What is Organizational Alignment? - Three Critical Elements

What is Organizational Alignment?— Three Critical Elements

For us, organizational alignment means getting every department and employee headed in roughly the same direction, concentrating their power. Peter Senge says the difference between focused and unfocused organizational power is the difference between a light bulb, which throws out scattered light, and a laser, where light is so concentrated that it can cut through steel. [1] Organizational alignment offers that kind of focused power for companies and their most critical customers.

Every minute account managers spend making up for an unaligned organization is a minute that could be used to uncover new opportunities for mutual value.

We can cite a near-universal example of diffuse versus concentrated power in strategic account management. In almost every firm, account managers hand off tasks to other departments. What happens after that hand-off differentiates between the aligned/focused and the unaligned/unfocused organizations. If, perhaps through bitter experience, the strategic account manager doubts that the employee accepting the handoff really understands the task's urgency, she is forced to either follow that individual around or call periodically to make sure that the job gets done. This is not a value-added task for the strategic account manager, except to the extent that it ensures the task gets completed. Compare that to a firm such as Marriott International, whose story appears below, in which virtually all employees stand ready—as a "volunteer army"—to assist strategic accounts. Here the account manager hands off the task to the account team and moves on to his next task, secure that the job will get done. Every minute account managers spend making up for an unaligned organization is a minute that could be used to uncover new opportunities for mutual value. The true costs of the unaligned firm are the lost opportunity costs that keep the firm from realizing its true bottom-line potential.

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  1. A common vision and set of values.

  2. Systematic and ongoing communication of that vision and values.

  3. Structural changes.

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Figure 3-1: Three Elements of Organizational Alignment

1. A Common Vision and Set of Values

The first element of alignment is a common vision or picture of where the company and the strategic account group are headed. This picture not only keeps the end state in mind but it also helps employees determine their priorities and make good decisions in ambiguous times. It helps provide the rationale for why groups need to work together and it focuses people on the big picture so they can find common ground. The values guide employees to achieve the vision.

This picture/vision is often most effectively generated by a multilevel cross-functional leadership group, using objective market and customer data. Because the group will articulate the vision in words, it is important to let them wrestle with a common understanding of what the words mean. This requires more than talking. It requires a skillful dialog between people and departments that will lead to the understanding and commitment that organizational alignment requires. Honeywell Industrial Automation & Control people, for example, believe their success is driven by their mission, which in 1999 was "to create value through a world-class, relationship-centric strategic approach that complements Honeywell's technology leadership and differentiates its value from that of its competition."

2. Systematic and Ongoing Communication of That Vision and Values

The second component of alignment is systematic and ongoing communication—both from the customer and deep within the organization. This communication should reinforce why the firm has chosen to move toward its vision. As noted in the Introduction and Chapter 1, this directional focus is quite different from the multiple and internal focuses that dominate many firms. Objective customer data—gathered in many ways—allows the vision to complement the marketing strategy. Successful leaders and their companies, such as Bob Edwards of Minnesota Power, invest enormous time and resources ensuring the quality and effectiveness of the communications process. Skillful leaders repeat key messages to help focus all employees on the vision and the near-term goals to achieve it.

Communication processes that pull (not push) the vision throughout the organization provide a way to introduce and reinforce the vision, to detail the responsibilities the vision creates, and to present how well people are performing in those responsibilities. Such processes do not magically appear. They must be carefully crafted and used if the vision is going to stay in the forefront of employees' efforts. A firm seeking to align itself needs to develop systematic communication plans and processes to make key messages travel to all departments and levels of an organization.

3. Structural Changes

Traditionally, firms tend to define alignment primarily as a structural issue: restructuring reporting relationships. Our experience, however, has been that restructuring without a clear vision and strong communication support will be a wasted effort. Some firms then focus on redesigning those processes serving internal and external customers. Process redesign and organizational restructuring are certainly major parts of alignment. Our experience, however, has been that unless the restructuring follows the agreed-upon vision, restructuring for alignment tends to fail.

We have seen well-intentioned companies allocate large budgets for setting up and staffing a strategic management function and then have no money left for planning, support, training, or internal marketing. They believed that creating the department would be enough. Because strategic account management is a very different way of working with customers, though, these programs often fail through lack of support.

The goal of strategic account management is to work smarter, not harder.

The goal of strategic account management is to work smarter, not harder. Without a vision, departments and their employees will continue to follow their own directions. Without systematic communication processes that promote the voice of the customer and the goals of the organization, developing that vision can easily turn into an academic exercise. Without work process redesign/reengineering, employees might know of the vision but will not move toward achieving it in the most effective way. In our experience, firms cannot work smarter unless all three of these elements are addressed simultaneously.

[1]Senge, Peter (1990). The Fifth Discipline: the Art & Practice of the Learning Organization (p.234). New York: Currency Books.

The Seven Keys to Managing Strategic Accounts
The Seven Keys to Managing Strategic Accounts
ISBN: 0071417524
EAN: 2147483647
Year: 2003
Pages: 112

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