Untangling Your Organisational Hairball: Highly Aligned

All organisations are perfectly aligned to get the results they get.
—Stephen R. Covey, Educator and Author

My first blog post on untangling your organisational hairball describes six focus areas to increase organisational agility. The first is to be highly aligned. As the Cheshire Cat remarked in Alice’s Adventures in Wonderland, “If you don’t know where you are going, any path will get you there.”

Studies and anecdotes point to a shared challenge in organisations, especially larger ones: Employees think they understand where they are going and what the key priorities are, but their definitions of these goals rarely align with those of their peers, even within the C-suite.

So, what does good look like? Here are a few recurring patterns that help drive alignment.

From Top-Down to Intent

A surprisingly common challenge is what the Enterprise Strategy team calls “The Team of Leaders Issue.” A group of senior leaders agree on an abstract goal, like “We’re going to become more customer-centric,” because it seems fairly simple and obvious.

And that’s the problem.

Everyone nods their head, agreeing vigorously, and leaves the room. Then they translate this goal for their respective teams. The CMO decides becoming customer-centric means offering a wider selection of products. The CFO believes it means offering fewer products and investing in higher-quality merchandise. The CIO focuses on e-commerce and digital channels, while the CEO advocates for high-touch, in-store experiences. Everyone agrees, but no one actually agrees, creating friction and conflicting goals. This is unbelievably common because no one asks, “What does this goal actually mean?”

An organisation’s well-debated and considered vision and mission point everyone towards the same direction. They define a future to march towards but aren’t overly prescriptive about how to get there. They cascade from the organisation’s very top into business outcomes and individual team missions. When done properly, visions and missions trust teams to understand the organisation’s intent, rejecting the idea that leaders can micromanage teams through bureaucratic mechanisms. (For more on this, see my blog post on enabling autonomy in teams.)

There must be more than slogans and ambiguous strategic pillars. There needs to be enough detail so that everyone in your organisation can see how their work contributes to the mission.

It’s only in hindsight that I understand how the vision was woven into the DNA of my previous employer, McDonald’s Corporation. An inordinate amount of time was spent ensuring global stakeholders, from franchisees to business partners and corporate staff, shared an understanding of where the organisation was going. It was at the heart of the company’s competitive advantage, enabling everyone to move quickly in the same direction.

From Absolute Metrics to Relative Metrics

The meaningless metric is another recurring issue. The leadership team agrees to double sales in five years. One year later, no one can recall why they said “double” or “five years.” The goal is meaningless to the average employee who happily ignores it. Two years pass without much action (“There’s a load of time!”). Panic sets in towards the end of Year 3, and in Year 4, an alarm starts until there is a change in leadership and the goals reset.

 Underpinning an organisation is usually a set of common metrics that should help make the mission more concrete. At the beginning of McDonald’s digital transformation, the CEO set a few goals, including establishing Mobile Order and Pay in 20,000 restaurants and Home Delivery in 8,000 restaurants by the end of the year. These were powerful metrics; every employee could judge daily whether their work was helping or hindering progress.

A better form of the long-term metric is the relative metric. It’s easy to accept a metric without understanding its implications. Take, for example, “We’re going to work in two-week sprints.” IT can deliver on this schedule, but the metric is meaningless if other elements on the value chain indicate the time to value is best measured in months, not weeks. This example demonstrates Goodhart’s Law: When a metric becomes the goal, it ceases to be a good metric. This can lead to adverse and even unethical behaviour [1]. Good metrics, such as cost per transaction for a payroll system or velocity for software development, invite continuous improvement. In each case the goal is to improve continuously rather than hit a number and declare victory.

From Target Operating Model to Principles

Rather than pretending you can craft the perfect organisation chart and operating model, I advocate starting with principles and tenets to guide your organisation. The former method is an overly logical and static approach to human issues, as I described in my first post on untangling your organisational hairball. Principles have (I hope) shifted from outdated concepts, such as spans of control, in search of elusive efficiencies to those better suited for an era where complexity, speed, and innovation define organisations. Previous blog posts give in-depth examples of principles and decision-making tenets. But remember, the most beautifully crafted principles in the world mean nothing unless a comprehensive understanding of them cascades throughout the organisation.

From Autonomy to A²

Organisations love to talk about autonomy, perhaps to the point it is perceived as a silver bullet. Who doesn’t want teams that can rapidly work independently and deliver ever-increasing business value? It is a noble and worthwhile effort. Making decisions closer to the customer aids agility, speed, and relevance, but guardrails must ensure everyone can move towards the same goals or purpose. Organisation-wide alignment is one such guardrail. Agility without this unity of direction is better known as anarchy.

This raises an interesting systems dynamics issue: Overfocusing on alignment leads to slow-moving coordination and governance overhead. Too little focus, duplication, and conflict become rife instead. Alignment and autonomy need to be paced together. As an organisation becomes more aligned through shared metrics, principles, tenets and mission, the more autonomy can be driven down into the organisation.

I came from a company that used the mantra “Freedom in a framework” to describe this balance. It isn’t easy. It’s tempting to turn the framework into a prison of overburdensome standards; that is when extremes dominate. Mark Schwartz’s excellent blog post on centralisation and decentralisation outlines a good mental model.

From Doing Agile to Being Agile

If you believe that aligned organisations can drive more decisions closer to the customers to create agility, you hopefully also believe that agile is not an operating model but a lifestyle choice. True agility is a mindset that values creating meaningful business outcomes over artificial delivery milestones and ritualistic mantras. It requires leaders to understand that autonomy is about relinquishing power, not being that manager of old who encourages teams to experiment with new ideas but with an under-the-breath statement of “Don’t actually do anything without checking in with me first.” It’s easy to forget the underpinning of agility: interactions and people over processes and tools.

—Phil

References

[1] Harris, Michael, and Bill Tayler. “Don’t Let Metrics Undermine Your Business.” Harvard Business Review, August 27, 2019. https://hbr.org/2019/09/dont-let-metrics-undermine-your-business.