If I offered free tickets for you and members of your management team to a presentation given by an acknowledged world authority on each of the following topics, which presentation would you attend? The only criterion is that you would select the topic that would have the most potential to improve your organisation's overall performance. You can only go to one of them.
The choices are:
- Teams and Teamwork
- Management of Change
- Organisational Alignment
- Employee Engagement
Bet you didn't choose Organisational Alignment (OA) - sounds rather boring, doesn't it? No doubt you've said to yourself at some stage or other - "I wish my employees were more engaged" or "we need to manage change much better than we do" or "our teams program seems to be running out of steam" but have you ever said - "we need much greater organisational alignment"?
What is meant by Organisational Alignment that makes it so fundamental to any organisation's performance? It had four sequential components. The second cannot be achieved without the first; the third is dependent on the second and the fourth is dependent on the previous three.
- The alignment of your organisation's Strategic Business Plan (SBP) with the external environment in which it operates
- The alignment of the Support (Operational) Functions of your organisation with the (SBP)
- An organisational structure that is aligned to the needs of the Support Functions
- The alignment of your organisation's staff so that they all understand the SBP, the strategies for its implementation and their role in its execution
Alignment of your organisation's Strategic Business Plan
SBP's have five components - Markets, Products / Services, Activities, Competitive Strategy and Competitive Advantage. Each component answers a question:
- Markets - who are your customers and what are their needs - both now and in the future?
- Products / Services - what are the products and services that your organisation provides to meet those needs - both now and in the future?
- Activities - what functions are we going to perform ourselves to provide these products and services and which are we going to outsource?
- Competitive Strategy - Michael Treacy and Fred Wiersema, in their book, The Discipline of Market Leaders claim that successful organisations adopt one of three generic business strategies and achieve operational excellence by relentlessly exploiting the chosen strategy to the benefit of their customers. The three strategies are:
- Best Total Cost - where Total Cost is made up of Price + Convenience + Risk Reduction (McDonald's?)
- Best Product - a strategy that focuses on providing the best product in terms of design, innovation and quality (Apple?)
- Best Total Solution - a strategy that involves building deep and lasting relationships with customers by customising products and services that meet each customer's particular needs (IBM?)
Which of the above represents your organisation? Or is it a mishmash of all three?
- Competitive Advantage - from your customers' perspective, what makes your organisation "different and better" than its direct competitors who may be following the same competitive strategy?
Alignment of your Support Functions
Support Functions mean Operations, Marketing and Sales, Distribution, Accounts, R&D, Procurement etc. In an aligned organisation, every aspect of each Support Function is driven by the dictates of the SBP, particularly the fourth and fifth components.
Alignment of your Organisational Structure
The two key resources in any organisation are money and people. With regard to the latter - people - it is more than having the right number in the right positions with the right expertise - it is, above all, about having an Organisational Structure that facilitates the work performed by the Support Functions in the execution of the SBP. Most organisations are still structured along functional departments - a Sales Department, a Production Department, a Supply Department etc. Each department has a manager whose focus is on optimising the performance of his or her department rather than optimising the execution of the SBP as a whole. This is why progressive organisations are moving towards cross-functional teams where the focus is on satisfying the customers' needs from every perspective - design, delivery, quality, invoicing, technical service, marketing support etc.
Alignment of your organisation's staff
Most observers associate the term Organisational Alignment solely with people.
Stephen Covey, in his book, The 8th Habit, used the analogy of a soccer team to demonstrate the findings from a study on OA, involving 23,000 employees. I've applied the results to an Australian Rules Football team which, for the non-aficionados, has 18 a side.
If an AFL team mirrored the research results, only 7 players (39%) would know which direction they were playing in. What's more, only 4 would care. Only 4 (22%) would know what position they play and know exactly what they were supposed to do. And 14 (78%) out of the 18 players would, in some way, be competing against their own team members rather than an opponent. These are depressing statistics but I have no doubt that the fundamental reason for them is the absence of alignment in the preceding three components of OA.
When the four components of OA are all in alignment, the basis for great execution had been achieved. It facilitates the other factors that make great implementation possible:
- Management of Change
- Leadership - at all levels
- Teams & Teamwork
- Employee Engagement
Each factor is dependent on the ones that preceded it. How can one manage change if your staff do not appreciate the rationale behind it and have not had any input into the nature, timing and extent of the changes that will impact them? How can leadership be practiced at all levels of the organisation if potential leaders do not have clear goals and strategies for achieving them? How can teams be formed and teamwork practiced if the very organisational structure of the company prevents this happening? How can employee engagement - an employee's emotional attachment to the organisation that results in greater discretionary effort - flourish if the preceding factors are not in place?
The above article is an abbreviated version of a case study that demonstrates just what can be achieved by a highly aligned company - click below to read the full case study.