The Alignment Factor, Leveraging Total Stakeholder

Support, Routlege, 2012

Prof.dr Cees B.M. van Riel RSM/Erasmus University Rotterdam

Alignment:

“A mutual rewarding relationship between a company

and its key stakeholders, which enables the firm to

meet its objectives and realize its purpose.”

This book focuses on internal and external alignment

Key Points Illustrated in THE ALIGNMENT FACTOR

• 1 Alignment is the process of building and maintaining a mutually rewarding

relationship (MRR) with stakeholders, resulting in a better reputation as a stepping stone

in increasing (financial) performance: 10% increase in employee alignment, evokes, 2%

higher financial performance!

• 2 This implies a shift in attitude for most companies, respecting the necessity to balance

its own interests with the demands of stakeholders that they depend upon

• 3 Getting employees aligned and involved around strategy implies implementing four

managerial efforts:

• Gather relevant intelligence before launching the strategy

• Reveal support and/or resistance among key stakeholders

• Implement the strategy by balancing hard and soft wired intitiatives, incl. communications

• Track progress by KPI’s assessing progress in building MRR with key stakeholders

Phase I:

Know Before You Go

Phase II:

Revealing

Support & Resistance

Phase III:

Action Plan

Phase IV:

Tracking Progress

Alignment with what?

Who needs to be aligned?

Desired behavior?

Benefits employees?

Phase I:

Know Before You Go

Phase II:

Revealing

Support & Resistance

Phase III:

Action Plan

Tracking progress in

supportive employee

behavior

Inventory of bottlenecks

and opportunities in

achieving aligned

behavior

Phase IV:

Tracking Progress

Tracking progress in

supportive employee

behavior

Introducing KPIs targets

Increase performance

Bu

ildin

g

alig

ned

Org

an

iza

tio

n

Linking Alignment KPI’s to

performance

Hard wired and soft wired

initiatives

Communication support

Alignment with what?

• What is the core of the corporate strategy?

• Which four building blocks matter most?

• For Telefonica this implies:

Who needs to be aligned?

• Who has to be aligned first? Everybody? Only the Top? One division

specifically?

• To be determined based on nature business problem: which employees

matter most in solving the business challenge?

What is the desired behavior?

Firm Perspective and Employee Perspective

The purple promise

“I will make every FedEx experience outstanding”

What does FedEx want couriers to do? • What does the Access strategy mean for them?

• Making every FedEx experience outstanding

• How many packages a day?

• 10 instead of 12 if you have to spent

extra time justified by service

• What is acceptable when delivering extra service?

• Explaining mistakes, solving problems caused

by the firm, etc.

• What is not acceptable?

• Reducing the amount of deliveries and still

not providing added value in service

What drives a courier?

• I receive respect for what I am doing

from my firm

• Customers love FedEx and that

increases respect for me too

• I have career opportunties within

FedEx if I encourage customer

satisfaction

Desired behavior at a Utility company?

A non-aligned mechanic:

- Considers sustainability to be just

another catch phrase

- Is not willing to take any extra

training

- Continuous working based on

demanded output by his manager

(e.g. number of customer visits per

day)

An aligned mechanic

- Believes in the Sustainability

strategy

- Acknowledges that (s)he needs

training to keep up-to-date with the

latest technologies and ensures

his/her own future by doing so

- Explains sustainable energy to

customers

- Is motivated by customer

satisfaction

• What are employees supposed to do? Be specific as a firm.

• Plus, do take into consideration what will be beneficial for the employee.

• The more you stress the added value of the new strategy for the

employee in internal messaging, the more aligned they will be.

Step 1: Know Before You Go

Alignment with what?

Alignment with whom?

How to assess desired

behavior?

20% has a negative

perception of the strategy,

they will never support the

strategy

10% has a positive

perception of the strategy,

they fully support the

strategy

70% is indecisive whether

to support the strategy,

they need to be persuaded

Step 2 Revealing Support & Resistance

In general…. employees will show three types of

reactions towards a new strategy….

….. however, you have to know who is in which group?

So, measure the facts by using the RepTrak™ Alignment Monitor

- Intranet-based survey among a

stratified sample in the firm.

- Aimed at (1) revealing the degree of

employee support for the strategy.

- Aimed at (2) showcasing what works

and what doesn’t work regarding

informing, motivating and capability

development.

1

2

3

Time

Alig

nm

ent

Launching the

Strategy

Implementing

Hard tools

Implementing

Soft tools

Step 3: ACTION PLAN Implementing the right tools at the right moment

Assessing strategic options using the gathered intelligence

Negotiation Confrontation

Consulting

• Presentations and negotiations with Unions

• Presentations and negotiations with Working

Council(s)

Mirroring

• Unavoidable exposure by internal messaging

• Using Corporate Adds to persuade internal

audiences

• Allocating Coaches to key managers aimed at

adjusting role behavior

Consensus

• Town Hall meetings

• Management Meetings

• Jam Sessions

Power Play

• New organizational structures and decision

making procedures

• Appointing new managers in key roles

• Capability development in Internal Training

Programs

• New appraisal rules

Step 3: Balancing hard and soft wired initiatives

Step 3: Who does what?

Top Management

Sell their vision it to the rest of the

organization

Marketing

Expose employees to external

campaigns

Communication & HR

Internal communication Who does

what?

Facilitate vertical and

horizontal communication

Information Technology

Use reporting & appraisals format forcing

alignment

Accounting

Examination of historical performance,

using RepTrak Alignment Monitor over

two to three years (past)

1

2 3

2012 2013 2014

2012 2013 2014

Extrapolating KPI’s on aligned

behavior for the next years (future) Extrapolating key drivers of

alignment for next years (future)

 

Realized

2011Goal 2012 Goal 2013 Goal 2014

Manager leads by example 55.3 56.9 58.5 60.0

 

Realized

2011Goal 2012 Goal 2013 Goal 2014

Regular conversations manager 49.6 51.1 52.6 54.1

 

Realized

2011Goal 2012 Goal 2013 Goal 2014

Sufficient authorization 51.3 52.9 54.5 56.1

Sufficient recognition 55.3 56.9 58.5 60.1

Sufficient rewarded 47.3 48.9 50.5 52.1

KPIs INFORMING

KPIs CAPABILITY DEVELOPMENT

KPIs MOTIVATING  

Realized

2011Goal 2012 Goal 2013 Goal 2014

Alignment 55.2 56.8 58.4 60.0

KPI EMPLOYEE ALIGNMENT

Step 4: Key Performance Indicators

Introducing KPI’s using RepTrak™Alignment Monitor

Wrap up

• Aligned employees increase performance substantially

• Building and maintaining an aligned workforce requires a four

step approach:

Phase I:

Know Before You Go

Phase II:

Revealing

Support & Resistance

Phase III:

Action Plan Phase IV:

Tracking Progress