Strategy

The Clarity Pyramid

March 31, 2023
Louis Georgiou

Over the last five years, I’ve found myself rarely working in my comfort zone of UX and product development. Instead, the culmination of my 24 years of running a technology business and engaging with some of the nation’s biggest and most complex brands and organisations has given me a strong point of view of what makes them successful, which I’ve enjoyed helping more businesses adopt.

It has become apparent that a known set of elements described as a ‘modern management model’ has evolved in the last ten years as a playbook for businesses that want to grow and stay ahead of their competition.

I plan to explore these elements over a number of articles in more detail over the coming weeks. Whilst I don’t think these will be a surprise to most people in design and tech, I’m also seeing a growing appetite from even the most traditional businesses to change internally and adopt more progressive approaches.

What does surprise me, though, is the number that chooses to ignore them or pay lip service to acknowledge them but do nothing to actually deliver against them.

How did we get to organisational change?

Let’s start with a super brief explanation of the drivers of change. If you haven’t noticed, technology has transformed the world and won’t stop. The next biggest catalyst will be AI – just take a look at the opportunities of tools like ChatGPT, and we’ll have to rewrite our business playbooks again. But that’s for another day!

To date, the user-centric digital products we’ve meticulously crafted for years have reset our customer’s behaviours and expectations. These digital experiences and changing customer expectations have forced businesses to reimagine how they provide their services, which in turn is forcing them to adapt internally to deliver them.

As Code has always been at the forefront of Product and Service Design, it’s given us an up-close view of the impact within organisations and their need for change.

Some things never change

Before we get lost in the acronym jungle of the modern business world, let’s return to some simple truths. Our businesses have changed massively, and as leaders, our roles are quite different today too, but our people have needs that haven’t changed for decades. Fundamentally, they still need clarity from their organisation about where it’s heading and the expectations of their people.

As a leader, clarity is arguably your number one goal. When we have clarity, we can have alignment, meaning we can act with more autonomy and take more accountability. Coupled with better decision-making, we’re ultimately reaching our goals quicker. And along the way, our people are more engaged, motivated and happy. Why would we not ruthlessly prioritise this?  If I were to draw a (rough) equation, it’d look something like this…

Clarity, alignment and ownership make us go faster, but this is undermined by slow decision-making, lack of accountability and absence of trust.

The components of clarity

One of my most influential authors is Patrick Lencioni, who is famous for works such as The 5 Dysfunctions of a Team and Death by Meeting. His book, The Advantage (2012), particularly convincingly argued that organisational health trumped everything else, even business strategy.

My view is that the two are so tightly intertwined it’s hard to separate, but one of the core (and starting) pillars of the Advantage model was the need to create clarity within the organisation. By his definition, answering these questions: Why do we exist? How do we behave? What do we do? How will we succeed? What is most important right now? Who must do what?

In my mind, these are still absolutely applicable today, and we often reference these within our own business and with those we work with. We’ve expanded on this and created a simple model for organisations to create clarity. This is the Clarity Pyramid. It has one additional benefit, each of the components is connected to the component beneath it, and it’s this connection and cascade that will ensure all functions/departments/teams within our businesses are aligned, and their efforts are all contributing towards our highest, collective goals.

It’s not revolutionary. In fact, these components of clarity should be considered hygiene factors for all businesses, but the real benefit is when they are connected to every member of staff, guiding their daily activity in service of the overall mission. There are many established models, most of which share the same components or are variations of the same ideas – it’s worth having a further read to familiarise yourself with the landscape. There’s VMOST, Hoshin Kanri, V2MOM, Balanced Scorecard and Blue Ocean Strategy, to name a few.

Mission

Our mission, or purpose, is quite simply the reason why we exist, our purpose for being, beyond financial gain of course. Note: I use these terms interchangeably as they are so close in usage that it’s not worth separating, but I often lean towards purpose. What are we contributing to the world or our stakeholders (staff, customers, community)? It should be aspirational and enduring to motivate our people and guide our behaviour.

For some businesses, their purpose is so strong it is a crucial factor in attracting and retaining both customers and employees whose personal values closely align with the ethos of the business – think Patagonia, Apple or Unicef.

The organisation’s purpose should rarely change, and can often be answered by asking the founders why they created the business (if they’re still around), the human truth of what excited them about the opportunity and what they wanted to achieve.

Vision

Whilst the mission or purpose will be constant, the organisational vision should be used as a more practical tool to guide the business in the direction of change. It’s a great mechanic to ensure we adapt to changing business, market and customer conditions, and the vision should paint the picture of the new future state we are working towards.

Again, it’s not revolutionary, but we find that most businesses miss the fact that visions should also be cyclical and, at regular intervals, needs to be reviewed and renewed to point the business in the best new direction, taking on board all the learnings from the previous iteration.

The EOS model (great system by Gino Wickman) describes a company vision in two parts. One is a much longer-term aspiration, a single statement that describes our target for the next 10, 15 or 20 years etc. This takes our thinking away from the realities of today and frees our minds to dream big. These are often also known as Big Hairy Audacious Goals (BHAGs!). The second part is a more accurate picture of where we want the business to be in a much shorter timescale, typically three years, describing in more detail our goals, deliverables and key metrics at that point.

The vision cycle will absolutely depend on the speed of change within your business and sector. Three years is typically a good starting point – it offers enough time to make meaningful change, yet will come around quickly enough to keep you thinking about on what’s next. Again it will depend on your sector but also your ambition. For example, a software start-up looking to become number one in its sector may take a while to achieve, but it may need various pivots and refocus points along the way.

Whilst a good vision is a very tangible leadership tool, when it is also made to be exciting and inspiring for our people, it can be your best motivation tool for acquiring and retaining the right talent.

Values

Our values are important as they should shape how our people behave, which in turn defines our culture. If we’ve got clarity on our purpose and a real focus on where we are heading (through the vision), we need to ensure we have the mindset, attitude and behaviours to deliver it. Personally, I’ve found the underlying behaviours to be more valuable than the high-level values themselves, as they give us something tangible to observe and nurture. I’ve often seen values underutilised and rarely referenced beyond posters in the boardroom or appendixes in corporate documents.

Patrick Lencioni describes these really well in The Advantage, classifying our behaviours as Core (the key behaviours we want today), Aspirational (not in the business yet, but we want to develop them), Accidental (they exist in the business, but we don’t want them) and Non-negotiable (you won’t get hired if you don’t have them). Some of the best businesses I’ve worked with have incredible clarity on their expected behaviours and use them at the heart of their people development and appraisal activities.

Ultimately, it’s the culmination of our people’s exhibited behaviours that defines a business’s true culture. As my fellow Code founder Tony Foggett often describes, “It’s what people do when nobody is watching“.

Strategies

Hmm, strategies. This is undoubtedly the most overused and often the least understood phrase in modern leadership. It’s no surprise because it’s hard to pin down consistent definitions, and there have been dozens of conflicting strategy models over the last 40 years, so it’s hard to know which to follow. I’m guilty of this, too; I’ve introduced numerous strategic models and approaches to our business over the years, always looking for the magic bullet.

If we have a defined vision we want to achieve, our strategies should describe our intentions and our areas of focus (sometimes described as our ‘big bets’) to best achieve that vision. That is the simplest way to describe our strategies. Consider them as areas of focus, broad enough to give our departments and teams room to ideate yet focused enough to point them in the right direction. If we want our businesses to be laser-focused, we need a small number of strategies for them to engage with, three being ideal and five the maximum.

Another simple way to describe our strategies is to answer the question, how will we win? So a shared view of ‘winning’ is key, as is a shared understanding of our strengths to play and opportunities to exploit.

Objectives

As we move down the pyramid, we become more specific, working in shorter time loops and involving more people within the business. My preferred model for managing objectives is via OKRs.  OKRs (Objectives and Key Results) are incredibly simple to understand. They work in annual and quarterly cadences, cascading to all departments and teams, giving them ownership and accountability for objectives, but are connected to the high-level company goals, strategies, and vision.  

They have the right amount of rigour without being overly cumbersome but ensure our teams contribute to the bigger picture.

Note: OKRs do differ from KPIs. Where KPIs measure how well we’re performing operationally, OKRs are used to measure our performance against our change ambition (the vision).

My favourite way to describe the difference is the analogy of a car journey – the dashboard being the KPIs, showing fuel, tyre pressure, oil, etc., indicating the car is functioning correctly, whereas the destination points on the satnav indicate we’re getting to where we want to be.

Tactics

Finally, we hit tactics, which we’re all doing daily. Our teams will perform these specific actions, tasks, projects, initiatives, or workstreams (however you want to refer to them and manage them) to achieve their objectives.

OKRs provide our teams with a natural quarterly rhythm to hit their specified results, but this is typically translated into high-level plans or roadmaps to clarify the specific work needed.

Progressive organisations will apply the best of lean thinking and agile practices to deliver their work, regardless of their sector or functions. Done right, agile working is the best way to engage teams to achieve their best performance. Teams using the Scrum framework (or Scrumban variations) will typically have a 2-week cadence (the ‘Sprint’), giving their teams even more clarity and focus in shorter cycles.

The Cycles

To bring it all together, the Clarity Pyramid makes more sense when we can visualise the working cycles that it drives. From the (very) long-term Vision, which is emotive and aspirational, to the very practical weekly/daily tactics that deliver it. This concept of the ‘planning onion’ is another idea borrowed from the Agile/Product world but is easily applicable to overall business vision and strategy, not just digital products.

My closing advice when developing your vision and strategies; is to get the most buy-in and engagement (and therefore momentum) across the whole organisation and make sure they are relevant to the widest group of people so that all teams and individuals can contribute towards them through their own objectives. Business vision, strategies and objectives should not be the sole responsibility of the C-suite or their Senior Leadership teams. They need to be understood, influenced and owned in some way by the wider business.

Creating clarity should be your primary task as a leader, so take the time to do it right and have fun along the way.

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Is your business suffering from departmental silos, poor collaboration and low productivity? We can help your teams upskill and become more effective, establish new ways of working and even kick-start cultural change.

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