I was excited to read this book by my friend and colleague Rick Lochner of RPC Leadership Associates. Rick is an accomplished leadership development expert, executive coach, and business consultant, and has been a Visiting Professor at the Keller Graduate School of Management of DeVry University for over ten years.
Rick artfully examines three areas that are critical to a company’s success: 1) Strategic Thinking, 2) Operational Support Elements, and 3) Tactical Execution. The “secret sauce,” a.k.a., The Missing Piece, is the interrelationships of these areas and their various pieces, and the alignment that must exist between them. As Rick writes, “It is through aligning the multiple moving parts of the business where Visions are realized, where Strategies are fulfilled and Goals achieve Desired Results.”
Rick defines business alignment as the process of matching the organization’s tactics to the available or readily acquirable resources to achieve its strategic objectives. Strategic Thinking is the part of the alignment process which outlines the direction and purpose of the organization. Operational Support Elements are necessary to successfully bridge the Strategic Thinking process and effective Tactical Execution. Execution leads to achieving desired organizational results.
His Business Alignment Model is structured in four stages:
Stage 1
Success begins with a Purpose, typically defined by Vision and Mission statements, and often with stated Values. The first stage of alignment is creating and sharing a Vision for the organization. “A Vision is a short statement declaring what the organization aspires to become and achieve” in the future, often three to five years. A clear Vision Statement is a powerful tool to help leaders navigate change by creating a picture of the world on the other side of the change.
A Mission Statement provides the next level of business alignment. It creates tangible ideas and directives aligned to the Vision for the nearer term, often the next two to three years. The Mission identifies areas the organization will focus on to work towards their stated Vision. To identify these areas, tools such as the External Environment Assessment (which looks at factors like the economy, technology trends, legislation and policies, and sociocultural and global influences) and SWOT Analysis (which examines a company’s strengths, weaknesses, opportunities and threats) are very helpful.
Creating Vision and Mission Statements should not merely be an administrative exercise, but a process to validate the reason the business exists. Rick writes that organizations that have a clearly aligned Vision and Mission “have a much better grasp of their purpose and are much better prepared to create a Strategy to compete in a very dynamic business environment.”
Stage 2
Achieving the next stage of the Model requires aligning the organization’s Strategy with the Vision and Mission. Strategy is a reflection of how organizations compete in the markets and industries in which they are engaged. It guides them to operate in ways that help them gain a sustainable advantage over their competitors. Understanding elements such as a company’s strengths and weaknesses as well as its core competencies, will enable the development of a Strategy that fully addresses how it will compete.
Many organizations want to create a new Strategy and immediately create goals and action plans to execute the Strategy. But Rick argues that this approach is flawed because an aspect often under-appreciated or completely missing from the business alignment process is Operational Support, which he divides into Structure (people, process, and technology) and Compensation (monetary and non-monetary).
Frequently, organizations want to change the Strategy without assessing whether it has the right people to execute the strategy, the right core processes to leverage the right people and the right technology support to optimize the core processes. Not assessing these crucial “enablers” of change results in skipping critical pieces of the alignment process by going directly from Strategy to Goals.
Often organizations state “We have great people here;” but it is not really a question of having great people as much as it is having the right great people. Every employee must be assessed regarding their capability (skills and knowledge) to execute their roles and their compatibility with the culture and values of the organization, with respect to both current and future needs. The book then discusses the appropriate actions to take based on the results of these employee assessments.
The next element in the Structural alignment is Process, which follows People in the Model so that companies can create processes that leverage the strengths of the employees rather than trying to leverage the wrong people into existing processes. Said another way: “Poor processes will ruin good people; Good processes magnify good people.”
Alignment in this stage starts with identifying the organization’s core processes, which typically relate to inbound logistics/taking orders, operations/manufacturing product, outbound logistics/delivering product, marketing and sales, and service/maintaining the customer.
Compensation and Rewards are critical to the alignment process because they influence the behaviors crucial to success in any organization. All too often, organizations rely heavily on two common externally applied motivators: rewards and fear. However, a third motivator, attitude is recognized as the only true long-term motivator. Rewards and motivators should address factors that promote job satisfaction as well as factors that eliminate job dissatisfaction.
Stage 3
Achieving Stage 3 alignment begins with Goals and their roles in executing the Strategy. Setting Goals and achieving Desired Results is crucial to a leader’s success. The goal planning process defines key steps to ensure goals are set in place and effectively executed. Many leaders are good at goal setting; however the challenge becomes the associated execution of the goals to achieve the desired results. To help, 1) establish the relative importance of each goal by understanding the rewards of accomplishing the goal and the consequences of not accomplishing it; 2) understand the potential obstacles to achieving desired results before embarking on the goal; 3) engage the right people in the organization; 4) set realistic but challenging time frames and due dates; and 5) ensure that proper metrics and methods are in place to measure progress.
Stage 4
All of the previous stages lead to Stage 4 Alignment which is Achieving Desired Results; where effective communication, leadership and organizational culture all play a role. But it’s never about just achieving results; it is about achieving the results that matter to the organization and allow it to compete effectively in the short-term and realize its Vision in the long-term. A laser-like focus on desired results is a must, with active engagement in the process by everyone in the organization. As the ongoing review of progress and results occurs, a “call to action” must follow to close the gaps identified.
Rick urges that achieving Stage 4 business alignment is not the end of the road, but the beginning of sustainable success, similar to Dr. W. Edwards Deming’s Plan-Do-Check-Act Cycle. All elements of the business alignment must always be checked and rechecked for optimal performance. Rick writes that “Leading an organization to the point where it achieves desired results against a stated strategy is good. Doing it repeatedly is greatness!”
Thanks Rick for a relevant, useful book that is well-constructed and enjoyable to read.
“The art of progress is to manage order amid change and to manage change amid order.”
~ Alfred North Whitehead