فصل ششم : دستیابی به همراستایی

CHAPTER 6

Achieve Alignment

Hannah Jaffey, a respected human resource consultant, was hired by a former client to be corporate vice president of human resources. She joined a company suffering from such intense conflict at the top that some senior executives were barely on speaking terms. Hannah had been brought in to support the CEO in making needed personnel changes and to rebuild the executive team.

Hannah soon realized the organization’s structure and incentives system were at the root of the problems. A year earlier, the company, which had grown rapidly, had been reorganized into business units, each focusing on a specific product line. However, several of the units’ customer bases overlapped, and the new structure and incentives system discouraged cooperation. The result? Confused customers, conflicts over which units owned key customer relationships, and an inability to offer integrated solutions. The turmoil had begun to impact the financials, with top-line growth stalling and the CEO facing tough questioning from the board and investors.

Convinced the company needed further structural change, Hannah laid out her case to the CEO. But he was reluctant to embark on another round of reorganization, and he remained convinced that the people were the problem. The organizational design was sound, he told Hannah, and with the right people in place it could work.

In truth, there were significant weak links in the executive team. But Hannah knew that the people issues couldn’t be dealt with until the structure was put right. So she kept coming back to her boss. She did an in-depth diagnosis and brought to his attention instances in which incentive misalignments had unnecessarily stoked conflict. She also highlighted how other companies had organized themselves to deal with similar tensions.

It took time, but eventually Hannah convinced the CEO to move the company to a hybrid structure. The focus of marketing and sales was returned to customer segments, leaving operations and R&D organized by product line, and a shared-services organization was created to provide finance, HR, IT, and supply chain support. The realignment worked: a year later, the company was functioning much more smoothly, customers were much happier, and robust growth had resumed. And it had become much clearer which executives needed to be replaced.

The higher you climb in organizations, the more you take on the role of organizational architect, creating and aligning the key elements of the organizational system: the strategic direction, structure, core processes, and skill bases that provide the foundation for superior performance. No matter how charismatic you are as a leader, you cannot hope to do much if your organization is fundamentally out of alignment. You will feel as if you’re pushing a boulder uphill every day.

If you have the scope to alter direction, structure, processes, and skills in your new position, you should begin to analyze the architecture of your organization and assess alignment among these key elements. In the first few months you can’t hope to do much more than conduct a solid diagnosis and perhaps get started on the most pressing alignment issues. But it’s important to get a handle on what needs to be done so that you can focus some of your early-win projects appropriately and lay the foundation for a subsequent, deeper wave of change.

Even if, like Hannah, you lack the authority to unilaterally alter the architecture of your new organization, you should focus on assessing organizational alignment. Look at how your piece of the puzzle fits (or doesn’t fit) into the bigger picture. Think about whether you need to convince influential people—your boss or your peers—that serious misalignments are a key impediment to achieving superior performance. Also, keep in mind that a thorough understanding of organizational systems can help you build credibility with people higher in the organization—and demonstrate your potential for more-senior positions.

Avoiding Common Traps

Many leaders rely on simplistic fixes to address complicated organizational problems, and they end up committing malpractice. Be alert to these common pitfalls: Making changes for change’s sake. The temptation is great for newly appointed leaders to make rapid, visible changes to strategies or structures, whether or not these elements are the right areas for focus. Often, leaders feel self-imposed pressure to put their stamp on the organization and seek to make changes before they really understand the business; it’s ready, shoot, aim. Once again, the action imperative creates a sure recipe for disaster.

Not adjusting for the STARS situation. There is no one best way to lead change. The right way to drive organizational alignment in a turnaround (with a focus on rapid and often radical shifts) is very different from the right way to proceed in an accelerated-growth situation or a realignment (when subtle and incremental changes often are the right way to proceed). So it’s essential not to adopt a one-size-fits-all approach to change but rather to understand the best ways to proceed in the various STARS situations.

Trying to restructure your way out of deeper problems. Overhauling your organization’s structure when the real issues lie in the processes, skill bases, and culture can amount to rearranging the deck chairs on the Titanic. Resist doing so until you understand whether restructuring will address the root causes of the problems. Otherwise, you may create new misalignments and have to backtrack, disrupting your organization and damaging your credibility.

Creating structures that are too complex. This is a related trap. It may indeed make sense, as it did in Hannah’s situation, to implement a matrix structure. Done well, matrices foster shared accountability and help you work through creative tension. But take care to strike the right balance and not diffuse decision making or introduce sclerotic complexity. Strive, where possible, for clear lines of accountability. Simplify the structure to the greatest degree possible without compromising core goals.

Overestimating your organization’s capacity to absorb change. It’s easy to envision an ambitious new strategic direction or shift in structure. In practice, though, it can be difficult for people to change in response to large-scale shifts, especially if they have experienced a string of such changes in the recent past. Move quickly if you need to—for example, in a turnaround. But proceed incrementally if the STARS situation permits—for example, in realignments or sustaining-success situations.

Designing Organizational Architecture

Begin by thinking of yourself as the architect of your unit or group. This may be a familiar role for you, but it probably isn’t. Few leaders get systematic training in organizational design. Because leaders typically have limited control over organizational design early in their careers, they learn little about it. It’s commonplace for less-senior people to complain about obvious misalignments and to wonder why “those idiots” higher up tolerate clearly dysfunctional arrangements. By the time you reach the midsenior levels of most organizations, however, you are well on your way to becoming one of those idiots. You’re therefore well advised to begin learning something about how to assess and design organizations.

To design (or redesign) your organization, start by thinking of it as an open system. This is illustrated for an entire business in figure 6-1; you may need to focus on only your piece. The “open” part refers to the reality that organizations are open to (that is, those elements they influence and are influenced by). This reality comprises (1) key players in the external environment, including customers, distributors, suppliers, competitors, governments, NGOs, investors, and the media, and (2) the internal environment: climate, morale, and culture. So leaders’ architectural choices must position the organization to respond to, as well as shape, the realities of the external and internal environments.

FIGURE 6-1

Elements of organizational architecture

The “systems” part highlights the fact that organizational architectures consist of distinct, interacting elements: strategic direction, structure, core processes, and skill bases. The implication is that you can work on individual elements—for example, change the strategy, alter the structure, streamline a process, or hire people with a different skill set—but you shouldn’t do so without thinking through the impact on the other elements. Specifically all four elements of organizational architecture need be aligned to work together.1 Strategic direction. The organization’s mission, vision, and strategy

Structure. How people are organized in units and how their work is coordinated, measured, and incentivized

Core processes. The systems used to add value through the processing of information and materials

Skill bases. The capabilities of key groups of people in the organization

Of course you need to have the right strategic direction to move forward effectively. But misalignments involving any of the other elements can make even the best strategy useless. Strategic direction drives the other elements and is influenced by them: if you decide to change your group’s direction, you will probably have to alter its structure, processes, and skills to create a fully aligned architecture.

Diagnosing Misalignments

Organizations can end up misaligned in many ways. Your goal during your first 90 days should be to identify potential misalignments and design a plan for correcting them. Common types of misalignments include the following: Misalignments between strategic direction and skill bases. Suppose you head an R&D group and your goal is to increase the number of new product ideas your team generates and tests. However, your staff is not up to speed on the latest techniques that would let you run more experiments faster than before. In this case, your group’s skills do not support its mission.

Misalignments between strategic direction and core processes. Imagine that you lead a marketing group whose mission is to focus on meeting the needs of a new customer segment. If your team has not established an effective way to compile and analyze information about those customers, your group’s systems fail to support the direction. There is a mismatch between strategic direction and core processes.

Misalignments between structure and processes. Suppose you manage a product development group whose members are organized by product line. The rationale for this structure is that it focuses specialized technical expertise on specific products. But this structure has a downside: the group does not have efficient systems for sharing best practices among the various product teams. The resulting mismatch between structure and processes would make it difficult for the entire group to perform optimally.

Misalignments between structure and skills. Suppose the business has recently moved from a functional structure to a matrix structure in an effort to balance product-related and functional decisions. People are used to relying on authority and functional reporting lines to get things done, but now they need to use influence and conflict management skills. The shift in structure has created a mismatch with needed skills that will need to be addressed.

Getting Started

Aligning an organization is like preparing for a long sailing trip. First, you need to be clear on whether your destination (the mission and goals) and your route (the strategy) are the right ones. Then you can figure out which boat you need (the structure), how to outfit it (the processes), and which mix of crew members is best (the skill bases). Throughout the journey, you keep an eye out for reefs that are not on the charts.

The underlying point is that there is a logic to organizational alignment. It’s likely to cause problems if you try to change the structure before figuring out whether the direction is the right one. Also, you cannot fully assess the fitness of your existing crew until you have a handle on your destination, route, and boat, although you certainly can get started. Here’s how: Begin with strategic direction. Take a hard look at how your unit is positioned with respect to the larger organization’s goals and your agreed-to priorities. Make sure your mission, vision, and strategy are well thought through and logically integrated.

Look at supporting structure, processes, and skills. Look at whether your group’s existing structure, processes, and skill bases support the strategic direction—either the existing one (if you decide not to change it) or the one you envision. Dig into and understand the relationships among these elements. If one or more of them is ill suited to the mission or strategy you have in mind, figure out how you will either adapt your direction or build (or acquire) the capabilities you need.

Decide how and when you will introduce the new strategic direction. Armed with a deeper understanding of your group’s current capabilities, chart a path for shifting direction (if such a shift is necessary). Sketch out changes in positioning (markets, customers, and suppliers) as well as changes in supporting capabilities. Then adopt a realistic time frame for making these changes.

Think through the correct sequencing. Different situations demand different approaches to bringing organizations into alignment. In a turnaround, the right approach often is to alter the strategy (which typically is not adequate), then to bring the structure into alignment with it, and then to focus on supporting processes and skills. In a realignment, however, strategic direction and structure often are not the real source of the difficulties. Instead, they frequently lie in the processes and skill bases of the organization, and these are the places to focus on.

Close the loop. As you learn more about your group’s structure, processes, and skills, you will gain insight into the team’s capabilities and its cultural capacity for change. This insight will in turn deepen your understanding of what changes in strategic positioning are possible over what time period.

Defining Strategic Direction

Strategic direction encompasses mission, vision, and strategy. Mission is about what will be achieved, vision is about why people should feel motivated to perform at a high level, and strategy is about how resources should be allocated and decisions made to accomplish the mission. If you keep in mind the what, the why, and the how, you won’t get lost in debates about what a mission is, what a vision is, and what a strategy is.

Some fundamental questions about strategic direction concern what the organization will do and, critically, what it will not do. Focus on customers, capital, capabilities, and commitments: Customers. Which set of existing customers (external or internal) will we continue to serve? What is our value proposition? Which markets are we going to exit? What new markets are we going to enter, and when?

Capital. Of the businesses we will remain in, which will we invest in, and which will we draw cash from? What additional capital is likely to be required, and when? Where will it come from?

Capabilities. What are we good at and not good at? What existing organizational capabilities (for example, a strong new-product development organization) can we leverage? Which do we need to build up? Which do we need to create or acquire?

Commitments. What critical decisions do we need to make about resource commitments? When? What difficult-to-reverse past commitments do we have to live with or try to unwind?

It is beyond the scope of this book to delve deeply into the development of strategic direction, but excellent resources are available to help you answer these questions. Our focus here is on assessing the current direction by looking at its coherence, adequacy, and implementation.

Assess Coherence

Is there a clear logic to the choices that have been made about customers, products, technologies, plans, and resource commitments? To assess whether the elements of strategic direction fit together, you need to look at the logic behind the strategy to ensure that it makes sense overall. Have the people who defined it thought through all its ramifications and the practical aspects of implementing it?

How do you evaluate the logic of the organization’s strategic direction? Start by looking at documents that describe your group’s mission, vision, and strategy. Then disassemble them into their components: markets, products, technologies, functional plans, and goals. Ask yourself, Do the various dimensions support one another? Is there a logical thread connecting the various parts? To be more specific, is there an obvious connection between market analysis and the group’s objectives? Does the product development budget jibe with the capital investments projected in the operations part of the strategy? Are plans in place to train salespeople for new products in the pipeline?

If the organization’s strategic direction makes sense overall, you will spot such connections easily.

Assess Adequacy

Is the defined direction sufficient for what your unit needs to do in the next two or three years? Will it be sufficient to support the larger organization’s goals? Your group may have a well-thought-through and logically integrated strategic direction. But is it also adequate? That is, will it empower the group to carry out what it needs to do to succeed—and to help the larger organization succeed—in the next two or three years?

To assess adequacy, use these three approaches:

Ask probing questions. Does your boss believe the current direction will provide enough return on the effort your group will expend to implement it? Are there plans in place to secure, develop, and preserve resources for carrying it out? Are profit and other targets high enough to keep the group on the right track? Is enough money earmarked for capital investment? For research?

Use a variation on the well-known SWOT method. See the box “From SWOT to TOWS.”

Probe the history of how strategic direction got defined. Find out who drove the process of defining strategic direction. Was it done in a rush? If so, the developers might not have thought through all the ramifications. Did it take a long time? If so, it might represent a lowest-common-denominator compromise that emerged from a political battle. Any mistakes during the development process could compromise the strategy’s adequacy.

From SWOT to TOWS

SWOT is arguably the most useful (and certainly the most misunderstood) framework for conducting strategic analysis. The reason has to do with how the tool was developed and, critically, how it was named. SWOT—an acronym for strengths, weaknesses, opportunities, and threats—was originally developed by a team at the Stanford Research Institute (SRI) in the late 1960s.2 The group came up with the idea of simultaneously analyzing internal capabilities (strengths and weaknesses) and developments in the external environment (threats and opportunities) to identify strategic priorities and develop plans to address them.

Unfortunately, the developers named their method SWOT, with the implication that the analysis should be carried out in that order—first, internal strengths and weaknesses, and then external opportunities and threats. This implied hierarchy has created no end of problems for those who use the methodology to drive strategy discussions in teams. The problem is that in the absence of something to anchor the discussion, an analysis of organizational strengths and weaknesses can very easily become abstract, undirected navel-gazing. As a result, groups often fail in trying to define their organization’s strengths and weaknesses, end up frustrated and exhausted, and so give short shrift to critical developments in the external environment.

The correct approach is to start with the environment and then analyze the organization. The first step is to assess the organization’s external environment, looking for emerging threats and potential opportunities. Naturally this assessment must be conducted by people who are grounded in the reality of the organization and knowledgeable about its environment.

Having identified potential threats and opportunities, the group should next evaluate them with reference to organizational capabilities. Does the organization have weaknesses that make it particularly vulnerable to specific threats? Does the organization have strengths that would permit it to pursue specific opportunities?

The final step is to translate these assessments into a set of strategic priorities, blunting critical threats and pursuing high-potential opportunities. These are then the inputs to a more extensive strategic planning process.

The confusion that has flowed from naming the method SWOT is so pervasive that a name change is probably in order. The alternative? Call it TOWS, so that people get the right cues about the best order for conducting the process.

Assess Implementation

Have the mission, vision, and strategy of your organization been pursued energetically? If not, why not? Look at how your group’s strategic direction is being implemented—what people are doing and not what they are saying. This approach will help you pinpoint whether problems stem from inadequacies in formulation or implementation. Ask yourself these kinds of questions: Is our overall pattern of decisions consistent with our defined direction? What goals does the organization actually seem to be pursuing?

Are we using the specified performance metrics to make day-to-day decisions?

If implementation requires teamwork and cross-functional integration, are people acting as teams and collaborating across functions?

If implementation requires the development of new employee skills, is a learning-and-development infrastructure in place to develop those skills?

Your answers to these kinds of questions will tell you whether to push for changes in your group’s strategic direction or in its implementation.

Modify Strategic Direction

Suppose you discover serious flaws in the mission, vision, and strategy you have inherited. Can you radically change them or the way they’re implemented? That depends on two factors: the STARS situation you’re entering, and your ability to persuade others and build support for your ideas.

If you believe that your group is on the wrong path, you need to raise questions to persuade your boss and others to reexamine strategic direction. If you conclude that the existing strategy will move the group forward, but neither fast enough nor far enough, the wisest course may be to tweak it early on and plan for bigger changes later. For example, you might raise the targeted revenue goals modestly or recommend investing in a needed technology sooner than the strategic direction calls for. More fundamental changes should wait until you’ve learned more and have built support among key constituencies.

Shaping Your Group’s Structure

Whether or not you decide to change the strategic direction of your organization, you still need to assess the adequacy of the structure. If the structure doesn’t support the strategy—either the existing one or a new one you plan to put in place—your organization’s energies will not be directed appropriately.

One caution: much of an organization’s power gets allocated via its structure, because it defines who has the authority to do what. So take care not to take on structural change unless it is obvious that it’s needed—for example, in turnaround or rapid-growth scenarios. Tackling structural change early on can be particularly perilous in realignments, where there isn’t a burning platform to drive the change process.

What is structure exactly? Most simply, your group’s structure is the way it organizes people and technology to support the mission, vision, and strategy. Structure consists of the following elements: Units: How your direct reports are grouped, such as by function, product, or geographical area

Reporting relationships and integration mechanisms: How lines of reporting and accountability are set up to coordinate effort, and how work among units is integrated Decision rights and rules: Who is empowered to make what kinds of decisions, and what rules should be applied to align decisions with strategy

Performance measurement and incentive systems: The performance-evaluation metrics and incentive systems that are in place

Assess Structure

Before you begin to generate ideas for reshaping your group’s structure, look into the interaction of the four structural elements. Are the pieces out of tune or in harmony? Ask yourself these questions: Does the grouping of team members help us achieve our mission and implement the strategy? Are the right people in the right places to work toward our core objectives?

Do reporting relationships help align effort? Is it clear who is accountable for what? Is the work of different units integrated effectively?

Is the allocation of decision rights helping us make the best decisions to support the strategy? Is the right balance achieved between centralization and decentralization? Between standardization and customization?

Are we measuring and rewarding the kinds of achievements that matter most to our strategic aims? Is the balance right between fixed rewards and performance-based rewards? Between individual incentives and group incentives?

If you’re in a start-up situation—and therefore forming a new group—you will not have existing structures to evaluate. Instead, think about how you want the structural pieces to work in your group.

Grapple with the Trade-Offs

There is no perfect organizational structure; every one embodies trade-offs. Thus, your challenge is to find the right balance for your situation. As you consider changes in your group’s structure, keep in mind some common problems that can arise: The organization has silos of excellence. When you group people with similar experience and capabilities, they can accumulate deep wells of expertise. But they can also become isolated and compartmentalized. The implication is that you need to pay attention to how integration happens. This includes looking at who is responsible for bridging the chasms between functions, as well as identifying whether the right integration mechanisms, such as cross-functional teams and group performance incentives, are in place.

Employees’ decision-making scope is too narrow or too broad. A good general rule is that decisions should be made by the people who have the most relevant knowledge, as long as their incentives encourage them to do what is best for the organization. If your group’s decision-making process is centralized, you (and perhaps several other individuals) can decide quickly. But you may be forgoing the benefit of the wisdom of others who have better information to make certain of those decisions. This structure can lead to ill-informed decisions and can tax those who make all the decisions. If, on the other hand, people are given decision-making scope but do not understand the larger implications of their choices, they may make unwise calls.

Employees have incentives to do the wrong things. The best predictor of what people will do is what they are incentivized to do. Effective leaders seek to align the interests of individual decision makers with the interests of the group as a whole. This is why placing more emphasis on group incentives is effective in some organizations: they focus everyone’s attention on the ability to work together. Problems arise when measurement and compensation schemes fail to reward employees for either their individual or their collective efforts. Problems also arise when rewards advance employees’ individual interests at the expense of the group’s broader goals—for example, when multiple employees who could serve the same set of customers lack incentives to cooperate. This was the problem confronting Hannah in the story at the beginning of the chapter.

Reporting relationships lead to compartmentalization or diffusion of accountability. Reporting relationships help you observe and control the workings of your group, clarify responsibility, and encourage accountability. Hierarchical reporting relationships make these tasks easier but can lead to compartmentalization and poor information sharing. Complex reporting arrangements, such as matrix structures, broaden information sharing and reduce compartmentalization but can diffuse accountability.

Aligning Core Processes

Core processes (often referred to as “systems”) enable your group to transform information, materials, and knowledge into value in the form of commercially viable products or services, new knowledge or ideas, productive relationships, or anything else the larger organization considers essential. Again, as with structure, ask yourself whether the processes currently in place support your mission, vision, and strategy.

Make the Right Trade-Offs

Keep in mind that the extent and types of processes you need depend on the trade-offs you need to make. Think, for example, about whether your primary goal is to drive flawless execution or to stimulate innovation.3 You can’t hope to execute with high levels of quality and reliability (and low costs) without an intensive focus on developing processes that specify both the ends and the means (methods, techniques, tools) in exquisite detail. Obvious examples are manufacturing plants and service delivery organizations. But these same sorts of processes can impede innovation. So if stimulating innovation is your goal, you may need to develop processes that focus on defining ends and rigorously checking progress toward achieving them at key milestones, and not so much on controlling the means people use to achieve the results.

Analyze Processes

A credit card company that sought to identify its core processes came up with the results shown in table 6-1. It then mapped and improved each of these processes, developing appropriate measurement schemes and altering reward systems to better align behaviors. It also focused on identifying key bottlenecks. For critical tasks that were insufficiently under control, the company revamped procedures and introduced new support tools. The result was a dramatic increase in both customer satisfaction and the productivity of the organization.

Your unit or group may have just as many processes as the credit card company. Your first challenge is to identify those processes and then to decide which of them are most important to your strategy. For example, suppose your group’s strategy emphasizes customer satisfaction over product development. You would want to ensure that all the processes involved in delivery of products or services to customers support that goal.

TABLE 6-1

Process analysis example

Align Processes with Structure

If your group’s core processes are to support its strategic direction, they must also align with the unit’s structure (the way people and work are organized). We can compare this relationship to the human body. Our anatomy—skeleton, musculature, skin, and other components—is the structural foundation for the body’s normal functions. Our physiology—circulation, respiration, digestion, and so on—is the set of systems (or processes) that enable the various parts of the body to work together. In organizations, as in human bodies, both the structure and the processes must be sound and must reinforce one another.

To evaluate the efficiency and effectiveness of each core process, you should examine four aspects:

Productivity. Does the process efficiently transform knowledge, materials, and labor into value?

Timeliness. Does the process deliver the desired value in a timely manner?

Reliability. Is the process sufficiently reliable, or does it break down too often?

Quality. Does the process deliver value in a way that consistently meets required quality standards?

When processes and structure mesh with each other, the good results are clear to see. For example, a customer service organization structured around specific customer segments also shares information across teams and responds effectively to issues that affect all customer groups.

But when processes and structure are at odds—as when different teams compete for the same set of customers using different sales processes—they hamstring one another and subvert the group’s strategy.

Improve Core Processes

How do you actually improve a core process? Start by making a process (or work-flow) map—a straightforward diagram of exactly how the tasks in a particular process flow through the individuals and groups who handle them. figure 6-2 shows a simplified process map for order fulfillment.

Ask the individuals responsible for each stage of the process to chart the process flow from beginning to end. Then ask the team to look for bottlenecks and problem interfaces between individuals responsible for adjacent sets of tasks. For example, errors or delays may occur when someone in customer relations communicates to the fulfillment group the need for special handling of an order. Process failures are commonplace during hand-offs of this kind. Work with the team to identify opportunities for high-leverage improvements.

FIGURE 6-2

A process map

Process analysis stimulates collective learning. It helps the entire group understand exactly who does what, within and between units or groups, to carry out a particular process. Creating a process or work-flow map also sheds light on how problems arise. You, your boss, and your group can then decide how best to improve the process—for example, by streamlining and automating work flows.

A few words of caution. You are probably responsible for a number of processes. If so, manage them as a portfolio, focusing on a few at a time. Take care to factor in your organization’s capacity to absorb change.

Developing Your Group’s Skill Bases

Do your direct reports have the skills and knowledge they need to perform your group’s core processes superbly—and thus to support the strategy you have identified? If not, the entire architecture of your group could be compromised. A skill base comprises these four types of knowledge: Individual expertise. Gained through training, education, and experience

Relational knowledge. An understanding of how to work together to integrate individual knowledge to achieve specified goals

Embedded knowledge. The core technologies on which your group’s performance depends, such as customer databases or R&D technologies

Metaknowledge. The awareness of where to go to get critical information—for example, through external affiliations such as research institutions and technology partners Identify Gaps and Resources

The overarching goal of assessing your group’s capabilities is to identify (1) critical gaps between needed and existing skills and knowledge and (2) underutilized resources, such as partially exploited technologies and squandered expertise. Closing gaps and making better use of underutilized resources can produce significant gains in performance and productivity.

To identify skill and knowledge gaps, first revisit your mission and strategy and the core processes you identified. Ask yourself what mix of the four types of knowledge is needed to support your group’s core processes. Treat this as a visioning exercise in which you imagine the ideal knowledge mix. Then assess your group’s existing skills, knowledge, and technologies. What gaps do you see? Which of them can be repaired quickly, and which will take more time?

To identify underutilized resources, search for individuals or groups in your unit who have performed much better than average. What has enabled them to do so? Do they enjoy resources (technologies, methods, materials, and support from key people) that could be exported to the rest of your unit? Have promising product ideas been sitting on the shelf because of lack of interest or investment? Could existing production resources be adapted to serve new sets of customers?

Changing Architecture to Change Culture

Keep in mind that culture is not something you can change directly. It is powerfully influenced by the four elements of organizational architecture, as well as by leadership behaviors. The implication is that to change the culture, you need to change the architecture as well as reinforce what you’re trying to do with the right leadership.

One example is changing the metrics by which you judge success and then aligning employees’ objectives and incentives with those new measures. For instance, consider changing the balance between individual and group incentives. Does success require people to work closely and coordinate with one another—for example, in a new-product development team? If so, then put more weight on group incentives. Do people in your group operate independently—for example, in a sales unit? If so, and if their individual contributions to the business can be measured, then place more emphasis on individual incentives.

Getting Aligned

Draw on all the analyses discussed in this chapter to develop a plan for aligning your organization. If you’re repeatedly frustrated in your efforts to get people to adopt more productive behaviors, step back and ask whether organizational misalignments might be creating problems.

ACHIEVE ALIGNMENT—CHECKLIST

What are your observations about misalignments among strategic direction, structure, processes, and skills? How will you dig deeper to confirm or refine your impressions?

What decisions about customers, capital, capabilities, and commitments do you need to make? How and when will you make these decisions?

What is your current assessment of the coherence of the organization’s strategic direction? Of its adequacy? What are your current thoughts about changing direction?

What are the strengths and weaknesses of the organization’s structure? What potential structural changes are you thinking about?

What are the core processes in your organization? How well are they performing? What are your priorities for process improvement?

What skill gaps and underutilized resources have you identified? What are your priorities for strengthening key skill bases?