Peel back almost any case study of a failed organization, and you'll see, more than anything else, an example of a failure of alignment. Alignment, at its simplest, is the entire organization working towards a common goal. It seems so simple, but in practice is really difficult to achieve. Why is this? Is it just some perverse quirk of human nature? Or can alignment happen?

On the Harvard Business School blog earlier this week, there was a post on how Steve Jobs Solved The Innovator's Dilemma. The posting was quite interesting -- and relevant to those of us in the social and public sector -- because essentially, it's not about profitability, it's about passion.

Now that the lockout is officially over, the amount of conversations revolving around football has picked up significantly. Football is something that I enjoy very much and like talking about whenever I get the chance. As a consultant, I also enjoy conversations centered on strategic management and the excitement that comes with each client. Over the weekend, I was talking to a friend about my job and, as most conversations between two, twenty-four year old males do, the topic eventually turned to football. In some odd way, this got me thinking about the similarities between football and strategic management. I know, a weird comparison, but stick with me and I think you will see where these thoughts came from.

So, last weekend, I was restocking wardrobe essentials like t-shirts, socks, etc. As is the case with most guys, shopping is not one of my strong suits. I delay and delay until there is no choice but to retire those trusty but threadbare socks and replace them with a fresh pair.

While I was shopping, the gentleman working the counter struck up a conversation. He said he recently finished college and has been working at the store for almost a year now. I mentioned something about how tough jobs are to find and he said it seems to be getting better- if his sales numbers are any indicator of the overall economy. As a data cruncher, I had to ask how his numbers were tracked and the answer was pretty surprising...

What is a mission statement? What makes a mission statement effective? How do you become mission-driven? These were just a few of the questions that the microfinance institution in Moldova found themselves asking as they began the Balanced Scorecard process.

In my previous blog post, I shared some stories from Dan Pink's book Drive on the new science of motivation. This book has been highly influential in causing many organizational leaders to re-evaluate their ideas about the best ways to motivate people.

In companies and organizations that thrive on creative thinking and innovative solutions, financial rewards and external "carrots and sticks" are being replaced with a new management doctrine of Autonomy, Mastery and Purpose.

But do these ideas really work? What are some real-life examples of Autonomy, Mastery and Purpose, and how can your organization adopt these ideas in your workplace?

Encarta vs. Wikipedia

You don't have to look far for a perfect illustration of Autonomy, Mastery and Purpose. It's a story of two competing projects, pitting hundreds of unpaid volunteers against the mighty Microsoft.

Microsoft Encarta was started back in the mid-1990s. Microsoft paid professionals to design and write an online encyclopedia. Project management practices were implemented to sure it was done on time and done in compliance with all the specifications from leadership.

Encarta essentially said "Let's do this by the rules," and reinforced specific behavior by financially rewarding timeliness and quantity of output. Microsoft then bundled and sold this software as a CD.

As a contrast, Wikipedia was started in 2001, using thousands of mostly anonymous online volunteers to build an encyclopedia. But instead of selling the encyclopedia, Wikipedia made it freely available to the public on the World Wide Web. Instead of rewarding writers with financial incentives, Wikipedia's only reward was its sense of community. Wikipedia rewarded its online volunteers by uniting them in a common purpose and giving special public recognition for those who "went the extra mile" with their contributions.

Instead of doing it "by the rules," Wikipedia said, "Let's do this for fun!"

And whether they intended to or not, Wikipedia created the perfect culture of Autonomy, Mastery and Purpose:

• Autonomy: Thousands of people working on their own, for fun.
• Mastery: Adding one's own expertise and earning respect within the community.
• Purpose: Being part of a movement to create a shared body of knowledge for the world.

Encarta was a job. Wikipedia was a historic mission.

Encarta only published about 62,000 articles in six languages, despite an eight year head start on Wikipedia. The Encarta articles did not have communal input, did not promote autonomy, mastery, or purpose, and Encarta did not succeed. Eventually Microsoft conceded defeat and shut down Encarta in 2009.

Meanwhile, nine years later, Wikipedia is succeeding beyond even the wildest expectations. It is one of the most-visited websites in the world, with 78 million monthly visitors, over 17 million articles, and is available in over 270 languages.

Wikipedia continues to grow with thousands of daily additions in hundreds of languages. And they have continued their culture of Autonomy, Mastery and Purpose by providing a sense of community and rewarding those who "go the extra mile" in adding, editing and moderating content.

Tying incentives to performance

So how can your organization best reward your people if "rewards" don't matter?

The best ideas for incentives come from public recognition of good work. In Wikipedia's case, rewards do not come in the form of a bonus check. But for those individuals who are dedicated and active on the site, they can be honored by becoming a Wikipedia administrator.

With administrator privileges, the honoree gets an added level of Autonomy, Mastery and Purpose. They have the responsibility and privilege of being responsible for the final draft of articles that will be read by millions of readers. They are intrinsically motivated because their work is its own reward.

Wikipedia administrators don't get paid in money, but they get rewarded by being the gatekeepers and standard bearers of a movement that they believe in. Within the community of Wikipedia contributors, this honor is worth more than money.

Atlassian and "FedEx"

Another example is a software company called Atlassian. Atlassian hosts a 24 hour event called "FedEx." During "FedEx," Atlassian developers are given 24 hours of free time to work on anything they want, but they have to "Deliver something overnight." It sounds like a recipe for chaos and wasted time – but "FedEx" has become one of the company's biggest success stories, with the special Autonomy time leading to many important product developments.

Why does it work? The "FedEx" winners are heartily celebrated within the company. Winning the "FedEx" presentation is widely prized within the company – much more than arbitrary cash payments would be.

Through this event, Atlassian gives its employees Autonomy, Mastery and Purpose.

• Autonomy: Freedom to work on whatever they like.
• Mastery: The chance to develop something that they're experts in and truly care about.
• Purpose: Feeling connected to a high-visibility, exciting opportunity that matters to the company and is admired by their colleagues.

"Sure, it sounds great," you might say, "But I've never heard of Atlassian... "

Have you ever heard of Google?

Google – 20% Time

This 21st century phenomenon intentionally under assigns each employee. Google gives every employee "20% time" – the equivalent of one full workday each week to use their time however they see fit. Google employees use 20% time to invent, explore and work on any projects they are interested in, in any environment they like. Google's "20% time" has resulted in hugely valuable ideas. Gmail, Google News, and other popular services were invented during Google employees' 20% time.

Atlassian and Google both understand that the future is driven by new ideas and fulfillment of a larger purpose – and they give their employees the autonomy to pursue it.

Sharing Responsibility

Perhaps the most surprising lesson from Dan Pink and the new science of motivation is that greater freedom often results in greater responsibility. Given the chance, people will start to work harder and think smarter – for their own sake.

If employees are given simple tasks, clear goals, and promised more money to do more work in less time, the organization might make incremental improvements.

But if employees are truly motivated from within, then the sky is the limit. If employees have a spirit of Autonomy, Mastery and Purpose, they will have the freedom and inner drive to develop truly creative solutions. Intrinsic motivation – where work is its own reward – is the best way for your organization to achieve transformative goals.

Every organization needs to get the most out of its people, especially with the looming skills shortages that the U.S. workforce will be facing in a few years. Maximizing our human potential can start with trusting in employees and giving them the freedom to innovate.

For most of the 20th century, the quintessential American job was in a factory. Workers earned good incomes and middle-class lifestyles by doing repetitive, high-volume tasks. The way to motivate workers at these jobs was simple: "carrots and sticks." Pay people more money for doing more work, and punish people for breaking the rules.

Today, in the 21st century, the best organizations must act less like factories and more like think-tanks. The winners of the 21st century workplace will not be the ones who make the most widgets, but who can create and incubate the most creative and game-changing ideas.

But what many social scientists are discovering is that the motivational styles of the 20th century "factory" workplace do not work as well when motivating people to perform creative tasks. If the successful model for a 20th century organization was a factory, the successful 21st century organization will look more like a social movement.

This means that 21st century organizations need to embrace a new style of motivational leadership. Carrots and sticks must be replaced with deeper, more personal, more powerful motives for success.

Current research (outlined in Dan Pink's bestselling book Drive) is showing that when it comes to creative, innovative work, money is not what really motivates people. When organizations are really looking to achieve breakthrough innovations, they need to motivate their workers in other ways: by recognizing people's innate desire to be a valued team member who contributes to significant solutions.

Money only covers the basics like shelter and food. To encourage truly creative thinking, the work and related result must become its own reward.

What really motivates people?

To see great gains, organizations need to make a cultural shift away from short-term gains and contingent incentives. Instead of saying, "if you do this, then you will get that," organizations need to move toward a culture where people are self-motivated to do their best work. This is the best way to get employees to take responsibility, take (smart) risks, and develop truly creative solutions.

In July 2009, Dan Pink gave a talk to the TED conference about the surprising science of motivation. Social scientists and economists are discovering that when it comes to creative thinking, people are most strongly motivated by intrinsic factors ("doing things for their own sake") not from extrinsic motivators ("carrots and sticks"). To get the most creative solutions for your most complex challenges, you need to create a culture where people have Autonomy, Mastery and Purpose.

What do we mean by these terms? And does it really work?

In his lecture, Dan Pink discusses how experiments have shown that financial incentives only work for routine tasks. When there is a clear set of rules and a single solution, people can get the work done faster when they are promised more money.

The trouble is: most of the biggest challenges that our organizations are facing in the 21st century are anything but routine. Automation and outsourcing can replace any lower-level or repetitive task. For more complex cognitive thinking and creative work, financial incentives do not work. In fact, these financial incentives actually distract from truly creative solutions.

As Dan Pink says, "enticing people with a sweeter carrot or threatening them with a sharper stick" does not work in the business of thinking creatively.

In contrast to "sticks and carrots", Dan Pink introduces the concepts of Autonomy, Mastery and Purpose.

• Autonomy: People feel an urge to direct their own lives.
• Mastery: People feel a drive to get better at something that matters.
• Purpose: People feel an innate need to be part of something larger than themselves.

If your organization can help your employees achieve feelings of Autonomy, Mastery and Purpose, you will likely "AMP" up your performance. Employees who have Autonomy, Mastery and Purpose are intrinsically motivated, full of internal drive. They're doing work for its own sake. They're doing work that matters, that interests them and that they feel is important. This is a huge difference in attitude from just punching a clock at the "factory."

Don't forget Maslow.

To be sure, money matters to some extent. People want to earn enough money to have food and shelter and a safe place to live. But once those basic needs are met (as Maslow's Hierarchy of Needs states), people aspire to meet higher needs – love and belonging, esteem, and self-actualization.

Once people have a decent standard of living, additional money doesn't really motivate them as much as Autonomy, Mastery and Purpose.

Organizational leaders are re-thinking some long-held assumptions about what truly motivates people. External motivators like money are less important (and less effective) than helping your employees light their own spark of motivation within themselves.

Typically, organizations can identify hundreds of projects that "need" to be completed. Most of these projects address a problem, usually someone feels burdened to implement them, but oftentimes the leadership team has not identified, defined, or actively managed those projects for maximum strategic impact.

Without discipline from the top, hundreds of projects continue to go unfinished and over budget without any real impact on the organization's mission.

Perhaps it's time to try a new approach.

What are Strategic Initiatives?

Strategic initiatives are key action programs focused on achieving a specific objective or closing a gap between a measure's performance and its target. They provide organization leadership with a framework to review all the current projects, define the expected impact on the mission, and then focus on those few key projects that will cause immediate and measurable changes in how the organization functions. Strategic Initiatives are not "business as usual," they are the few critical projects key to improving an organization's delivery on its mission.

Defining and Prioritizing Strategic Initiatives

First you have to define the need: Why prioritize initiatives? You need to narrow the list of activities that the leadership team focuses on to the few things that will truly drive the execution of the strategy. The Strategic Initiative selection process begins by collecting a complete list of projects. All relevant information such as project budgets, expected benefits, risks, and owners or project managers should also be collected. Once this list is complete, leadership is ready to begin the review.

Each project should be plotted against the organization's Strategic Objectives. Add a mark for each Strategic Objective that the project will positively impact. See Figure 1 for an example.

Analyze this chart and begin prioritizing each project as High, Medium, or Low strategic impact.

Thinking about Alignment

Projects without strategic impact on any objectives are not good candidates to become Strategic Initiatives. Instead, these low-impact projects should be considered for cancellation.

In the same manner, if a Strategic Objective does not have any current projects supporting it, leadership should consider assigning new projects to support the Strategic Objective, or re-evaluate whether the objective is being sufficiently defined and delivered upon.

Selection and Implementation

Strategic Initiatives are like the U.S. Marines – "the few, the proud." The leadership team should be paring down the list to a select, high-priority group of Strategic Initiatives that will stand out against the noise of operational and day-to-day projects.

For example, some people within the organization might consider routine capital expenditures for preventive maintenance to be a project, but this is a task that does not have to be discussed and managed at the executive level, and it will typically not drive a change in performance of strategic measures. Strategic Initiatives need to be limited to only those efforts that have the potential for significant strategic impact on the overall organization.

Routine operations and low-impact projects are about "doing things right." Strategic Initiatives are about "doing the right things" that will make a big difference for the long-term strategic position of the organization.

Ideally, by the end of the selection process, the original list of many projects has been narrowed down to 8-15 Strategic Initiatives. Each of the initiatives now has a defined outcome directly related to the Mission and Strategic Objectives. Additionally, each Strategic Initiative also has an enthusiastic Owner who is responsible for drafting a budget and key milestones and then presenting this plan to the leadership team for approval.

Through the process of prioritization, the leadership team should be building consensus and understanding about how organizational resources will be best allocated in achieving Mission-Driven Success. There should be a major reduction in non-strategic projects, instead shifting to an alignment of effort behind these few key Strategic Initiatives. The entire organization, including leaders and those on the front line, should feel less stretched and more supported in completing the projects that will directly drive up performance measures.

Strategic Initiatives are not about "doing more with less," they're about helping your entire organization focus on doing the most important work, and setting aside lower-priority distractions.

Tracking Tools

Milestones are a key project management tool to use with Strategic Initiatives, serving as points in time when major tasks begin or end. The Initiative Owner is responsible for ensuring major milestones are completed on schedule and on budget, and should also keep the leadership team up to date on progress.

Leadership does not usually need to know about minor milestones, but they should be updated whenever a major milestone is falling behind schedule or needs more resources.

For projects with multiple milestones in planning, start-up, delivery, and completion; an Initiative Owner may consider using a simple Gantt chart to communicate with the Leadership team. Gantt charts model the progression of a project by individual tasks over time and can help a leadership team better understand a plan's progress in relation to other plans. See the image below for reference.

Follow Through

Leaders need to take responsibility for initiatives and milestones. Like your objectives and measures, you should report on the progress of completing your initiatives each month or quarter when you report on your Balanced Scorecard. Several things can cause red flags to go up with initiatives: you may be behind schedule, you may lack the resources, or you may be over budget.

Like objectives, you should flag initiatives as red, yellow, or green and come up with a plan to correct the initiative. Maybe the strategy has changed or it has become less important to complete the initiative within the given environment. Regardless, you need to report what you learn and demonstrate its impact on the execution of the strategy.

Successfully executing on your initiatives will increase your measures improving significantly over time. A disciplined focus on your key strategic initiatives will help your organization avoid distractions, eliminate wasted effort, and get results on the objectives that matter most.

This is the title of a new working paper at Harvard Business School. The paper, found here, is the result of some great research being conducted by Lisa D. Ordóñez, Maurice E. Schweitzer, Adam D. Galinsky, and Max H. Bazerman, all professors at various business schools. The premise is that goal setting may cause more damage than benefits. This may be cause for concern if you have been creating personal scorecards or otherwise been working to link your employee performance to the Balanced Scorecard.

One of the most notable current trends in the nonprofit arena is for donors to look for a "return on investment" for their charitable giving. They want to know that their donation to one organization will yield social impact. More than that, they want to know that your organization will yield a greater impact than another cause to which they could donate.

This is a positive trend for sensible- dare I say- strategic charitable giving. However, the outcome results or impact measures are not the indicators that leaders of nonprofits should be managing. Rather, leaders need to focus on the underlying cause and effect linkages that drive impact.