THE SUCCESS FORMULA: HOW SMART LEADERS DELIVER OUTSTANDING VALUE
Author: Andrew Kakabadse
Price: Rs 499
Although alignment and engagement are two separate elements of the success formula - and therefore require two distinct sets of processes and considerations - the research shows that the two are interconnected. So if alignment is the logic and structure to execute strategy, then engagement is the desire, willingness, motivation (or demotivation) to make the structures and processes work.
Yet, typically, these two considerations have been treated separately -both academically and from a consulting perspective. The structural forms or processes that are implemented will have engagement repercussions. Yet the debate on the repercussions of alignment rarely occurs inside organizations as the topic raises distinct sensitivities.
How does one challenge the CEO and tell him or her that his or her structure is wrong? What to do when KPIs push the organization into the siloed way of thinking and operating, and yet, cross-functional teamwork is necessary but cannot easily be measured as an output? How does one induce a culture of client referral from one department to the next when the consultants involved are rewarded on the size of contract achieved? Client referral means sharing the pot and few organizations have developed the maturity for such a practice. The sensitivities are understandable. Challenging the boss, challenging the system, and challenging the whole fabric of the organization usually does little to further one's career. This needs to change if misalignment is to be tackled. Constructively challenging ingrained views and practices is necessary.
The business press is full of stories about misguided strategies. Lurking just below the surface of many of these are the repercussions of mismanaged alignment and engagement. Take the example of Hewlett-Packard a few years ago. This is how Fortune described Mark Hurd, the then newly appointed CEO of HP following the dismissal of Carly Fiorina as CEO:
Hurd gets jazzed by diving into sales numbers - he jokes about "interrogating the data" until it confesses. Fiorina loved the limelight; Hurd did not want to be on the cover of this magazine. Fiorina owned Davos, the annual teach-in for "Plutocrats" in the Swiss Alps; Hurd skipped this year's session citing "customer commitments." Fiorina was always on message; Hurd is sales optimization in a suit.
The article emphasized the differences of vision and approach between Hurd and Fiorina. Particularly visible is the alignment Hurd created between market opportunities and the company's strengths. "Hurd boils down HP's opportunities to three market trends that neatly match the company's three main units ... no matter how you dress up his views, he is simply trying to leverage the things HP is already good at," the story continues. "It's as if a new CEO of Procter and Gamble were to demand-what else can we do here with toothpaste and diapers?"
Hurd dismantled the centralised selling group and reversed the Fiorina structure, which combined printers and PCs. Despite layoffs, a reduction in R&D spending, the introduction of global promotion schemes, and a freezing of pension benefits, management and the work force seemed to be behind Hurd. He also brought in new management talent, and the results of his endeavors were increased profits and share prices.
Alignment provides a two fold advantage: the reduction of complexity and greater clarity by clearly displaying the links between initiatives.
The value proposition is clear. From then on, interrogation focuses more on detail.
As one senior general manager observed: "It's never the structure or the systems; it is the fact that my bosses do not have joined-up thinking. Why do you think we keep changing the structure every nine months or so? It is because we cannot agree on how to do our business."
My research supports this view. When the top team does not agree, each member pulls in a different direction. The mixed messages that ensue drive general managers away from the center.