Organisational Alignment
Achieving Execution To Die For
There is no one factor that stands above all others when it comes to great execution. However, given that, for any organisation, there are a limited number of business strategies available, the ability to execute – and to execute better than your direct competitors – is fundamental to remaining in business and achieving a competitive advantage.
Organisational Alignment is identifying the complete operational process from planning and execution to monitoring, measuring and modifying, the execution of each step in the process is dependent on those that precede it. The axiom that a chain is only as strong as its weakest link is particularly appropriate. Nevertheless, there is one factor that has more impact on the quality of execution than any other.
It’s Organisational Alignment or OA.
And yet, despite its significance, in comparison with the airplay given to other factors such as Change Management, Leadership, Teams and Teamwork and Employee Engagement – to name a sample – OA seems to fly below the radar. It lacks the appeal of the aforementioned and is less easily packaged by academics, trainers and consultants alike. It can be likened to the hidden foundations of the towers of a suspension bridge or to an operating system that allows us to run the latest applications software.
Most observers tend to associate OA with the alignment of people within an organisation but it is more broadly based than that. It has three components:
- The alignment of business strategy
- The alignment of the organisational structure
- The alignment of staff
Great execution requires the alignment of all three, beginning with the alignment of the business strategy.
The alignment of the business strategy
Alignment with what you might ask? Put succinctly it’s the alignment of the markets’ needs – both now and in the foreseeable future – with the capabilities and resources of the organisation. Business strategies should have an external perspective. They are made up of five components – in the following order:
The markets the organisation currently serves – are they stable or are they changing? If the latter, do you have any control over the direction of the changes or do you need to adapt to them?
The products / services supplied to meet the needs of the markets
The activities the organisation undertakes to provide those products / services to the markets. If you are a manufacturer, for example, do you manufacture in-house or use a component supplier?
Competitive strategy – what broad strategy are you going to follow? Are you going to offer a Total Solution, Best Product or Best Total Cost
Competitive advantage – what makes your organisation ‘different and better’ from your customers’ perspective?
When you have completed the above analysis, the next step is to assess its impact on each and every function within your organisation. Does your organisation have the capabilities to execute the strategy? Does it have the resources? If the answer is “no”, you need to change the strategy. But if the answer is “yes”, the second component of OA comes into play.
The alignment of the organisational structure
Traditional organisational structures owe far more to organic growth than they do to the need to execute a market-focussed business strategy. The structure is based on function – sales, customer service, distribution, operations, procurement etc. – with each function having its own manager. The functional managers make up the executive team. However, when it comes to implementing a market focussed business strategy, this type of structure has three major weaknesses:
It results in a stratified management structure where those functions in the lower strata – for example, procurement – have no direct or indirect contact with the external customer
Functional managers are focussed on optimising the performance of their own departments rather than the performance of the organisation as a whole
Rather than a collective approach to implementing the business strategy it leads to a disjointed one – “that’s your problem, not mine”.
Every function within an organisation contributes to customer satisfaction. Product or service quality, delivery-on-time, pricing, customer service, technical service, can-do attitude, the business relationship etc. Everyone has a part to play. Satisfying the customer is a collective task that crosses functional boundaries. It makes sense, therefore, to structure the organisation with an external perspective with cross-functional teams looking after particular customer groups or market segments. It might not look as neat and symmetrical as the traditional organisation chart but the adoption of an organisational structure best suited to the execution of the business plan is a key factor in Organisational Alignment.
The alignment of staff
There are three imperatives in the alignment of staff behind the implementation of the business strategy:
Everyone understands where the organisation is now
Everyone understands the destination and the journey
Everyone understands their role in getting there
Fundamental to alignment – and to the management of change – is that there should be agreement on the current reality. Firstly, the current reality is an understanding of the environment in which the organisation operates now, how that environment is anticipated to change and the potential impact of those changes on the organisation’s markets, products / services and activities. Secondly, the current reality is an appreciation of the organisation’s current performance. It is very difficult to get everyone behind a strategy if people have differing opinions on the need for it in the first place.
The destination is the goal and the journey is the competitive strategy.
The former should involve everyone in its attainment and be understandable to the most junior staff member. If you look after the customer, the profits will look after themselves so a measure of customer satisfaction makes a great overall objective. The goal should also be SMART and it should be regularly measured and communicated to all staff.
That brings us to the third consideration – everyone understands their role in getting there. Goals spawn strategies and each strategy spawns a number of subsidiary objectives, the achievement of which leads to further strategies and so on. Each function will have its own objectives and strategies but the key point to make is that every strategy and objective can trace its lineage back to the corporate goal.
The aligned organisation
When your organisation is aligned in the manner depicted above, the foundations for great execution have been built. Consider the impact of OA on the five key execution factors:
- Alignment of staff
- Management of change
- Leadership
- Teams and teamwork
- Employee engagement
The first – alignment of staff – has already been addressed but what of the others? Change is a constant these days and it has been estimated that 70% of your staff would prefer a continuation of the status quo but will accept change – given a convincing reason to do so. Aligning your staff will provide the rationale for change and hence the implementation of the changes will be that much easier and effective.
When it comes to leadership, it’s important that staff at all levels take responsibility for their part in achieving the goal. And for any staff member to feel comfortable and committed enough to do that requires a high degree of alignment with each of the three components of OA.
If groups of people are to function effectively as teams and develop teamwork there are a small but vital number of prerequisites. The potential team must have a defined purpose and a goal. What’s more, the team’s purpose and goal must relate to the purpose and goal of the organisation as a whole. No amount of training and exhortation will compensate if these fundamentals are lacking.
The last factor is employee engagement – the employee’s emotional attachment to the organisation that results in greater discretionary effort. This is the most dependent of the execution factors and results from the development of all three aspects of OA.
Achieving and maintaining great execution is very challenging in today’s work environment. The underlying problem is change – both its severity and frequency. When change results in a drop in organisational performance, it is all too easy to treat the symptoms rather than the causes.
“We need to update our Mission and Vision statements.”
“Our teamwork needs improving.”
“What we need is a work well-being program to help our employees deal with stress.”
Whereas what is really needed is a realignment of the three components of OA beginning with a review of the business strategy.
By Graham Haines
Republished from the International Institute of Directors and Managers (IIDM) – www.iidm.com