Integrated Project Management Company, Inc. (IPM), a business consulting firm that helps companies achieve their most strategic and ambitious goals by applying deep subject matter…
By C. Richard Panico, President & CEO, Integrated Project Management Company, Inc.
Organizational alignment just doesn’t cut it anymore. To succeed in an ever-more-competitive, always-changing environment, executives must drive toward a more optimal state: Organizational Convergence®.
Executive leadership, first and foremost, is responsible for establishing a vision that represents prosperity for the enterprise, its employees, and equity owners. Congruent with this is the responsibility to establish a well-structured and insightful strategy that logically and clearly defines the course to be followed to progressively advance the organization and its capabilities toward the vision.
The course is further defined by leadership’s identification of Strategic Imperatives, that is, those few essential actions or requirements deemed critical to progression. To measure progress, Strategic Goals are established. In a well-structured strategic planning scenario, the Imperatives and Goals are communicated to the next level of management and beyond to develop Strategic Initiatives (programs and projects) that most directly satisfy the Imperatives and Goals. After careful scrutiny of the recommended initiatives by the executive team, the strategic portfolio is developed.
In addition to the aforementioned, optimizing the utilization of resources, but specifically human resources, to achieve the organization’s goals should be paramount to leadership’s role. Human resources are the most valuable assets available to any company. This has always been the case, but it is becoming more and more prevalent as the qualified labor pool continues to shrink and the competition for resources increases. So, this is our reality: strategy, regardless of how well-crafted and potentially beneficial, cannot be executed and accomplished without human resources. Moreover, resources must be optimally integrated to achieve the maximum benefit from the potential human capacity and capabilities available. Anything short of tapping the optimal resource potential results in inefficiencies, extended timelines, and typically partial implementation of the strategy.
As we know, strategy implementation must occur in concert with maintaining essential daily operations. The challenge is to continue to satisfy existing customers and obtain new ones, while evolving the model and processes to support future vibrant growth. Our reality is that we have to “fly the plane while modifying it” to be able to be able to fly higher, faster, and reach more lucrative “destinations” or be able to sustain and withstand more challenging and potentially damaging competitive and/or market headwinds. This is not a small undertaking, even for the best of organizations. To get the job done, we need our people… mind, body, and spirit. How do we do this? Often, this effort, or at least part of it, is referred to as organizational alignment. The term and concept have been around for a very long time, yet so many organizations still struggle with effecting what the term implies: getting everyone to understand and contribute to the company’s near and long-term objectives. Based upon multiple studies and surveys of CEOs, organizations’ ability to execute the intended strategy reliably is dismal.
Organizational alignment is a good concept and objective, as we need to get people “on the same page.” The reality is that alignment, at best, establishes an understanding of the direction designed for the company but often fails short in establishing context, which is critical to engaging individual members of the organization. This lost opportunity is rarely, if ever, measured. However, no one would argue the benefits of fully engaging every member of the organization in achievement of both near- and long-term objectives.
For my entire career over four decades, I’ve been observing organizations pursue different approaches to achieve organizational alignment. I’ve often wondered how many of them were able to measure whether they had achieved or were even making progress toward alignment. In business, we have become more and more focused on collecting data and information and measuring what we believe to be most important. It simply makes sense. We know all too well that we can’t improve what we don’t measure. The organization will respond to and focus on performance that is measured. If you accept the premise that most leadership teams believe it is important to align the organization to the company’s strategy and even more so to its strategic imperatives and initiatives, why is it that rarely are measures put in place to assess whether alignment has been achieved? Could this be one of the reasons why so many companies struggle with executing their strategies?
Another possible reason companies fail to achieve their strategies is incomplete communication. Executive teams take great pride in communicating direction through the presentation of the strategic plan. The plan is well-understood by the executive team and there is pride in its development. The communication, which in some cases is quite a production, focuses on creating an inspiring and promising message to all stakeholders. Depending on their level within the organization, these stakeholders require information at varying levels to create a contextual understanding that is meaningful and engaging. The most important objective of a strategic plan is to position the organization for success, and this requires employees’ engagement and participation. For this to occur, every precious resource must understand how his or her role can contribute to the plan and effect the desired outcomes. The ability to understand the connection between one’s role and responsibilities, regardless how tactical and minute, to achievement of the strategy establishes their strategic relevance. Therefore, communication of strategy needs to have individual and collective relevance as its primary objective, which, in turn, requires understanding what and how to communicate to the different stakeholders within the organization. Unfortunately, few organizations can claim to have achieved the level of communications and understanding that is required to engage all resources in a meaningful and productive way. If you question the validity of this statement, simply issue a survey and ask employees if they understand the strategy and can name any of the strategic imperatives, goals, or initiatives/projects that are part of the strategic portfolio. What most organizations accomplish, to some degree, is organizational alignment, that is, an understanding on the part of its members of the general direction of the company. Suffice it to state that “general direction” falls short of effecting the convergence of talent, activities, commitment, and affinity essential to tap the full potential of the organization to achieve what executive leadership has determined to be essential to the realization of the organization’s ambitions.
Organizational alignment is a valuable first step and its impact should be measured. However, understanding direction is much different than effecting commitment, contribution, and collaboration. So, how do we as leaders get all members of the “body” to work together in unison to achieve and apply maximum potential to our business objectives, both near and long term? This can be accomplished through “Organizational Convergence.” Organizational Convergence is an organizational performance state achieved when employees of the organization are integrated optimally to merge their skills, experiences, aspirations, and emotions to contribute to the company’s goals, both near and long term.
To achieve Organizational Convergence, several essential components need to be satisfied or established: Culture: the establishment of defined and enforced values and characteristics that create the guidelines for expected human behavior and interaction; Strategy: clear communication of strategy and rationale; Context: expected benefits and consequences of failure; Effort: expected magnitude of organizational effort (direct and indirect contributions); and Realization: ability to sustain performance outcomes. Think of these elements as the strands that are wound together to make up the strong rope that is Organizational Convergence.
Nothing is more important to establishing Organizational Convergence than trust in leadership. Convergence is directly dependent on creating a culture where leadership’s behaviors and decisions are consistent with established values. And these must include honesty, integrity, humility, respect, caring, and selflessness. First by example, and then by enforcing conduct compliance by all organizational members, leaders set the expectations. Skill and contributions should never take precedence over conduct. The values-based culture establishes the potential to engage people’s hearts and as well as intellects. Without trust, even the best, most articulated communications fall short of effecting engagement.
There is no better way to enlist support than by explaining the rationale for the strategy in terms everyone can understand. Outlining the sensibility of the plan based on very discrete market, competitive, economic, social, political, and other information and analyses creates understanding, establishes logic, and generates confidence.
Organizations often do a good job of communicating the benefits associated with achieving organizational objectives and goals. The benefits should be clearly expressed and, again, easily understood. This can be extraordinarily motivating, especially when achieving objectives represents new exciting opportunities that cascade through the organization. What is not often communicated are the consequences of not achieving objectives. While these should never be communicated in a threatening way, organizational members deserve to understand the downside as well as the upside. The better the understanding of potential negative consequences and risks to the business, the greater the sense of urgency. The greater the sense of urgency, the greater the probability of focus and engagement, which directly influence execution performance.
What is it going to take to get this done? The conventional approach is to communicate the cost and timelines. These simply aren’t sufficient to drive the context referenced above. How many people are estimated to be directly involved? What is the magnitude of the number of people who will likely have to contribute in some manner and degree? How many people will be directly or indirectly impacted by the execution or the results and in what manner? It is less important that these estimates be accurate than convey magnitude. What role does the extended organization have to serve to support success? Remember, there is a business to run while strategic objectives are being pursued. Will these essential daily duties be impacted, or are accommodations required to support the objectives? What level of change does the strategy represent, and what amount of change management is required to ensure success and sustainable performance?
It is critically important to define the connection between the strategy and individual roles within the organization. In some cases, this connection is clearly established; however, in most it is not. If the communication of the strategic plan is orchestrated well, managers at the various levels should be able to establish linkage between their department’s responsibilities and the strategy, and then further make the connection to everyone’s role. At times it takes some creativity to create the linkage. It is not realistic to believe that every resource in the organization is going to contribute to execution of the strategy. However, the greater the understanding of the strategy and intended outcomes, the greater the likelihood of identifying individual contributions that can support the strategy and further effect individual engagement and affinity. Often, intended organizational strategy outcomes represent greater security and more diverse career path alternatives its members. Why not capitalize on these to motivate and inspire deeper engagement?
All of the noted components, consistently applied, are essential to achieving Organizational Convergence. There are many challenges that inhibit Organizational Convergence, including: focus on short-term results, leadership turnover and behavior inconsistencies, leadership incentive plans (short-term based), recruiting for talent and not cultural fit, lack of discipline in business planning and strategic portfolio management, cultural interruptions through mergers and acquisitions, and a host of others.
What can be stated with strong conviction and confidence is that organizations that can create and sustain convergence will not only be much more successful at executing strategies, but also more likely to sustain high performance in functional roles and responsibilities. The bottom line is that “converged” organizations will be difficult to beat.
— Published September 29, 2022
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