crafting and executing strategy

FYI

FYIFOR STRATEGICEFFECTIVENESS

FOR STRATEGICEFFECTIVENESSFOR STRATEGICEFFECTIVENESS

FOR STRATEGIC EFFECTIVENESSFOR STRATEGIC EFFECTIVENESS

Robert W. Eichinger • Kim E. Ruyle • David O. Ulrich

ALIGNING PEOPLE AND OPERATIONAL PRACTICES TO STRATEGY

9 >781933 578064

ISBN 1-933578-06-8

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FYI BOOK FOR STRATEGIC ALIGNMENT

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Copyright © 2007Version 07.1a

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F O R B U S I N E S S L E A D E R SA N D S E N I O R M A N A G E M E N T

F O R B U S I N E S S L E A D E R SA N D S E N I O R M A N A G E M E N T

Creating a great strategy is easier than making it work. For the strategy to come alive, you need alignment. In FYI for Strategic Effectiveness™, you will find experience-tested and research-based ways to align strategy with tactics, capabilities, talent, and process.

Align tactics: What do you need to do to make sure the tactics and operational plans match the strategy?

Align capabilities: What do you need to be good at to make the strategy work?

Align talent: Who do you need to make the strategy work?

Align process: How do we need to do things to make the strategy work?

ALIGNING EVERYTHING TO STRATEGY: That’s what this book is about.

Differentiating strategies are based on deep knowledge of customers, competitors, and the business landscape and an understanding of what the organization is capable of doing.

Winning strategies are chosen and executed by talented, skilled, and motivated people who support and are supported by alignment.

With the tips and resources this book provides, those who are responsible for organizational change, culture management, and business process alignment will find it easier to create goal-based action plans that are essential in making strategies work.

FYI for Strategic Effectiveness™ is a companion to the STRATEGIC EFFECTIVENESS ARCHITECT™—a toolkit designed to help organizations identify and align organizational capabilities and people practices to support business strategy.

™

™™

FYIfor STrATEGIC EffECTIVENESS™

ROBERT W. EICHINGERKIM E. RUYLE

DAVID O. ULRICH

Aligning PeoPle

And oPerAtionAl PrActices

to strAtegy

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ISBN 1-933578-06-8

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Set your expectations high; find men and women whose integrity and values you respect; get their agreement on a course of action;

and give them your ultimate trust.John Akers – Former Chairman, IBM

Coming together is a beginning. Keeping together is progress. Working together is success.

Henry Ford – Founder, Ford Motor Company

the signPostIt’s not enough to create a great competitive strategy. You need alignment. Everyone needs to be aligned. People must understand and share a common view of the future. They must share commitment to the strategic goals. Everything needs to be aligned. Processes, goals, rewards, communication, policies—everything aligned. A small team pulling in the same direction will beat a larger team working at cross-purposes every time.

items 4. Continually shape the organization’s structure and work flows to meet the

changes and challenges of our marketplace

24. Apply total work systems (e.g., TQM/ISO/Six Sigma) where needed

44. Efficiently and effectively communicate our strategy to all employees

64. Align people policies, practices, and programs to support our business strategy

82. Identify the management and leadership competencies that our strategy requires

UnsKilled • Can’t craft a compelling vision • Communicates poorly • Fails to set appropriate goals • Doesn’t reward the right things • Is unable to design effective processes • Is unwilling or unable to change, to adapt • Lacks clarity in adopting policies and procedures • Does not hold people accountable

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sKilled • Communicates a clear, compelling vision • Sincerely believes in and is passionate about the strategy • provides timely and relevant information to all who need it • Sets aggressive goals that cascade down through the organization • Has a process orientation; can effectively engineer business processes • Has an eye for talent and selects the very best people for the role • Possesses clarity of purpose and focuses resources and energy appropriately • Drives the message about competitive strategy to every corner of the

organization • Rewards the behaviors that support the strategy

some cAUses • Fuzzy strategic vision • Dysfunctional culture • Lack of process discipline • Mixed messages • Poor listening • Actions don’t match message • Lacking perspective • Inattentive to details, can’t execute • Conflict avoidance • Rigid, unwilling or unable to adapt

the ten leAdershiP Architect comPetencies most AssociAted With this clUster (in order of connectedness) 51. Problem Solving

52. Process Management

50. Priority Setting

2. Dealing with Ambiguity

47. Planning

58. Strategic Agility

5. Business Acumen

46. perspective

63. Total Work Systems (e.g., TQM/ISO/Six Sigma)

65. Managing Vision and Purpose



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the mAPEven the best strategies will fail if they are not communicated and executed. Many studies have shown that it is the organizations that have a common mind-set that win more consistently. A common mind-set means everyone in the organization knows what the strategy is and knows what tactics and plans to follow. Every employee should be able to clearly explain the strategy in a couple of sentences. They should be able to explain how they contribute to the strategy. When everyone can do that, you’ll have achieved a common mind-set; you’ll have reduced friction in your processes and increased the efficiency of decision making, resource allocation, and initiatives. Once a common mind-set is established, the rest depends on clear leadership and clean execution. Alignment is the operative word. All of the things the organization does need to align with the strategy. Policies should result in aligned behaviors. Rewards should support aligned behaviors. Processes and organizational structure need to be aligned. Deployment of leaders and teams needs to be aligned with and guided by the strategy. Total alignment leads to laser-like execution. Not a second wasted. Not a penny wasted. Mission accomplished.

some remedies1. Focus. Think laser—photons in a coherent beam. They’re aligned. They’re of

one wavelength. They’re focused. Bring a laser-like focus to everything. Your processes. Your organizational structure. Policies. Procedures. Compensation and rewards. Hiring. Performance management. Succession planning. Decision making. Communication. Everything focused on achieving your competitive business strategy.

2. communicate. Communicate. Communicate. A common mind-set is created by communication and dialog. Think of it as a marketing campaign. If there was something very important for your customers to know, what would you do? Do the same with the strategy. Engage marketing professionals inside or outside the organization to create a marketing campaign complete with themes, slogans, ads, colors, and a communication strategy which includes multiple communication methods and channels. The dialog is for both understanding and ownership. Help people own the vision. Craft the message so it’s crystal clear and easily under-stood by everyone. Embrace it passionately. Then, assuming you have the right people in the right roles, it’s all about execution.

3. align with customers. Design from the outside in. Start with the delighted customer. Design the distribution and delivery chain backwards, asking what each process step should look like to result in a delighted customer. What will the product look like? The service? What’s the best way to get the order? The best way to deliver? Always think first of the customer.

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4. align leadership. Every strategy has a leadership brand that goes with it. Every strategy, given a particular industry context, location, and market, has a set of required leadership skills and competencies. A strategy that calls for speed in decision making needs speedy managers and executives. A strategy that calls for key account intimacy requires managers and executives that are good at forming lasting relationships. A strategy that calls for producing commodity products in a cost-conscious market needs leaders who are efficient managers. For each element of the strategy, consider what kind of a leader or manager will best be able to execute this element. Once you have the competencies, evaluate the current managers and executives and locate the fits and gaps. For the gaps, decide whether you will close the gap developmentally, find a better fit inside, or go outside to get the best fit.

5. align goals. Common sense, right? Your top-level business objectives must align with your strategic intent. It starts at the top and cascades down to the individual employee. Every individual contributor should have goals aligned with and in support of the team. The team goals should be aligned with and in support of the department, and so forth. From the top of the organization to the bottom, establish goals so people and groups are aligned with the strategy.

6. align measurement. Goals don’t mean much if results aren’t measured. Rigorously measure. Measure what matters to your strategy. Measurement gets people’s attention. Measure inputs. Measure outputs. Measure processes. Use the results of measurement. Analyze, act, correct, change, improve. Make measurement and improvement part of everyone’s job. Give them the tools and language and skills to measure effectively and to take corrective action for improvement.

7. align culture. Culture is the way things are done in the organization, the sum of the habitual behaviors of the individuals. How do you hire? Promote? Celebrate? Make decisions? Reward? Communicate? Every organization has a certain style that may be more or less well defined. The style influences behavior. What behaviors do you need to support your strategy? What style will promote those behaviors? Choose a style, a culture that is aligned with your strategy, then adopt policies and procedures and an organizational structure that reflect that style. Model the behaviors you want emulated throughout the organization. Put structures in place to promote that culture. If you want a culture that drives decision making down to the lowest level, you need to have policies and procedures that empower frontline workers. That needs to become the norm. Talk it. Walk it. Reward it. Culture is a powerful influencer of organizational performance. Make it work for you.

8. Give lots of feedback. Feedback is an essential component of performance. Get employees aligned by communicating, goal setting, measurement, and also by including regular feedback on their performance. Effective feedback is specific,

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direct, and delivered in a timely and genuine way by the manager or customer. Make your environment a feedback-rich environment, and supplement the feedback with coaching and mentoring to encourage and guide development in the core competencies.

9. align rewards. Goals, measurement, feedback—all are essential components of aligned performance. Those are the things that get performance kick-started. But it is meaningful rewards and consequences that sustain the performance over the long haul. Align your reward system to your strategies to reinforce the behaviors, accomplishments, and skill development that will drive competitive advantage and success. The performance picture is not complete until you’ve aligned the rewards with your strategy.

10. align with best practices. There are established and proven methods to improve business practices. Practices like Total Quality Management, Six Sigma, Lean Manufacturing, and Business Process Reengineering are all used to improve quality, productivity, timeliness, and costs associated with processes. Alignment with customers and strategy is inherently built into these practices. Consider these practices and adopt what best fits your organization. Pick something and get started.


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sUggested reAdingsAbraham, G. A. (2006). Strategic Alignment. Leadership Excellence, 23(8), 12.

Allio, M. K. (2005). A short, practical guide to implementing strategy. Journal of Business Strategy, 26(4), 12-21.

Aquila, A. J. (2005). Align compensation to your firm’s strategic goals. Accounting Today, 19(14), 9-23.

Bossidy, L., & Charan, R. (2002). Execution: The discipline of getting things done. New York, NY: Crown Business.

Bradford, R. (2002). Strategic alignment. Executive Excellence, 19(1), 8-9.

Goodstein, L. D., Nolan, T. M., & Pfeiffer, J. W. (1993). Applied strategic planning: A comprehensive guide. New York: McGraw-Hill, Inc.

Gupta, A. K. (1984). Contingency linkages between strategy and general manager characteristics: A conceptual examination. Academy of Management Review, 9, 399-412.

Gupta, A. K., & Govindarajan, V. (1984). Build, hold, harvest: Converting strategic intentions into reality. Journal of Business Strategy, 4(3), 34-47.

Kaplan, R. S., & Norton, D. P. (2001). Building a strategy-focused organization. Ivey Business Journal, 65(5), 12-19.

Kaplan, R. S., & Norton, D. P. (2006, March). How to implement a new strategy without disrupting your organization. Harvard Business Review, 84(3), 100-109.

Kerr, J. L., & Jackofsky, E. F. (1989). Aligning managers with strategies: Management development versus selection. Strategic Management Journal, 10, 157-170.

Lawler, E. (1996). From the ground up: Six principles for building the new logic corporation. San Francisco, CA: Jossey-Bass.

Steel, R. (1991). From paper to practice: Implementing the corporate strategic plan. Business Quarterly, 55(3), 119-124.

Williams, S. L. (2002). Strategic planning and organizational values: Links to alignment. Human Resource Development International, 5(2), 217-233.

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crafting and executing strategy

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