Why Alignment Is Essential to Effective Performance and Profitability

• The leadership—responsible for developing and deploying the strategy and monitoring results
• The organization—the structure, processes, and operations by which the strategy is deployed
• The jobs—the necessary roles and responsibilities
• The people—the experience, skills, and competencies needed to execute the strategy

Adaptability and Perspective Are Essential

What is essential for success in the “high performance organization” is an understanding of the interdependencies and the ability to adapt quickly and strategically to change. When these four elements are in sync (i.e., aligned—when it all looks so “easy”—the likelihood for outstanding performance is increased.

A hallmark of an organization that aligns well is the ability to adapt and realign when there is a change. For example, a new technology introduction could change a business process. A change in the process could change job responsibilities and skill requirements. Therefore, the leadership must realign the organization not only at a process level, but at both job, people and skill levels as well.

Take the economic downturn in the past 24 months. Some organizations hunkered down, choosing to cut all nonessential spending as a way to at least maintain a current profitability. Others, however, have used this time to reevaluate the way in which they do business to increase their overall efficiencies, and improve both performance and profitability. Take, for example, a civil engineering firm closely tied to the home construction business. Rather than slashing their professional staff with the loss of revenue, leadership engaged the workforce in lean initiatives to reduce waste, customer-focused activities to improve the relationships, and new business opportunities to increase their visibility. These three initiatives when coupled have potential impact on both top and bottom line results. In essence, this organization aligned the four elements to the economic situation.

Many organizations, however, fall victim to some common alignment-performance pitfalls, particularly in periods of high stress or rapid change.


Major Alignment-Performance Pitfalls

1. Developing the strategy and throwing it over the wall for implementation. There is too often a tendency to think that once the strategy is developed the only requirement for implementation is one of communication. Implementation is the “real work”—the continuous alignment and monitoring of the four key business elements.

2. Heads-down focus. Performance at an individual level is based on executing a series of critical tasks. However, without the bigger picture—a more strategic perspective—it is difficult, if not impossible, to understand how what you do impacts other elements in the system. A heads-down perspective also limits the extent to which an individual will offer to improve a process since there is little appreciation beyond “just doing my job.”

3. Blaming the hired help. It is easy to blame people for poor execution. After all, they are the ones doing the work. Sometimes there are clear situations in which an individual is not a fit for the job or in which individuals need more training and development to be effective. However, what about situations when you have dedicated, hardworking people working with inefficient, bloated, or cumbersome processes? This is a process problem, not a people problem. Or, what is the root cause when three individuals are responsible for the same task or balls are dropped because it is not clear who is responsible for what? This is a job definition issue, not a people issue.

4. Perpetuating the silo perspective. All too often leadership teams at both functional and business levels tend to represent their own interests as opposed to those of the larger organization. In high performance organizations, the role of the leadership team is clearly defined along with clear accountabilities for overall execution and profitability, not just each person’s piece.

5. Micromanagement. When the spotlight is on improving performance, too many managers move in to “tell” how. Perhaps these managers’ hearts are in the right place— they want to make sure that things are done correctly—but their tendency is to direct as opposed to engage others. This is a great way to (a) encourage people to withhold effort or take the slightest risk to solve problems or improve performance on their own and (b) build resentment among the staff, particularly the best and brightest who will flee when they find a “better” opportunity.

6. Ill-defined roles and responsibilities. The lack of clearly defined roles and responsibilities is often a major obstacle to profitable performance. This is particularly true when there are major organizational changes. Letting people figure this out for themselves can be counter-productive and is too important to leave to chance.


Recommendations

Want to improve profitable performance? Here are some things to consider:

• Communicate and engage. Alignment is the bridge between strategy and execution, and communication is the mechanism by which alignment takes place. Communicate about the strategy. Communicate about changes and their potential impact on the elements of the organization. Engage employees in a discussion of their responsibilities, critical tasks, and priorities. When there are changes, engage employees in a dialogue. You cannot over-communicate in these situations.
• Sharpen the organization’s capability to listen, observe, learn, and act. Seek input and recommendations from everyone in terms of what they see with customers, processes, and inefficiencies. Think of this as the equivalent for what professional teams do when it comes to watching the films of their last game. They chart a course of action and execute it.
• Look up and out as well as down. A strategic perspective is critical to improving performance and impacting profitability. Encourage people to think “how” and “why” as well as “what” when it comes to performance.

By staying away from the pitfalls and focusing on these recommendations, an organization can increase its alignment and therefore its performance and ultimately its profitability