The Organizational Alignment Handbook

A Catalyst for Performance Acceleration

H. James Harrington, Frank Voehl

• Editorial: Productivity Press
• Año: 2011
• ISBN:
  9781466513068
• Edición: 1
• Categoría: Business
• Categoría: Management

In the same way that a well-defined approach is needed to develop an effective strategic plan, an equally well-designed approach is needed to support the alignment of your organization's structure, management concepts, systems, processes, networks, knowledge nets, training, hiring, and reward systems. Examining top-down, bottom-up, and core plannin

1

Overview

Each time there is a major change to the Strategic Plan, the management team should consider doing an Organization Alignment exercise.

—HJH

Why Organizational Alignment?

In an effective organization there is congruence between purpose, strategy, processes, structure, culture and people. It is the challenge [of] the leaders to orchestrate this alignment and to still promote innovation and change.

—David J. MacCoy

• Definition: Organizational Alignment is the methodology that brings the organization’s structure, processes, networks, people, and reward system in harmony with the Strategic Business Plan and the Strategic Improvement Plan. It is a strategic management process which harnesses the energy of all employees to contribute to the accomplishment of corporate objectives.

Organizational Alignment is the linking of strategic, cultural, processes, people, management, systems, and rewards to accomplish the best results. It occurs when strategic goals and cultural values are mutually supportive and where each part of the organization is linked and compatible with each other. In other words, an effective organization develops a tight fit between purpose, strategy, processes, structure, culture, and people, and it is the challenge for the leaders to orchestrate this alignment and to still promote innovation and change. Many organizations have failed at process redesign, total quality management (TQM), Six Sigma, and other continuous improvement efforts because they failed to recognize the impact and importance of behavioral alignment on sustained performance. They worked very hard at copying each other’s improvement programs, but they have not really changed the way people interact and view their workplace on a day-to-day basis.

The organization is made up of a complex sensory system similar to our body’s nervous system: one action in one part of the system can cause a major reaction in other systems within the organization—just as putting your hand on a hot surface causes your arm to jerk back, your brain to register pain, your heart to pump blood faster, and your vocal chords to let out a scream followed by a few choice words.

The Organizational Alignment Functional Model

The dynamic system that makes up your organization functions at its peak performance when these systems are designed to work in harmony. To accomplish this, the organization’s culture and strategies must not only be in harmony, but they must also be complementary so that they produce the optimum results. Picture the cultural makeup of the organization and the strategies as two different paths running in parallel with each other, as is shown in the Organizational Alignment Functional Model (see Figure 1.1).

FIGURE 1.1
The Organizational Alignment Functional Model.

The strategic path defines what the organization wants to accomplish down to the activities and tasks levels that the individual will need to perform. The cultural path defines how things should be done, modified by the day-to-day behavior of the management team and the experience of the employees. At the pinnacle is the organization’s mission and vision.

• Definition: Mission is the stated reason for the existence of the organization. It is usually prepared by the chief executive officer (CEO) and seldom changes, normally only when the organization decides to pursue a completely new market.
• Definition: Vision is a documented or mental description or picture of a desired future state of an organization, process, team, key business drivers (KBD), or activity.
• Definition: A Long-Term Vision Statement for the organization is usually prepared by top management and defines the desired future state of an organization 10 to 25 years in the future from the date that the statement was created.
• Definition: A Short-Term Vision Statement for the organization is usually prepared by top management and defines the desired future state of an organization 5 or 10 years in the future from the date that the statement was created.
• Definition: Value Statements are documented directives that set behavioral patterns for all employees. They are deeply engrained operating rules or guiding principles of an organization that should not be compromised. Value statements are sometimes called operating principles, guiding principles, basic beliefs, or operating rules.
• Definition: Outcomes are the measured results that the organization realized as a result of the action(s) taken.

The mission statement is essential to linking the organization with its vision of the future. Some organizations call this their “purpose statement” or the central reason why they are in business. A good mission statement defines the type of product or service the organization will provide. It is used to determine if an opportunity is in or outside of the scope of the organization. It can be worded as a “to be” or “to do” statement. Either type of mission statement can be effective, so the academics or consultants’ arguments over which one is correct are unnecessary.

What’s the difference between a vision and a mission for an organization or with the purpose of the organization? Many organizations go through an agonizing process of trying to determine the distinction based on vague definitions offered by consultants and academics. We have spent hours of valuable time discussing which comes first: the mission or vision statement. We believe that you define the type of business you are in (mission statement) and then define how you want the organization to be viewed in the future (vision statement), but doing it the other way around also works. Could it be vision and mission? Instead of trying to split the “definitional hairs,” we have found that a useful perspective can be gained by utilizing the approach of linking your organization’s internal efforts with the external world in which you compete and serve customers.

In terms of Organizational Alignment, having a compelling vision of the future of the market and the industry is one of the key implementation challenges and a vital ingredient in an organizational plan. By “vision” we mean a view of what the organization will be like 5 to 20 years from now. It could be as simple as “an affordable, easy-to-use personal computer on everyone’s desk” or “news available immediately from anywhere in the world.” The winners tend to be able to express an energizing picture of the future in terms of market presence and customer benefits and have enough reality to it to make it aggressively believable. The losers tend to lack any vision and exist, from day to day, reacting to the market and the leads of other competitors.

For example, escalating deregulation of the electric utility industry was opening up local markets to all sorts of new competition from other former regional monopolies and newly independent electric power brokers in terms of market presence and customer benefits. The Southern Company’s executives needed to reposition their huge organization for much greater competition in their traditionally regulated industry. In spite of the fact that Southern Company executives had plenty of resources to support a major transformation realignment effort, representatives from all parts of the company needed to expand their vision in order to be dramatically exposed to the reality of totally new competitors.

Winners make their mission and vision statements short, clear, and compelling, while losers will have mission and vision statements focused on shareholder value or some other noncustomer, noncompetitive emphasis.

Key Implementation Challenges

The leadership of Southern Pacific needed to impress upon employees the need for change beyond incremental extensions and refinements of the current process. Substantial effort should be directed at the unionized employees so that they understand the need for fundamental change in order to be aligned with the corporate transformation that is required.

Another example is the National Semiconductor Company. Once one of the excellent companies in the classic book In Search of Excellence, at one point in time National had only a few days of cash, its banking facility had been revoked, and it was about to write off $150 million for the second year in a row. As a result, resource deprived was this company that its leadership was forced to sell one of the organization’s most modern plants in order to generate cash to jump-start its corporate transformation process.

There was little doubt that after having incurred significant losses in four of the five previous years, the managers and employees of National Semiconductor Company (once labeled the “animals of Silicon Valley” for their prowess in pursuing a low-cost, high-volume, chip-making strategy) were ready for revitalization through corporate realignment. Everyone was eager for fundamental change, but how to do it, and with what? The primary challenges posed by the company’s initial change condition, therefore, were those of resource creation and focusing and aligning corporate energy among executives and employees for corporate “culture change” transformation.* The results of these turnarounds using alignment tools and techniques will be discussed in later chapters.

Winners embody a strong leadership emphasis in their planning, as reported in a study of almost 300 organizations in Ernst & Young’s American Competitiveness Study. This study was done in conjunction with the editors of Electronic Business. It was written by John H. Sheridan and published in Industry Week, May 21, 1990. This emphasis on being a leader is essential to both the development of strategy and to motivating the organization’s people, customers, and suppliers by focusing on being a winner and not a follower. Staying the course involves the alignment of key critical systems and critical cultural philosophies. This alignment helps produce the desired behaviors in the organization needed to produce the organization’s outcomes to achieve the mission and vision.

* The phrase “corporate culture” or “organizational culture” does not appear in James G. March’s timeless classic Handbook of Organizations (Chica...