What Should You Change?

Organizational Alignment: The key to excellence and effectiveness

Many CEOs perceive organization alignment as a tough, daunting challenge, and it can be if the process is not well defined and accepted by everyone in the organization. What is organization alignment? It’s a state in which every person in the organization has a clear and agreed-upon understanding of his role in delivering the organization’s strategy. It’s obtained through a process of numerous (and often heated) discussions leading to consensus on what results each team in the organization and each member of each team is accountable to deliver in support of the overall strategy.

There are two types of alignment – horizontal and vertical. Horizontal alignment refers to the resolution of all role overlaps within the team and between teams so that waste and conflict are minimized. Vertical alignment refers to the sufficiency of output through all the parts of the organization so that the results that need to be produced are accounted for within the organization (i.e. nothing falls between the cracks).

Organization alignment starts with the leadership team having clarity and agreement on the top-level outputs of the organization. We call these effectiveness areas. They describe the important results the organization must deliver to achieve their long-term strategies. To make these results tangible and manageable, key success metrics must be developed for each one and there must be agreement amongst all members of the team that these are the collective success indicators for the organization.

The next step in the alignment process is that each member of the team must reach agreement with all other members of the team on his individual effectiveness areas and success measures which again must align both horizontally and vertically with the team overall.

To fully align the organization, this process is repeated in a cascading fashion throughout the organization. This will ensure your people at all levels are doing the right things for the right reasons and that your teams are reaching their maximum potential. We’ve spoken of the alignment of results which is an extremely important aspect of alignment, but effective organization alignment encompasses a broader scope:

• alignment of activities in support of results,
• alignment of decision-making authorities,
• alignment of process accountabilities, and
• even alignment of the team leaders’ roles with the needs of their respective teams.

In other words, effective organization alignment is a broad set of concepts and processes that need to be approached systematically and with discipline, and continuously maintained and adjusted as situations evolve and new opportunities arise.

With effective organization alignment, employees are committed to the CEO’s vision and direction. They understand the strategy, understand their roles within the overall plan and are dedicated to getting it done. Each team also understands the impact of its efforts on the organization and the customer. The net result is that the whole organization becomes stronger and more effective than the sum of its parts; the whole company is working on the right things at the right time.

 Eight types of change objectives

1. Structural objectives deal with reorganization. This might be moving power around by clarifying roles or simply reorganizing.
2. Effectiveness objectives deal with outputs of individuals or the organization. This might relate to improved corporate strategy or, very broadly, to improved organizational effectiveness.
3. Decision-making objectives are critical in any firm. Should decision-making be more centralized or more decentralized; should power be moved?
4. Interface objectives deal with relationships between organization parts. The most obvious one is between production and marketing, which sometimes do not cooperate as much as they might.
5. Communication objectives must have everyone’s agreement not only that it needs to be improved but also exactly what that means.
6. Flexibility objectives deal with changes in power and resources of members of the top team and with overcoming the resistance of managers.
7. Individual objectives relate generally to personal or interpersonal needs, such as job satisfaction and improved candor.
8. Style objectives deal with the choice of managerial and organizational style. Should the organization have a bureaucratic, separated kind of style, or should the organization be a more dedicated, production-oriented type?

The five structural change objectives

1. Clarify roles: Define authority and, therefore, responsibility.
2. Reorganize: Essentially, move the various positions around somehow.
3. Flatten pyramid: Increase the span of control and thus remove one or more layers of management.
4. Add Layer of management: This objective is often necessary when a company has grown by acquisition and the CEO finds 20 units reporting directly to the position. Clearly, there is a need for an assistant-CEO level.
5. Remove layer of management: As organizations grow, layers of management are often added quite unconsciously. Removing a layer of management does not apply simply to CEO and assistant CEO; it can apply equally well to supervisor and assistant supervisor.

The five effectiveness change objectives

1. Improve organizational effectiveness: This broad objective can easily be measured by lower costs or improved service to clients.
2. Improve managerial effectiveness: Sometimes the change should be based on the individual manager rather than the organization as a whole.
3. Improve profit planning: If the organization is well structured and the managers reasonably motivated, the problem may be that they do not have a good planning cycle and that they do not have sharp pencils or spend time planning.
4. Introduce or improve management by objectives (EMBO): This objective requires a well-planned introduction or a regeneration of an MBO that did not work as well as was expected.
5. Improve corporate strategy: Ask the fundamental question: what business are we in? This is more than sales plans for one or two years.

The five decision-making change objectives

1. Improve teamwork: Make more decisions on a group basis and emphasize the quality of the decision and the team commitment to it. This means more than improving relationships orientation.
2. Introduce participative management: This objective is problematic because some people think it means lower levels getting more involved in their work directly, while others think it means lower levels getting involved more in the senior levels of work.
3. Move decision-making downward: Many organizations talk about the desirability of doing this, but use such general terms as “decentralize”, “participation”, and “delegation”. However, “move decision making downward” is probably better than all of these because it states quite clearly what is intended.
4. Centralize: This broad objective can be made specific by the measurement methods attached to it. One can centralize some things, while leaving many other things not centralized.
5. Improve problem-solving climate: Improve the quality of decisions and the commitment to them solely by using more group methods and a greater degree of candor.

The five interface-change objectives

1. Optimize the system: Organizations consist of units, or positions and aggregates of positions. Sometimes the units do not connect well with each other. In short, the interfaces do not run. Optimizing the system means getting the organization to work as a whole rather than getting the individual units or positions to improve their own effectiveness alone.
2. Improve horizontal communication: The most important communication problems can be horizontal, rather than the more commonly perceived vertical ones.
3. Improve inter-functional cooperation: There may be some specific functions, often production or marketing, that do not cooperate as well as they might.
4. Improve HQ-field relationships: Sometimes level A does not work well with level B.
5. Facilitate a merger: Address not only the financial problems but also the human ones. Often a merger results in a combined balance sheet but no real combination of effort. 

The five communication change objectives

1. Improve upward communication: Sometimes those at the top are not listening enough to those at the bottom.
2. Improve downward communication: Some senior managers think that this is always the problem.
3. Increase output of new ideas: Essentially, this is creativity, but it leads to better measurement methods than the term creativity
4. Increase use of new ideas: Many organizations have a very high output of new ideas, but for one reason or another they do not seem to be able to apply them. In that case this objective would be better than increasing the number of ideas; it would be much better to use the ones they have already.
5. Create greater autonomy: This means less inter-unit communication. Sometimes organizations are composed of parts that should not be together. Then great effort is spent on making the parts all work together, when in fact a different organizational structure should be created.

The five flexibility change objectives

1. Improve organizational flexibility: Make the organization respond better to external forces such as competition, government legislation, or new technology. Some organizations grow old too soon. They lose their power to adapt.
2. Improve manager flexibility: In some organizations particularly at middle management level, managers tend to increase their resistance and lower their flexibility. Top management wants to introduce a change but finds it is resisted. The easiest way to unfreeze middle managers is to send them to a one-week seminar.
3. Revitalize management: Get managers to rethink what they are doing.
4. Improve marketing orientation: Get the organization to think more of the market than of their own production system.
5. Facilitate system introduction: It is quite common for a new budgeting system, a new management information system, or a new computer system to be introduced with little thought of the human side.

The five individual change objectives

1. Improve climate: Each organization has a climate, or culture. It amounts to “the way we do things around here”.
2. Improve candor: In some organizations people do not talk to other people about the right things often enough.
3. Improve job satisfaction: Arrange the situation so the individual whistles on the way to work rather than on the way home.
4. Serve individual needs: Some organizations want to do a better job of integrating the needs of the individual with the needs of the organization. Sometimes this is very difficult, but sometimes it can be done.
5. Increase individual autonomy: This can relate to such things as job enrichment. In essence it means letting the individual get on with it without being told as much as before.

The five style change objectives

1. Increase separated managing: Increase emphasis on systems orientation and procedures.
2. Increase related managing: Increase emphasis on people.
3. Increase dedicated managing: Increase emphasis on getting the work done with reference to cost and quality.
4. Increase integrated managing: Increase emphasis on both people and work.
5. Increase matrix managing: Increase emphasis on designing the organization around project teams rather than around strict functional areas.

 Characteristics of the Results-Focused Organization

 There are seven characteristics of the output?oriented organization, which we consider:

1. An organization output statement.
2. An organization design, which will achieve the organization, output objectives.
3. A clear understanding by all managers of the meaning of outputs and effectiveness.
4. Integration of key systems with the concept of outputs.
5. Linking of organization, unit and manager outputs.
6. A flexible response to achieve outputs.
7. Creation of one’s own approach to outputs, not copying those of others.

Also, Please inquire about our recent book: "The Results-Focused Organization"

feel free to inquire at [email protected]

Excerpted from my upcoming book: "The Field-Guide for Supervisors and Managers" - I can be reached at [email protected], Web= sdwnet.com