:
A branded and differentiated Organization that is known and accepted as a significant sector-impact Influencer
An “easy buy” Decision for the Customers and Clients: attracts Customers, Channel Distribution Partners, Technology Partners, and engages Sector Leadership
A noted Place to work, which attracts and retains the best Employees, the most talented Sector Executives and Advisors
Significant Wealth Creation
A stated and adhered to “Yellow Brick Road” to achieve the stated Organizational Objectives
Leadership that is focused on the Success of the Customers, the Employees, and all Stakeholders: Illustrates Stakeholder Balance
Leaders who have “surrendered the sovereignty,” and have empowered proven professionals and outsiders with control
Operational Clarity
Operational Clarity includes:
Brand Awareness: A precise understanding of the Target Market(s): sector dynamics, opportunities, competition, shareholder value “drivers,” leadership capabilities, thought and knowledge leaders, and that has expert knowledge in the governance process and expert knowledgeable advisors.
Ability to choose, profile, and identify the “Targeted Customer” at the product or services level.
The ability to manage and influence the “Customer Maturation Lifecycle”
Marketing Assets and capabilities that include at a minimum:
Brand Equity & Brand Awareness Programs
Effective Market Messaging
Technology-Driven Marketing Assets
A Lead Generation Process that provides 10x the Amount of Revenue needed to meet the Growth Objectives of the Company
Professional Marketing Expertise (either outsourced or internal staff)
Process & Technology centric Client Relationship Management and Client Account Management
“Best of Breed” Service Delivery or Product Quality/Performance function that is the organization’s most noted “Brand Equity”.
Is Process-Centric; not people-centric
Enhanced by the Application of Technology
Enables “B” level skills to perform at “A” levels
Has a well-defined and proven scalable business process and leadership execution of a “Portfolio-Driven” Go-To-Market Franchise Effect, which includes:
Direct Sales: Talented, Proven, Results-Oriented
Inside Sales and Business Development Activities
Channel & Alternative Distribution that provides a portfolio of distribution partners
Strategic Partnerships and/or Joint Ventures: minimum of two highly productive partnerships are required to be transformational
Has Defined and Implemented a Structured Management & Communications Process & Rhythms. Leadership that is Management Science-centric, that enables Leaders to be “effective” through management science and process, not position power or narcissistic control behavior.
8-10 high defined and monitored Measurements and Metrics at an organizational level, which measure the business model, not the business
5-7 Key Operational Measurements and Metrics within each Function
The Definition of Success, Mediocrity, and Failure: each of these is highly defined and understood, not subject to management opinion or “how management feels”
Customer and Employee Satisfaction are priorities of Leadership, not the leader’s feelings or careers or narcissistic needs.
Processes and Programs are in place to effectively measure and manage change and outcomes
Has formal “Cultural Development” programs and processes to develop informal leaders and the culture as part of Leadership Effectiveness.
Operational Clarity Outcomes include:
Organic Revenue Growth of >20% Year-over-Year becomes a “built-in” capability of the business
Significant New Clients result from referrals, not just direct sales, channel or partnerships
Significant Client Retention & Recurring Revenue capability is part of the core competency of the company
Employee recruiting is dominated by employee referrals, not “outbound” overt recruiting activities
Effective Internal ”Informal” Leadership Programs
Tactical Clarity
Tactical Clarity includes:
Sales Plan by Geography, Product, Lead Source, Sales Source or Service
Cost of New Customer Acquisition is Sector “Best of Breed”
Structured Potential Client Maturation Processes (Proposals, SOW, RFP's, Competitive Intelligence, etc.)
Customer Retention and Customer Lifecycle Plan, including Product Maturation
Client Internal Management Documentation & Measurement and Metrics
Client External Documentation Programs, very effective client review processes (QBR)
Customer and Employees are “Tied” with technology/IT and analytics, to the company
Measurement and Metrics are prevalent at the department, function, team and individual levels
Individual Contributors’ compensation is dependent upon their success, the team and the company
Compensation reward is realized close in time to the activity completed
The “Employee Lifecycle” is managed and measured
Turnover that is excessive in the supervisory and executive levels is an indictment of executive management
Structured and Measured Workforce Management Programs are a priority of supervisory and executive leadership
Training curriculums
Certification programs
Process and Improvement Committees are a formal function and part of the culture of the organization
Technology Enablement Plans and Roadmaps to create customer dependency and scalability of business processes are always in the Top 5 Business priorities and investments
Tactical Clarity Outcomes include:
A “Franchise Effect” is developed. A definable and a predictable company is prevalent. The Business Process and Perform Culture is more important than any single contributor
If an “event” or “activity” of transactional nature occurs, it is treated as a process failure, and/or a leadership failure
Process and technology become people enablers, and therefore an investment
A “perform & knowledge based culture” is established and rewarded versus a “serve executive management mentality”. There are no “nannies” in the services business world!
High employee retention and lower recruiting costs are reflected in financial performance through operating leverage and increases in productivity, that are “best in sector class”
The Business Process becomes more important than any one person, investment, or any one executive
Financial Clarity
Financial Clarity includes:
A 3- to 4-year Financial Plan/Wealth Creation Plan that reflects the market/sector opportunity, the measurement and metric capability and performance of the company. This is not just a mathematical exercise: i.e. 20% YOY growth
The Measurement and Metric System should be the “forecasting tool” for financial performance
Financial Reporting and Forecasting Systems that are highly automated, accurate, timely, and enable the business to accurately budget and forecast itself
Current and subsequent year detailed annual Budgets are based on the company's key measure and metric performance, not math!
Budget Performance to Actual Performance reviews: Quarterly at a minimum: Governance commands adherence and when performance gaps occur, assertive executive/governance action is taken
Measurement and Metric detailed analysis and review at the function level is prevalent: Quarterly at a minimum. Deficiency action plans and corrective actions plans to be monitored and reported on by management.
Formalized and Adhered to Accounting Policies and Procedures
Accruals are part of an automated systems process
Expense Reporting
Billing
Accounts Receivables
Accounts Payable
Payment Authorizations
Spending Commitments
Disbursement Controls
Business Controls
CAPEX Approval Process
Financial Executive has an “external” confidant who serves as a resource: i.e. a BOD member, Executive Chairman, Audit Firm, or trusted advisor
Internal and External Risk Management reviews annually
External Accounting and Financial Review or Audit Annually
Financial Clarity Outcomes include:
The amount of Wealth that can be created by the “franchise” is identified
Definable, predictable and repeatable financial outcomes are known. If management cannot provide this, new executive management/leadership should be pursued
Pragmatic relationships with all stakeholders are established, not based on “Biased Feelings”
Execution and Investment Risk are understood and minimized
Exit Optionality Alternatives are ongoing, known, and evaluated by governance or outsiders