By Guest Contributors Alan Williams and Sam Williams
Authors of The Values Economy, Alan and Sam Williams, explains what The Values Economy is and how to align your organisation to make your strategies a reality.
“No one can whistle a symphony. It takes a whole orchestra to play it.” H.E. Luccock[i]
Being able to articulate a clear strategy is one thing, but an organization’s ability to execute a strategy is an altogether different and usually more challenging matter. We know that many senior leaders agree.
Contrary to the central premise of many strategy studies, usually it is not the vision or aspirations of a successful company that allow it to stand out (and these goals are often remarkably similar, irrespective of organisation size, geography or industry sector). What sets the top performers apart is the ‘how’ – the way they organize and operate to make their aspirations a reality.
“There are few original strategies in banking. There’s only execution.” Sir John Bond[ii]
THE ANSWER IS IN THE ‘HOW’
The answer usually lies in the organization itself and in the way that everything works. However, this is often a complex challenge to deal with because of the involvement of various internal structures, frameworks, operating practices and functions or departments, sometimes with different perspectives, objectives, and priorities.
The key to success is organizational alignment and this is even more important in the new paradigm of the Values Economy, which is a double-edged sword. On the one hand, robust alignment will be recognised by all stakeholder groups and widely lauded with all the positive impact this can create, but, on the other hand, any gaps between what the organisation says it is and the way its employees make decisions and behave will be exposed with potentially fatal consequences.[iii]
“Good business leaders create a vision, articulate the vision, passionately own the vision and relentlessly drive it to completion.” Jack Welch[iv]
But alignment is rare, and nine out of ten companies fail to execute their strategic vision.[v] Ninety five percent of employees, on average, are unaware of or do not understand their company’s strategy. How do you think these companies would sound if they were an orchestra?
WHAT IS ALIGNMENT
In its simplest form, alignment means ‘functioning as a whole’.[vi] Organizational strategic alignment means lining up a business’ strategy with its culture across the organizational functions, departments, and operating units (horizontally) and from the boardroom to the frontline (vertically). To assist vertical alignment, we encourage our clients to consider any business objective from end to end, broken down into the areas of strategy, management, and delivery. In other words, what is the strategic objective, what management processes need to be put in place, and what is delivered ‘on the ground’?
The alignment approach also needs to extend externally beyond the organization, to align with its users, local communities, marketplace, and customers. The approach to alignment is a process that requires careful, detailed management to align the vision for the company with that of its leadership goals, different departments, culture, and individual employees at every step of the business planning process – from creation to execution.
“Clarity = speed” Ken Perlman[vii]
WHAT ARE THE BENEFITS?
We believe that there is a wide range of benefits which can result from organizational alignment and, naturally, some of these will be realized more than others or to a greater or lesser extent from one organization to another depending on their individual circumstances. Having said this, broadly speaking, we suggest that the benefits can be summarised under the three main topics of business performance, employee engagement and organisational agility.
In the longer term, organizations who use the SERVICEBRAND approach or a similar organizational model, are better equipped to evolve than those organizations with an over dependence on their organizational structures.
HOW TO DO IT
We find it helpful to consider organizational alignment at two levels. First, at a conceptual level, here is a simple flow for thinking about organizational alignment using the SERVICEBRAND approach:
- Clearly articulate the organization’s brand identity (this is the character and personality including purpose and values)
- Create a team of brand ambassadors (the right people in the right job so they are motivated and productive, with responsibility and accountability at an individual and team level)
- Deliver a consistent, brand aligned customer experience (irrespective of time, geography, or channel)
- Support the efforts in these areas with common operating systems and processes (e.g. cross organization communication, transparency and visibility of goals, shared technology platforms etc) and robust measurement and insight processes (quantitative and qualitative) to assess the performance in these areas.
This is not rocket science and we were interested to discover an article by Gallup which, in effect, summarises the SERVICEBRAND approach[viii] and poses some great questions:
- How much, exactly, does employee alignment contribute to business outcomes beyond customer alignment?
- What would your organization gain if it could recruit people who are already poised to deliver the core elements of your brand identity and promise when they are hired?
- In what way, if any, do aligned customers or employees serve as ambassadors of the brand?
- How does brand engagement – or the marketplace’s perceptions of a brand’s honesty, integrity, value, and irreplaceability – complement alignment?
“A bad system will defeat a good person every time.” W. Edward Deming[ix]
The second level to consider organizational alignment is the way the organization works at a practical, operational level. This is where we see the value of an organizational model which is used in addition to the organization structure. The SERVICEBRAND approach was born out of experience using several different organizational models which were all helpful in their own way but none of which seemed to offer a comprehensive solution.
By using a fit for purpose organizational model, companies can overcome the tensions and trade-offs usually embedded in their histories, capabilities, and cultures, and lead themselves to new levels of success. Sometimes, they will discover that changes in the overall strategy are required at the same time. But at the very least, they will create winning organizations that complement and enable their strategies. Apart from the effective use of the organizational model itself, a key enabler is maintaining visibility across the organization and between various initiatives to identify synergies and eliminate waste.
As for so many facets of business, being able to navigate a range of areas and achieve a desirable balance is key e.g. where people are informed but not swamped with information, focussed on what is important but open to emerging opportunities and individually accountable but motivated to contribute to the wider team goals.
“Consistent alignment of capabilities and internal processes with the customer value proposition is the core of any strategy execution.” Robert S. Kaplan[x]
Organizational alignment is simple, but not easy. It’s the exhausting work of getting every member of your organization walking in the same direction and making the right contributions at the right times to reach that destination.
While difficult to achieve, the results can be powerful. For the firms that get it right, the organization not only aligns with the strategy, but becomes a key element of the strategy. These companies find that the combination of strategy plus a complementary organizational model can lead to dramatic improvements in performance. These solutions often drive new growth opportunities by enabling and rewarding more entrepreneurial behaviour at multiple levels and, over time, by attracting and retaining more qualified and motivated individuals. Ultimately, a new organizational model becomes the one sure way to align an organization’s people to its strategy — which itself is the one sure way to drive continual improvement.
[i] Halford Edward Luccock (1885 – 1960) was a prominent American Methodist minister and professor of Homiletics at Yale Divinity School.
[ii] Sir John Reginald Hartnell Bond (born 24 July 1941) is a businessman who has served as chairman for HSBC, Vodafone and Xstrata https://www.strategy-business.com/article/14114?gko=183ff accessed 20 April 2020
[iii] https://www.prweek.com/article/1522440/oxfam-sex-scandal-wiped-400m-brand-valuation-report-reveals accesses 14 November 2019
[iv] John Francis Welch Jr. (November 19, 1935 – March 1, 2020) was an American business executive, chemical engineer, and writer. He was chairman and CEO of General Electric (GE) between 1981 and 2001. https://hbr.org/1989/09/speed-simplicity-self-confidence-an-interview-with-jack-welch accessed 20 April 2020
[v] Robert S. Kaplan and David P. Norton (2005) The Office of Strategy Management, Harvard Business Review October
[vi] Senge, P., et al. (1994) The Fifth Discipline Field Book Strategies and Tools for Building a Learning Organization. Currency Doubleday, New York.
[vii] Ken Perlman is one of today’s best-known clawhammer banjo players and an executive consultant.
[ix] William Edwards Deming (October 14, 1900 – December 20, 1993) was an American engineer, statistician, professor, author, lecturer, and management consultant.
[x] Robert Samuel Kaplan (born 1940) is an American accounting academic, and Emeritus Professor of Leadership Development at the Harvard Business School, known as co-creator, together with David P. Norton, of the Balanced Scorecard.
ABOUT THE AUTHORS
ALAN WILLIAMS coaches progressive leaders of service sector organizations, internationally and in the UK, to deliver values-driven service for sustained performance. He is a published author and speaker whose projects have delivered measurable business results across a balanced scorecard and been recognized with industry awards.
SAM WILLIAMS works across the change management life cycle to deliver people-and technology-led business change. He is passionate about identifying the need for change, mapping out the path to benefit realization, and helping organizations to move from the outlined as-is state to an improved and more mature to-be state that improves efficiency and quality. His empathetic nature and strong social skills enable him to engage with a wide range of stakeholders to understand the unique nuances within organizations that influence their readiness for or resistance to change.
The exponential rate of change and disruption in the world mean that the traditional organization-structure led approach is no longer fit for purpose. In this book, The Values Economy, the authors explain how the three primary influencers of Choice, Communication and Control have created a new paradigm that they refer to as the ‘Values Economy’. Leaders of organizations can survive and thrive in this brave new world by implementing a tried and tested, detailed methodology which can be applied in any setting.
The core principle is alignment, with a specific focus on the areas of brand identity, employee engagement and customer experience. This helps to establish a sense of shared values with all stakeholders and equips the organization with the agility needed to deliver sustained performance in a dynamic business environment where disruption is the new normal. The authors’ combined Baby Boomer and Gen Z perspective provides a compelling, irresistible blend of sharp insight, operational know how and pragmatic hopefulness, bringing the theory to life with a range of case studies from different sectors, sizes and stages of maturity.