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Re:Align
A Leadership Blueprint for Overcoming Disruption and Improving Performance
Jonathan Trevor
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eBook - ePub
Re:Align
A Leadership Blueprint for Overcoming Disruption and Improving Performance
Jonathan Trevor
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About This Book
Why do some businesses thrive while many more struggle? In this age of disruption, a key reason is the failure of many leaders to realign all the moving parts of their enterprise, including its business strategy and how it is organised, to best support its enduring purpose. Thousands of enterprises globally are operating below their potential simply because they are not well aligned or fail to realign to reflect the new realities of their changing business environment. This book aims to change that. This book is about strategic realignment, a leadership process to overcome disruption and secure high performance on a sustainable basis. Given that change is a constant and disruption to the business environment ever more likely, strategic realignment must become a core competency in order that all enterprises and leaders can succeed in the future. Most executives recognise this but lack a robust system of thought to execute strategic realignment effectively and realise its full benefits. But once mastered, strategic realignment offers a means of turning disruption into an advantage. In Re: Align, Jonathan Trevor provides a blueprint to help leaders ask good questions, have better conversations and make the best possible choices to realign their enterprise to be fit for purpose. Drawing upon active research at the University of Oxford's SaĂŻd Business School (with contributions from the joint works of Dr Jonathan Trevor and Dr Barry Varcoe), the book also provides practical case studies and evidence-based insights. Re: Align offers both a thoughtful and compelling message as well as an effective toolkit to help leaders everywhere to overcome disruption and improve enterprise performance.
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1
Introduction to Strategic Alignment
Section 1.1 A familiar story?
I had spent two days shivering in an overly air-conditioned and nondescript conference room with the companyâs executive board members. I was facilitating a workshop to address fundamental questions about the companyâs corporate purpose, strategy and organizational design. As a business school professor consulting to the companyâs senior leadership, it was not an easy task. For a start, nobody wanted to be there. For many of the senior managers, it must have felt like another distraction from the day job. But I knew that the companyâs CEO had become increasingly frustrated with his top team â with good reason. The future of the company looked uncertain.
On the face of it, the company was performing well. Over 25 years, it had become a major player in its region and the second-largest competitor in its home country market. The fact that the company had achieved such stellar growth was rightly a source of great pride. But the company was still feeling the effects of the global recession some years earlier. Making money had become harder, and investors were unsympathetic. As a start-up challenger to the old order back in the day, the company had been the first to introduce novel technological innovations. They were no longer a differentiator 20 years later.
At the same time, the companyâs customers had become increasingly sophisticated and were willing to take their custom elsewhere. Rather than off-the-shelf products and services, they expected greater choice and personalization. And they preferred a one-stop shop for their needs. There were more competitors than ever before. Interestingly, the leadership team still thought of competitors in terms of the usual suspects â other established companies in its industry. However, there was a sense that, elsewhere in the world, there were new and disruptive entrants to the marketplace. âDigitalâ was a word much bandied around but little understood, especially regarding how the company might respond to it as either an opportunity or a threat.
The CEO used to have all the answers to the companyâs challenges â he had built a highly successful career on it. He was hugely popular among staff and enjoyed a reputation as a canny operator and a generous and charismatic boss. His âwalkaboutsâ of the companyâs offices were celebrated by staff. The sharing of selfies with the âbig bossâ on Facebook was not uncommon. But now, it was obvious that he could not have all the answers, and he turned to his top team for help. He wanted to create a vision for the long-term future while also delivering the short-term results demanded by investors.
His executives were woefully unprepared for this task. It was clear that they only came together for strategic discussions as a committee of direct reports â not as a team. When questioned, nobody seemed to understand in any detail what was happening outside of the company. This was concerning as the company operated in one of the most competitive markets in its sector. Individually, they struggled to look beyond their own areas of responsibility and think of the company and its direction as one enterprise. A competitive atmosphere prevailed at executive board meetings â someone doing poorly made the others look better by comparison, or so they thought. While they had a shared interest in the balance sheet, there was no unified sense of purpose.
To compound matters, day-to-day firefighting was taking up the lionâs share of executive focus; there was neither the time nor the appetite to have conversations about the future. As a result, the company lacked a coherent and well-understood vision and strategy for the future, or even the very near future. There may have been frenetic activity all around, but there was very little progress.
In lieu of a long-term strategy, the company responded to its challenges by doubling down on its existing business model. This meant pushing its lines of business even harder, minimizing costs and squeezing every ounce of âjuiceâ out of its assets. This included its people. The strategic focus was not on innovation but on execution â doing the same as it always had, just better. Practically, attempts were made to be more efficient at allocating resources, controlling performance and beefing up operational governance. This âbureaucratic intensificationâ process was accompanied by buzzwordy statements about becoming more innovative, more joined-up and, in particular, more agile. Words and deeds, however, were inconsistent and confusing.
From an external perspective, it was hard to say what differentiated the company from its competitors. It wasnât more innovative than any other enterprise. Nor, if truth be told, was it any more efficient. It was running in the same race as its competitors and doing so in the same way. Despite the burning need for competitive differentiation, ideas about how the company might be better aligned to changing customer needs and stand apart from competitors remained elusive.
Even if the executive board had wanted to pursue a different business strategy, there would have been significant barriers to implementation. Organizationally, the company resembled a âhub-and-spokeâ type structure. This was not intentional; rather, it had emerged naturally over time. As it had grown, the company had diversified into new product areas and markets. As it did so, it set up teams to mine opportunities in new markets as best they could. Inevitably, multiple specialist teams branched off into several separate business lines. Over time, these had come to form the bulk of the companyâs easy-to-forget organizational chart.
The hub-and-spoke structure had worked well when the company was small and straightforward. It permitted each business line a good deal of freedom to respond to customer and competitor pressures in its area. The engagement had been high, especially at the coalface â staff were highly invested in making their bit of the business work.
The downside was that each business line had evolved to be a stand-alone unit. Sure, there was a standard corporate logo and strapline (although no one could remember it easily), but there was little in the way of day-to-day collaboration between staff in different business lines. Obvious synergies were not exploited. Staff were incentivized to maximize the performance of their area, but no more than that. In the past, this hadnât mattered much. The company had grown fast precisely because its various parts were performing well and maturing into serious market players in their own right. But today, it meant the company was incredibly siloed.
In practice, this meant that service lines pursued different priorities, and the left hand didnât know what the right hand was doing. Turf wars between different lines of business and geographies were commonplace. Individuals guarded their client relationships jealously and didnât share opportunities with colleagues in other departments for fear of losing control or diluting their bonus. It felt like the various departments within the company were battling each other rather than external competitors.
The siloed structure was a problem for customers too. Customers wanted to interact with a single touchpoint to have easy access to the full range of the companyâs offerings. In reality, the same customer dealing with two different parts of the company would be treated as a separate customer in each case and experience two very different ways of working.
In the early days, when the company was much smaller and less complex, the CEO had been able to be everywhere all the time, or at least that is how it had seemed. At the time, there was little consistency of management style across the company, but it didnât matter, as long as he could intervene from the top. The CEOâs job had been to corral his best performers to go out, beat rivals to the punch and stake the companyâs claim.
Today, however, the market had matured. The companyâs growth had abated. It was being held back by the same structure that had once supercharged its growth. As it had grown, it had become much more complex: hundreds of employees had become thousands; a handful of business activities had become a diverse portfolio; one or two locations now extended to a major regional presence with multiple offices; and limited business relationships with local institutions now formed a complex web of international partnerships. Misalignment between the companyâs different lines of business, functions and hierarchical levels made achieving meaningful organizational change all the more challenging.
The view from staff in middle ranks, those closest to the customer, was that the executive board needed to âself-disruptâ. They should realign the company proactively and not wait until forced to do so under crisis conditions. Even if they had wanted to, it was obvious to me that the companyâs top executives didnât know how to approach the realignment conversation. They lacked a blueprint to think strategically about aligning their enterprise and realigning it over time. They didnât know which questions to ask, which conversations to have and which choices to make to give the company the best possible future.
It didnât help that investor pressure for short-term results was so high. The more the company struggled, the more investors panicked and ramped up the pressure for quarterly results. This distracted the executives even more from devoting time to longer-term strategic considerations, which jeopardized future performance. It was a vicious cycle. A breakthrough was required, but in the absence of meaningful joined-up direction from the top, the status quo persisted.
I spent about three months at the company, on and off, asking âdumbâ questions and trying to encourage people to develop robust answers to overcome disruption and improve performance. I must have sounded like a broken record, and I certainly felt as if I was bothersome. My engagement came to a natural conclusion, and I moved on to new things and a new academic role. In the six months following my departure, I learned that the company had failed to meet its targets, and investors were not happy â profits had taken a double-digit dip.
Within nine months, the CEO had been summarily removed from his group position, despite more than 25 years of stellar service. The companyâs chairman replaced him as an interim measure until a new successor could be found. Several of the executive board recruited originally by the CEO also left, although some had survived. The last I heard, the companyâs chairman was still holding the reins â and not by choice.
As I reflect now, itâs sobering to think that all of the reasons why the company was not performing were internal. Sure, the external environment was changing, but that was a challenge for everyone, including competitors. The only thing holding back the company was, well, the company itself.
Section 1.2 Strategic alignment
Does any of this real-life inspired story sound familiar? In my experience, the company illustrated in the previous section is far from unusual. Most leaders I work with know intuitively that aligning the core elements of their enterprise, including its strategy and how it is organized, is critical to its performance.ii They express this innate knowledge using informal language such as âWe need joined-up thinkingâ or âWe need to get our ducks in a rowâ. The problem is that operationally they lack a robust system of thought â or blueprint â to help them to do so. They are not alone. Thousands of enterprises globally are operating below their potential because they are poorly aligned. This book aims to change that.
While the concept of alignment â or âfitâ and âcongruenceâ as it is also known â is not new, part of the problem is that it means different things to different folk.1 For example, employee relations and human resources specialists see alignment as synonymous with employee engagement, demonstrated in enhanced employee effort and positive behaviour. For strategy folk, alignment is implementation by another name. Indeed, there is an entire field dedicated to âstrategy executionâ as a sub-discipline of strategic management. For software engineers, alignment is how well different âstacksâ of code speak to each other. More widely, chiropractors use the term in their practice,...