It pays to achieve organizational alignment! Sustainable organization performance is linked inexorably to it.

Leadership is essential! Alignment must start at the top and be driven throughout the organization by leaders who are committed.

Alignment is the main thing! It is all about creating a common focus and keeping it intact.

Be careful what you measure... you might just get it!

Measurement, when done correctly is not just about measuring change; it is about fostering change...

"Measures shape behavior and behavior creates culture." -George Labovitz and Victor Rosansky

"Financial measures tell the story of past events." -Robert Kaplan and David Norton

• Alignment: What's It All About?
• Measurement
  
  

Alignment: What's It All About?

Alignment, another term for Dilbert's catch phrase bingo? A fad to rally the troops and support consultants?...Is there really something to this concept? In the external environment we all function in, the winds of change seek to blow our organizations off course and at worst case, to smash them against the rocks. Internally, distractions, short term thinking, fads, conflicting goals, and an array of other forces are organizational barriers to achieving success while operating with this tempestuous environment. How can our organizations hope to survive? Alignment is the fundamental strength that allows our organizations to not only survive, but to thrive. It allows us to be prepared to handle the environment by overcoming our own host of internal organizational barriers to success.

Yes, we believe there really is something to this alignment thing. As the foundational concept of our work, we have seen it have incredible power in organizations. What exactly is alignment? The simplest way to think about alignment is to think about an automobile. Aligning an automobile is getting all four wheels aimed in the same direction - achieving the maximum efficiency and effectiveness from our wheels. In organizations, the concept itself is also very simple: organizational alignment is getting all of the elements of the organization working in harmony toward the same purpose.

Another great analogy for alignment is sailing:

The Purpose - it's sailing. This is your organizations core for existing. Values serve as an anchor or compass keeping the organization grounded in why it exists and what is truly important. The mission exists to guide what the organization does. These combined are the organization's core purpose. This core purpose must be not only espoused but also enacted. It must be clearly communicated and supported by the organization. Your core purpose should be evident in your organization's culture; how things get done and what it is like to be a member of your organization. Everything you do should be evaluated against this and no venture should be undertaken if it is not in alignment with the organization's core purpose.

Why does your organization exist? Using the sailing analogy, let's say you value speed, accuracy, and victory. You sail to compete and win. This core purpose dictates your daily activities and what it is like to be a member of your "crew." What is the purpose of our organization? Do our people believe in this purpose?

The Destination - otherwise known as the vision and strategic direction of the organization. Where is your organization going? You can't get everything and everyone going in the same direction without a direction! Getting a horizon firmly and clearly established requires a very clear understanding of your customers, your competition the external environment and your own organization. Where are you going and how are you going to get there? If your purpose in sailing is to win, your strategy will be quite different than if you sail to relax and get a tan. Where you choose to sail and your destinations will be different as well.

Does your organization have a clear, shared understanding of its strategic direction? Service Master Corporation has been touted for its ability to withstand the ebbs and flows of the external environment. CEO and Chairman Pollard says,

     "The objectives of our firm are not just carved in stone on the lobby wall. 
      You can see them working every day in the lives of our people."

Can you say the same about your corporation?

The Boat - using the sailing analogy, the way you get from here to there. What will get you there? Your systems must support the achievement of your goals. An emphasis on efficient, effective, robust systems is essential to your success. Like navigation, steering, sails and boat structure in the sailing analogy, your organization's systems for sales, training, production, inventory, etc., all need to be aligned with your purpose and your strategic direction. These systems will be the drivers in achieving your goal.

Do your systems foster goal attainment? What are the key systems that we must optimize in order to achieve our goals?

The Crew - those who are involved in reaching your organizational goals. This is where we focus our efforts! Individuals are most often left out. Developing and fostering the commitment of your people to the organization's purpose and goals is so obvious, and yet so poorly done by many organizations. How are the knowledge and skills of your crew aligned for the achievement of your organization's vision and strategy? Do they know how their work contributes to the achievement of the strategy? If you want to see a great example of alignment, watch the America's Cup. Every crew member on every sailboat works feverishly and with absolute precision to achieve the short and long term goals of the vessel. Each tack is a precise concert of supporting members linked to the systems in which they operate, true to the organization itself, and designed to help achieve the goal. Each crew is made up of people with the rights skills, knowledge, attitudes and motivation. They are linked and they are aligned. Recognizing the value of your employees and unleashing their expertise may be your key to gaining a competitive advantage in the marketplace. Ask yourself, "Are our people aligned with the direction of the organization's goals?"

Get your crew on board and unleash the results of alignment!
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Measurement

Imagine yourself being transported to the emergency room of your local hospital. Your survival is dependent upon the ability of the physicians to determine and treat your ailment. Understanding that body temperature is a very important indicator of health, the doctors set out to measure and chart your body temperature. They measure it from a variety of parts of your body and track it using several different tracking tools. You know all the ways and places that indicate correct body temperature. They control it with the tools designed specifically to control temperature. Malpractice! Businesses have measured their own health in a similar manner for generations. Tracking one set of measures with extreme care from multiple vantage points and with meticulous attention, charting and reporting only financial measures. In today's business world, many have realized the importance of balanced measures that truly reflect sustainable organization performance.

What is the problem with financial measures? Nothing really. Like temperature, financial measures are just inadequate when they are used alone. Lagging indicators, such as ROI or Earnings/share, fail to reveal the value or destruction that has occurred during the most recent accounting period. The reduction of costs or elimination of departments and people can bolster the financial picture quickly, even if the reduction does in practice cannibalize the organization. Malpractice! This article will lay out for your organization the keys to measuring progress, so that you can avoid committing business malpractice.

1. The first premise of measurement is understanding what is being measured.
    According to our model of alignment, organizations must measure progress
    towards achieving the vision. Your measures must be built to support the
    attainment of the organization's strategic goals. Every person in the
    organization should understand where the organization is going.
    Build a shared vision!

2. Secondly, create balanced indicators of progress. Measures should be both
    financial and non-financial. They should reflect the optimization of systems,
    customer satisfaction (both internal and external), the acquisition of
    knowledge and skills among your employees, and the financial health of
    the business. The measures must have balance between communicating what
    is happening in your organization and what is happening in the competitive
    environment. Your measures must give real-time indications of performance.
    These leading measures will drive the operations of your business. Decisions
    can be made with data that reflects the whole picture of organization
    performance. Just a quick warning: Be careful what you measure, because
    measures drive behavior. The right measures will do more than indicate your
    organizations performance; they will facilitate alignment!

3. The third point is to be sure that everyone understands their link to the
    measures and how the measures support the goals. Using a tree, show how
    each individual in the organization is linked to the success like the roots.
    Allow people to connect to goals and drive the performance of the business.
    This is the process of alignment. People link themselves to the performance
    of the organization. The result is not only better performance, but increased
    job satisfaction and employee retention, especially if you commit to
    implementing our next point. People are the key!

4. Create reward and reinforcement systems to support attainment of the goal.
    Human performance systems are powerful forces for change. Individuals will
    avoid what they perceive as negative consequences. However, individuals seek
    to receive what they perceive as positive. This is the fundamental nature of
    motivation and a key to success. Link everyone to the goals, link systems to
    goals, and link people to systems. And, of course, celebrate success!

5. In the act of cannibalizing organizations, many business leaders have cut
    training. There is no doubt that some training is wasteful and fad driven.
    Training that is linked to individual and organizational performance, however, is
    a good investment. The elimination of training departments and a shift to
    unstructured on the job training will never benefit an organization. Your people
    will achieve your vision, but they need the right skills to do so. Train
    judiciously, train for financial returns, but definitely train!

6. Create a culture of excellence by holding people accountable for performance.
    Allow people to develop and grow, while holding standards high. Make clear
    what is expected of people, how they can learn, whom they can learn from,
    etc. Utilize resources to determine individual competencies, hire to
    competency and train to competency. Your organization will be characterized
    by excellent people with excellent skills. Who can argue with excellence?

Build your organization toward the vision. Align systems and people with the needs of your customers and select critical measures at the organization, systems, people, and customer levels. Use the measures to align your organization. Train your people, link them to the goals, hold them accountable, and enjoy the journey!

A business scorecard is a fundamental business tool, not a flavor of the month. If the measures are well-constructed, the scorecard can do the following:

Navigating an organization requires understanding of its financial goals, the customers served, the processes which lead to the goals, and the people who perform the processes. It also requires a clear means of receiving information about each of those areas. When goals, systems and people are all in alignment, organizations can more quickly and effectively improve overall performance and achieve bottom-line results.

High performing businesses align their people, systems, and organization around their vision, mission, and strategy. The Scorecard is a means of doing just that.
At Integral Consulting Group, we have adapted our own more comprehensive scorecard called the IP Scorecard.

INTEGRAL CONSULTING GROUP - IP SCORECARD

Broad-base Area	Sub Sets	Example Measures
Organization	1. Financial 2. Non-Financial	1. ROI, ROCE,         Earnings/Share,     ROE, Sales 2. Market Share, # of     New Markets, Brand     Recognition
Customer	1. External 2. Internal	1. Retention, Account     Growth, Customer     Satisfaction, % of     Customer $  2. Employee Satisfaction,     Employee Retention,     Internal Customer     Satisfaction
Systems		Time to Market, Cycle Time, Hiring Process, Scrap, Systems Integration, New Product Introduction, Quality
People	1. Learning     - Knowledge     - Expertise 2. Growth	1. Competency Assessment,     Certification Processes,     Training Evaluation 2. Individual Productivity,     Training, Internal Hires vs.     External Hires,     Development Planning

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