by Russell T. Westcott
Organizational alignment is when the organization’s vision, mission, culture, strategies, policies, structure, goals, objectives, and actions (processes, procedures, products, and services) form a traceable interrelationship from top to bottom, and vice versa. Examples of nonalignment are:
- A process improvement team generates a proposal to improve a process. A primary question is does the process improvement and the product it would produce align strategically with the organization? The changed product could affect every internal function as well as external factors and have both positive and negative effects.
The improved product may affect current customers—e.g., obsolescence, need to alter their design, re-tool, new product could open new markets and affect marketing and sales, pricing adjustments may be needed, new skills training may be required, procedures would need to change, the organization’s vision could be challenged if there is desire to market globally. These are but a few of the possible effects. Failure to examine potential effects and challenges can cause an imbalance of the organization and unneeded turmoil.
- Top management made a decision to purchase a much smaller company to show shareholders a willingness to diversify. There was no similarity between the two organizations: The product was totally different, the skills to produce the product were nonexistent in the buying company, the market for their product was constrained to one industry, the impetus to buy this company appeared to be a belief they could eventually absorb the smaller company because the larger company was known for its world-class business culture, policies, and management practices.
Because of a failure to do due diligence (financially, culturally, and managerially), the merger lasted less than six months—a total failure and near-destruction of the formerly profitable smaller company.
- A company established a training and development department to offer in-house skills training to the workforce and management development to managerial personnel. The training and development department reported to human resources and was comprised of twelve trainers and a manager. Eight of the trainers were fresh out of college—bright people but lacking company knowledge and experience. The manager was senior in age and had some experience training operators on the job. The human resources director initiated the group unilaterally. The concept was for the department to develop a portfolio of skills-training programs based on past surveys and add management development courses purchased from outside vendors. No current in-depth needs analysis was done. The portfolio basically represented what the trainers wanted to deliver or surmised the training the workers should have. The uncoordinated nature of the offerings and the poorly designed courses were often perceived by attendees as merely “vacations” from work and totally unproductive. Workers selected two or three courses they wished to attend during the year. Their supervisors were bound by policy to allow the workers to attend the courses.
Managerial personnel received occasional training, but it was typically embedded with an offsite business meeting. No needs analysis was conducted and decisions as to what development courses a manager was to attend were made mostly by a manager’s superior. No measurable positive outcome was developed for either of these efforts.
Furthermore, top management frequently dictated that a whole work unit be trained or retrained when productivity or quality slipped. No one challenged whether the problem was due to a lack of skill or—perhaps more likely—a process problem, resource problem, or supervisor incompetence. This irrational thinking could have been challenged by the training manager or at least the human resources director. However, no one appeared to have the courage to do so or experience in challenging such dictates. “Training” was the magic patch that would fix everything. Much needless time and money was spent on unnecessary training.
Two years later, the company found itself in a financial bind. Top management had no qualms about closing down the entire training department. No demonstrated benefits of their efforts had ever been requested or reported—other than listings of courses conducted and number of attendees at each course, there was no other documentation.
These three scenarios are extreme examples of a lack of alignment. Not only are many of the processes within an organization’s system often fragmented attempts to make improvements but these processes can also be outright dysfunctional in how they are thrust upon the workforce. There is no strategic fit analysis, no needs analysis, no cost-benefit analysis, and insufficient analysis of how the change can be instituted and bought-into by those affected. See table 1 for tools to determine organizational alignment needs.
Table 1: Tools for highlighting alignment needs
- Environmental analysis:
- PEST model—An analysis of the changing political, economic, sociological, and technological factors currently or potentially affecting the organization and its stakeholders.
- SWOT analysis—An analysis of the strengths, weaknesses, opportunities, and threats to determine the impact on the organization of perceived or planned changes in strategy. This analysis should explore the potential impact of changes on customers, shareholders, management, employees, suppliers, unions, and the financial environment, as well as identifying and minimizing the risks involved.
- Three basic questions:
- Where are we now?
- Where do we wish to get to—our future vision?
- What is the best way to get there?
- Five major steps for strategy planning after management’s commitment and support has been established:
- Define or redefine the business and establish the strategic mission.
- Set strategic goals, objectives, and action plans (including performance targets).
- Deploy the strategy and plans throughout the organization for implementation.
- Evaluate performance of the new strategic plan and take necessary corrective or preventive actions as needed.
Organizational culture and change management
Culture is a perspective of the artifacts, values, and underlying assumptions shared by members of an organization. There are two categories: the technical culture, which defines how products and services are realized, and the social culture, which pertains to how people communicate, interrelate, and make decisions, evidenced by employee behaviors.
Organizational culture is manifested by:
- How power is used: Is the focus on the organization or individuals?
- Orientation toward risk or safety: Is it based on caring or just regulations?
- How mistakes are treated: Are mistakes punished, hidden, or used to guide improvement?
- How outsiders are perceived and treated
- Vision, mission, principles, policies, protocols, procedures, and practices
- Artifacts, workplace layout, and amenities
- Influence of founders, their family members, political entities, governments, regulatory bodies, customers, and suppliers
Organizational culture, when recognized and understood, can appear to be an insurmountable roadblock to implementing improvement changes. When ignored, it can slow or stop an improvement initiative, to the surprise and dismay of the initiative’s leaders—their thinking being “the improvement looks so good, our owners will love it, the customer will love it, and the employees will make it successful.”
Any major quality improvement initiative will be affected by organizational culture and require a carefully planned change management process. In nearly every case, changing an organization’s culture means significant behaviors must be fundamentally changed. The words of top management may reflect: “We’ve done our work this way for x years, the company has been successful, so there’s no need to do anything about how we behave. Forget that idea, just go ahead with the _______ (ISO certification thing, Six Sigma stuff, process reengineering, or whatever).” Or words from an employee in the union-represented workforce level: “My guess is that the changes I hear are coming are just another way for management to lay people off. I don’t know much about the changes, but I’m against them no matter what.” Workforce rumors and insufficient communication often trump the best intentions of officials.
Many experienced change agents concur that it takes a minimum of three years to effect an organizational culture change, sometimes much longer. It takes careful, data-based planning, intensified internal communications, persistence, top management’s visible support and personal involvement, and a few persons in the organization willing to be the first “converts.” Culture change means that employees at all levels will need to change their behaviors. And yes, it takes some start-up money and time. In most cases it’s not easy but the results for the organization and its people will prove to be welcomed. The documented return-on-investment alone can more than adequately fund organizational improvements into the future.
There are four types of organizational culture. See table 2.
|Table 2: Organizational culture types|
|Power||Identification with strong leader||Fear, need permission to act|
|Role||Systems that serve people and tasks||Restricts autonomy and creativity, erects barriers|
|Achievement||Values, ideas, vision, creativity||Stress, people used as instruments, inhibits dissent|
|Support||Cooperation, trust, understanding||Suppress conflict, focus on process and group norms|
The following are a few additional items you might consider for your auditing checklist:
- How deeply aware is the organization of the business environment in which it’s operating?
- What are the pertinent economic, political, social, demographic, technological, competitive, and consumer trends?
- What are the potential strengths and threats of these trends?
- What influence does the organization exercise in shaping these trends?
- How does the organization’s physical structure affect the organization’s culture?
- What about the structure, predominant management style, and communication practices will require change to affect overall organizational alignment?
- Has there been any recent assessment of the organizational culture?
- What was the purpose of the assessment?
- What did top management learn from the assessment?
- Were there action items created from the assessment findings?
- What has resulted from the actions taken?
- Did the actions effect any change in the culture? If so, what? How effective?
- If the assessment created a negative impact, what were the impacts? Was/is any further action planned? What and when?
- If no recent culture assessment is available, is it feasible that several key improvements under consideration (e.g., ISO certification, lean Six Sigma initiative, merger, new product/service launch, etc.) can be discussed by management within the context of whether the organizational culture would impede progress toward improvement?
- Are the following basics in place and well-communicated to all employees:
- Organization’s vision, mission, and principles of practice?
- Organization’s strategic plan (goals), strategic objectives, and strategic action plans?
- Organization’s key policies, procedures, work standards, and work instructions?
- Is there available adequate funding and other needed resources to launch the investment in organizational alignment?
Consideration should be given when an organization appears as networks of feedback loops that are too complex for an individual or group to see the total picture. Within this context, actions are often regarded as emergence-oriented (random) rather than planned. The key is to get the best of both approaches by coordinating disparate initiatives and aiding people to see where possible linkages can be made. Alignment involves knowing and understanding an organization’s purpose, then ensuring that every employee’s performance contributes to achievement of the strategy.
If employees’ perceptions of an organization’s strategy are clouded by the way people are treated or management practices counter espoused values, those perceptions can seriously alter employee motivation. Everyone must be pulling in the same direction for alignment to succeed. In the majority of organizational alignment initiatives, people’s behavior will require change. This is especially critical with senior management, who must be perceived as the role models. Studies have been conducted and published, many of which focus more on providing incentives (awards, prizes, contest, etc.) to stimulate change. What is lost in so many of these studies is the realization that tacked-on incentives won’t create lasting change. It’s behavior change that has the greatest potential for lasting change—starting from the top. Behavior change involves extensive training and an organizational policy “flip” to change from a punishment approach (looking for what’s wrong) to a recognition approach (looking for work done well). Assuming that “flip’ is needed, it’s a major culture change, and it could take three or more years to become the new modus operandi of the organization.
Woven into the concepts to embrace is empowerment. Empowered organizations typically respond more quickly to ideas and suggestions and, depending on the boundaries set, enable people to make decisions without relying on upper management. The benefits can outweigh the risks; however, empowerment without alignment with strategy and information can backfire.
Assessing and adjusting competencies so that they are continually aligned to the business strategy supports the likelihood of people’s behavior being aligned with the business needs. Periodic analysis to surface needs for acquiring new competencies and continually improving still critical competencies is essential to alignment. Competency embodies knowledge, experience, skills, plus attitude, and aptitude. These are the KESAA factors. (See article eight of the series in the March–April 2011 issue of The Auditor for more information.)
An overall view of culture is it’s the way we do things around here. It’s a combination of the way employees (including management) behave, their beliefs, values, and the assumptions they share. Such assumptions are often so embedded that they become invisible when change threatens them. Even highly successful organizations can experience some bumps in the road as they encounter resistance to change. The general manager of a client organization once said to me: “I sort of like your recommendations and would like to help you bring them to fruition. But until you convince our vice president to changes his ways, my hands are tied.” My task became a three-year process of gradually guiding the change of the vice president’s behavior and the division’s organizational culture. This division of a major corporation moved from last place among the company’s divisions to number one. The organization and its people were aligned and pulling together for the benefit of all. Even the most beneficial changes require organizational alignment to be bought into and successfully implemented.
About the author
Russell T. Westcott is an ASQ Fellow, Certified Quality Auditor and Certified Manager of Quality/Organizational Excellence. He is editor of ASQ Certified Manager of Quality/Organizational Excellence Handbook, Fourth Edition and a co-editor of the ASQ Quality Improvement Handbook, Third Edition. He authored Simplified Project Management for the Quality Professional (ASQ Quality Press, 2005), and Stepping Up To ISO 9004:2000 (Paton Press, 2003). He is active in ASQ’s Quality Management Division and the Thames Valley (CT) section management.
Westcott instructs the ASQ Certified Manager of Quality/Organizational Excellence refresher course nationwide. He writes for Quality Progress, The Quality Management Forum, The Auditor, and other publications. He is president of R.T. Westcott & Associates, founded in 1979, based in Old Saybrook, Connecticut.