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HOW TO QUICKLY INTEGRATE PEOPLE, PROCESSES, AND STRATEGY FOR UNBEATABLE PERFORMANCE
By GEORGE LABOVITZ, VICTOR ROSANSKY
The McGraw-Hill Companies, Inc.Copyright © 2012George Labovitz and Victor Rosansky
All rights reserved.
The Big Picture: The Alignment Framework
An overview of the framework How the Main Thing fits in Case example of the framework in action
The first challenge of alignment is to get everyone on the same page by understanding the organization in the same way. Every enterprise for which we have worked, whether industrial, government, or healthcare, here or abroad, has four major elements. Each has a strategy. Each employs people to execute the strategy. Each has customers. Each has processes for meeting the needs of those customers. The relationships between those four elements form our alignment framework, which helps people understand the story of the business, that is, the way the business works.
As shown in Figure 1.1, our framework has two axes: one vertical and one horizontal. The vertical axis links people with strategy; the horizontal axis connects business processes with customers. Both are animated by what we call the Main Thing: the ultimate purpose of the organization and the unifying concept to which every employee and every unit can contribute.
Vertical alignment describes a condition in which every employee can articulate the enterprise's strategy and explain how his or her daily work activities support that strategy. Horizontal alignment breaks through the boundaries that often separate companies from their customers. Employees in horizontally aligned organizations notice the linkages shown in the figure between strategy and customers, between people and customers, and so forth. Alignment between these elements is as important as alignment on the two axes. A strategy, for instance, that doesn't align or make sense for customers will undermine everything that the organization and its people attempt to do. The same thing can be said for strategy and processes. A brilliant strategy for addressing customer needs will do little good if the organization has not developed business processes that efficiently and effectively deliver the goods!
The four elements in our framework—strategy, people, processes, and customers—must be aligned and realigned to achieve high performance. Accomplishing this requires mastery of two essential competencies, each of which we address in this book. These are the ability to do the following:
Rapidly deploy strategy. We emphasis rapid because strategies in a fast-moving world must change periodically, and when strategies change, the people who implement them must quickly understand and get behind them. The processes that support strategy must also realign quickly; you cannot launch a new strategy today and wait a year or more for key business processes to catch up. This competency requires an understanding of the external market as well as the organization's internal culture.
Continuously improve the core processes that serve customers. This alignment competency links the voice of the customer to continuous improvement. It requires a clear understanding of who the customers are, their current requirements, how well the organization is meeting their requirements, and who does it best. World-class companies have a common language and tool kit for continuous improvement. One of our clients told us that he can go from Seattle to Shanghai to Stockholm and know that every suggestion for improvement presented to him will be based on fact and a disciplined process for improvement.
Real-time performance measurement is an essential part of these competencies. Measurement indicates when and where misalignment is occurring. Measurement is so important in our framework that we will return to it often in this book. The chapter on rapid realignment (Chapter 8) explains how a web-based tool and employee participation can reveal points of misalignment at any level—down to the smallest department or activity. Armed with that knowledge, management can intervene when and where intervention is most needed.
The Main Thing
"The main thing is to keep the Main Thing the main thing!" We loved that expression when we first heard it from Jim Barksdale, then the chief operating officer (COO) of FedEx. That single sentence captures the greatest challenge facing managers today: keeping their people and the organization centered on what matters amid the crosscurrents of change. There are two aspects to that challenge. The first is to get everyone headed in the same direction with a shared purpose. The second is to integrate the resources and systems of the organization to achieve that overarching purpose: the Main Thing.
Every organization needs a Main Thing: a single powerful expression of what it hopes to accomplish. Growth and profits are surely the ultimate aim of every business organization, but they are outcomes of succeeding with the Main Thing.
In our experience, no organization captures the essence and importance of having a defining Main Thing better than FedEx, and no one personifies and articulates it better than its founder and chairman, Fred Smith. We first met him in the late 1980s, when we began helping that company implement Total Quality Management (TQM). At our initial meeting with the executive team in the Memphis headquarters, one of its members asked us what the team could expect to get from the company's sizable investment in TQM. Answering a question with a question, George asked, "What do you want back?" There was quick consensus about profit and customer satisfaction and retention and, after a brief discussion, employee satisfaction and retention. At that point, CEO Smith stopped the meeting, declaring, "Not at Federal Express!"
"We are in the service business," he continued. "How can we deliver world-class service without world-class people?" At FedEx, he said, "it must be people, service, profit, in that order!"
What we think is brilliant in this simple statement is that it teaches us that if we concentrate our efforts on recruiting and training the best people we can find, manage them effectively, and concentrate their efforts on delivering flawless service to customers, profit will follow. Profit becomes the dependent variable, the reward for doing the first two things very, very well. Smith's adherence to staying aligned with the Main Thing of People-Service-Profit has guided the growth of FedEx and sustained its commitment to operational excellence.
Smith described to us his understanding of the Main Thing, which he refers to as the "theory of the business":
Every successful business has, at its heart, a theory of the business—an underlying set of supporting objectives and a corporate philosophy that gives people a foundation on which to operate. Working inside that framework, they've got an idea of what we want them to do—to prioritize. We [at FedEx] have a very clear business mission and a business theory which is understood certainly by every member of the management team and probably by 90 percent of the workforce.
In our framework, the Main Thing is critically important. It is the end that strategy and human effort serve. We cannot achieve and maintain alignment without consensus and conviction about the Main Thing. Yet we are always amazed by how few people can articulate their organization's Main Thing. When we ask participants in workshops, "What's your Main Thing?" we see people digging into their wallets for the latest mission statement. Others look questioningly to the person sitting next to them. We wonder how these people can formulate a strategy or know how well they are doing if they cannot even state—or agree on—the ultimate purpose of their work.
Some people, however, can articulate their Main Thing without h
Excerpted from RAPID REALIGNMENT by GEORGE LABOVITZ, VICTOR ROSANSKY. Copyright © 2012 by George Labovitz and Victor Rosansky. Excerpted by permission of The McGraw-Hill Companies, Inc..
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