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 Information > Strategic Planning > The Power of Alignment
Strategic Planning
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"There is only one valid definition of a business purpose:
to create a satisfied customer...It is the customer who
determines what the business is."
Peter Drucker
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Power of Alignment
Dr. George Labovitz is founder and CEO of Organizational Dynamics, Inc. (ODI) , and professor of management and organizational behavior at Boston University School of Management.
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He is co-author (with Victor Rosansky) of the book,
The Power of Alignment: How Great Companies
Stay Centered and Accomplish Extraordinary Things (John Wiley & Sons, 1997),
Dr. Lobovitz is also author of a recently published white paper, "The Power of Alignment: How the Right Tools Enhance Organizational Focus" (Business Performance Management, October 2004). This article will serve as a source of quotes in this section.
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A Definition of Alignment
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"Alignment is the essence of management."
Fred Smith, Chairman, FedEX
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An organization is aligned when:
- All staff have a shared purpose
- All staff are aware of how their contribution drives the core strategies of the organization toward the accomplishment of its purpose
- Work, processes, and actions are executed toward the accomplishment of the purpose
- Priorities become simple and clear -- efforts and resources that move toward the mission always get precedence
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"Alignment is that optimal state in which strategy, employees, customers, and key processes work in concert to propel growth and profits. Aligned organizations enjoy greater customer and employee satisfaction and produce superior returns to shareholders. Aligned companies focus employees and their work on key goals. They de-emphasize hierarchy and distribute leadership by apportioning authority, information, knowledge, and customer data. In an aligned organization, every employee – from the executive suite to the loading dock – understands not only the strategy and goals of the business, but also how his or her work contributes to them. Everyone can articulate what the needs of the customers are and what his or her unit must do to satisfy them. According to Fred Smith, the chairman of FedEX, ‘Alignment is the essence of management.’”"
Labovitz & Rosansky "The Power of Alignment" (2004)
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Vertical & Horizontal Alignment
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Vertical Alignment
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- Links Business strategy and staff (team)
- Energizes people, provides direction and offers opportunity for engagement
- Promotes the rapid deployment of business strategy:
Staff know the goals and their roles in achieving them;
Staff know the broader strategy and how their work is connected to that strategy
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Horizontal Alignment
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- Links business processes to create what the customer most values
- Links customer requirements with the way we do business (the customer get what she wants)
- Is an absolute commitment to the customer:
The customer is part of the values creating process.
- Business listens to the customer, and anticipates evolving market demands.
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"The Main Thing"
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- Labowitz & Rosansky promote organizational focus on the "main thing," a colloquial phrase that conveys a "common and unifying concept" at the center of successful businesses.
- In various presentations of the alignment model, mission, leadership & culture, and metrics are credited with maintaining organizational focus.
- Metrics allow definition and monitoring of the Key Performance Indicators of Mission. Leadership & Culture requires single-minded purpose provided by Mission and monitored by Metrics.
- Each department and each employee must understand how its efforts contribute to a defining purpose. Only then will a culture exist which supports self-correcting or self-managing alignment.
- Aligning organizational strategy, processes, people, and customers on the main thing is the management task that ensures success and prosperity.
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Alignment is supported by continuous communication, which can include such methods as "management by walking around" to get face-to-face contact with all employees (Tom Peters); regular meetings; print, intranet and Internet, and by incentives and promotions.
Employees perform best when they have a clear understanding of how their performance affects customer satisfaction and corporate success. Companies dedicated to people performance management understand the need to market to their internal audiences as much as to their customers.
There are three phases of strategic alignment
- Strategic planning: ensure the strategic direction of the company is clearly articulated and fully aligned with 'customer delight factors' - the elements most important to attracting and retaining customers. Clearly define company mission, vision, strategic plans, organizational goals and a high-level tactical plan.
- Process alignment: ensure clear definition and documentation of company core processes, fully prioritized to support company strategy. Ensure agreement and support of decision makers along the process path.
- People alignment: develop clearly-defined performance expectations for all employees. Develop staffing and development plans for all employees to ensure company strategy and supporting processes are successfully executed and achieved.
The ability to establish meaningful and profitable direction, and to determine and implement the most effective strategies to get there is a fundamental skill a successful leader must possess.
The world of work in is accelerating ever faster to keep pace with increasing demand to produce results better/ faster/ cheaper. Success is now in the hands of the flexible, adaptable and agile. The rules for strategic planning have changed dramatically. In many industries the 3 to 5 year strategic plan has become a thing of the past.
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Power
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Alignment |
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