When scaling a company rapidly and growing a team it is vital that the team maintains alignment to the company mission and that you set goals which your team members can work towards.
Success depends on constant communication and alignment to goals and values. My companies have been able to achieve both with the help of a management process I developed a number of years ago called the VOS², which stands for: Vision, Values, Objectives, Obstacles, Strategy and Specific Metrics.
In this article, I’d like to share the importance of strategic alignment and why the VOS² alignment process is critical to success at my companies, along with behind-the-scenes detail on how we approach it every year.
What is Company Alignment?
Strategic alignment refers to an employees’ sense of understanding of your company’s mission, goals and culture. It goes beyond goals and is about getting everyone on the same page so they understand how they contribute and allows your people to feel empowered and to solve problems by always having the company culture and mission in mind when making decisions. Alignment helps to ensure that the company focuses efforts on the same important issues throughout the organization.
According to the Harvard Business Review, companies with highly aligned employees are more than twice as likely to be top performers. Alignment occurs when managers and employees alike tie their everyday activities to the organization’s vision. But alignment is rare—In a Harvard Business Review article, Michael Mankins and Richard Steele estimated that, on average, most strategies deliver only 63 percent of their potential financial performance. In their 2001 book, "The Strategy-Focused Organization," Robert Kaplan and David Norton reported that "a mere 7 percent of employees today fully understand their company's business strategies and what's expected of them in order to help achieve company goals.”
Global CEOs cite a lack of alignment as the number one obstacle between strategy and execution. Transparent goals can help to deliver that alignment.
To create alignment you will want to ensure your people understand your mission and culture as outlined in my video on culture and scaling and then breakdown your main company mission into smaller goals and then delegate work to teams and team members to help achieve these goals. You will also want to track the progress of these goals as outlined in my article on effective delegation using key performance indicators (KPIs) to measure success so that the tasks that your people do everyday map to your overall mission and vision.
If you don't have alignment your people might work in silos without the context of the bigger picture and become frustrated or produce work which is not as you wanted.
A two-year study by Deloitte found that the biggest impact on employee engagement comes from “clearly defined goals that are written down and shared freely.” Most effective is when those goals are linked to the team’s broader mission.
As we learned in my article on OKRs setting and measuring a select number of simple objectives and measuring specific key results helps to focus your team and track success towards your goals.
While OKRs are great for setting objectives they don't take into account the company culture or align employees to doing mission-led meaningful work.
Another popular alignment tool is Salesforce's V2MOM system. Outlined in Marc Benioff's book Behind The Cloud this alignment system incorporates Vision, Values, Methods, Obstacles and Measures and provides employees with more focus on the overall company mission and how the tasks they do help drive that forward. While this is great it's a little complicated and lacks some of the specifics of OKRs.
Now regardless of the system that you choose the biggest challenge you will face is implementing the tool into your company and effecting behaviour change in your organisation. At my company Virti where our company culture is Be Bold, be Fast and be Amazing I decided to create and trademark our own alignment tool that could be owned by the team and which combined many of the best elements of the previously mentioned systems.
The Virti Operating System²
The VOS² or The Virti Operating System² is a simple management framework unique to Virti that supports alignment across the company, teams and individuals. The VOS² enables me as CEO to clarify what I’m doing, and then communicate it clearly to the entire company keeping company mission and values as a focus while planning how key goals will be hit and the steps required to get there.
VOS² stands for: Vision, Values, Objectives, Obstacles, Strategy and Specific Metrics - 2Vs, 2Os and 2Ss. There is a company VOS² document which I set based on top-level company goals and then team and individual VOS² documents which waterfall down from the main company VOS². Each team lead and individual owns their VOS² and these are done as part of onboarding so new hires know exactly where they fit in and what they need to do.
Elements of the VOS² are then added to project management software like Asana so we can track progress and teams reflect back on progress at the end of each quarter.
Alignment Tools Focus Your People
When growing a team it is important that both you and your team are laser-focused on things that need to be done to achieve your goal and that these are successfully executed. The VOS² enables everyone to clarify what they are doing, and then communicate it clearly to the entire company. It also helps me breakdown the key steps needed to drive revenue, growth and achieve our mission. More than OKRs the system allows for a reflective and thoughtful process that considers potential obstacles early and allows your people to act autonomously towards company goals by aligning to culture. Would you rather have your people mindlessly try to hit goals they don't understand the relevance of or would you rather they solved problems themselves to drive the company forward without micro-management?
The rulebook tells people what they can or can’t do, but the culture of the organization can tell people what they should do. Or, as business philosopher Dov Seidman puts it:
“What we choose to measure is a window into our values, and into what we value.”
VOS² boils down to answering six questions. Together these answers create a framework for alignment and leadership:
- Vision— what do you want to achieve?
- Values — what’s important to you about this goal?
- Objectives - what will you deliver?
- Obstacles — what are the risks that might prevent you from being successful?
- Strategy — how will you achieve your objectives?
- Specific Metrics — how will you measure your objectives?
The six parts of the VOS² give us a detailed map of where we are going and an understanding of how to get there.
Defines what you want to do or achieve.
Principles and beliefs that help you pursue the vision.
The outputs you are responsible for delivering
The challenges you have to overcome to achieve the vision.
Actions needed to get the job done.
Measurable results you aim to achieve.
So you can see how these all flow back to the main company mission and vision and help people to appreciate how their work is impacting the company and customers providing clear and obvious meaning to every person's work.
Transparency and Regular Updates
Each VOS² is a living document which can be updated throughout the year. The problem with setting static goals is that the outcomes tend to lag behind and people can sometimes forget why they are doing something, neglecting the overall company mission.
As well as a company VOS² both individuals and teams across the company have their own VOS². Every single team and every single employee drafts their own VOS² and regularly reflects on it and reviews. To foster transparency, we publish every VOS² to the entire team. Anyone can look up anyone else's VOS² to see how each of us plans to contribute to our company’s growth.
This is because research shows that public goals are more likely to be attained than ones that are held private. In a survey of 1,000 workers in the U.S., 92% said they would be more motivated to reach their goals if colleagues could see their progress.
Our people have autonomy and take ownership of their VOS² so that they can intelligently focus on where they can bring most value towards the company mission and goals.
At the beginning of each quarter team leads sit down with their team and reflect on VOS² progress from the previous quarter and review Specific Metrics for the next quarter. Reflecting on successful completion of a goal is critical: a Harvard Business School study found that learning from direct experience is more effective when coupled with reflection.
As mentioned in my article on company culture healthy organizations encourage some goals to emerge from the bottom up. At Virti, similar to Google, we offer team members “20% time” which frees engineers to work on side projects for the equivalent of one day a week.
In order to measure the progress towards your mission your goals must be measurable and they must be specific. In the VOS² the last item is the Specific Metric. This is most similar to John Doerr's Objectives and Key Results framework.
Studies found that people who recorded their goals and sent weekly progress reports to a friend attained 43% more of their objectives than those who merely thought about their goals.
I usually breakdown Specific Metrics by quarter and track progress using a tool like Asana where the Goals feature can be used to set Specific Metrics and links to projects which team members are working on. You can then set alerts and updates to automate weekly progress reporting.
If you don't have Asana using an excel spreadsheet is fine too and I've included an example version right here for you to utilise. Remember don't set too many specific metrics and focus on you priorities. I tend to use Asana for tracking and rating specific metrics and teams will review and score performance relative to all key results weekly.
Each member reviews their team’s merics before the company-wide meetings each week and comments in the relevant Asana project if anything is off track. We don’t use the metrics for any kind of performance or compensation review as this incentivises setting less audacious targets.
Alignment Tool Implementation
Implementation of any new way of working requires behaviour change and pig-headed determination from leadership. We integrate the VOS² into everything that we do rather than simply set goals and review annually.
Ten percent of Fortune 500 companies have ditched the annual review. Adobe discovered that annual reviews were costing the company 80,000 manager hours a year and in 2012 dropped them in favor of continuous performance management—this combines the quarterly goals and tracking with conversations, feedback, and recognition to lift everyone’s achievement.