THE IMPACT OF ALIGNMENT - Pursuit of Excellence Inc€¦ · maturity, capacity planning, line balancing, cross-training, etc. become operational imperatives. However, in a world-class

Copyright © 2015 Pursuit of Excellence. All Rights Reserved Page 2

POEHR.COM

POE Point of View Brief

Excerpted from the POE Strategic HR Training Series

THE IMPACT OF ALIGNMENT Aligning Performance Objectives with Strategic Imperatives and Corporate Goals

By Mark A. Galvan

INTRODUCTION

What you can expect from this information

We recognize that everyone, regardless of their leadership

role or operational responsibilities, is in a different place on

their journey. Therefore, we expect also that every reader

will take away something different from this information.

We hope that you will be able to use and benefit from one

or more of the following.

Ignite in you a passion and enthusiasm over the

opportunity to make strategic impact as a leader or

talent management professional, particularly if you are

already effectively utilizing some of these tools.

Provide you a high-level contextual understanding of

the relationship between all of the tools used to create

alignment.

Remind you of methodologies and strategies you have

previously been exposed to but perhaps unable to

focus on or effectively deploy within your organization.

Introduce some possibly new ideas or tools which will

help you make significant strategic impact.

Provide potential content and support for those of you

who need to create the business within your

organization to focus greater attention on

organizational alignment at any level.

What you should not expect from this information

A volume this brief cannot possibly cover all of the

concepts and ideas included in this resource. Our purpose

for producing this overview was to drive discussion and

increase attention on the dynamics needed to create

organizational sustained change. Human resources and

talent management professionals have long been

considered a cost center in most organizations - the “back

office” and “non-revenue generating.” A growing number

of industry professionals are collectively changing this

perception specifically by producing strategically valuable

contributions to the organizations they represent. Few

contributions have a greater impact than increasing the

understanding of organizational alignment and cultivating

the necessary cultural change to generate alignment with

corporate strategic goals and objectives.

How this information is organized

First, the beginning of every journey should start with the

end in mind. We will briefly cover the business case

fundamentals which collectively create the “why” - the

measurable tangible and intangible benefits of creating

organizational alignment.

The pace will pick up and we will define and describe

several methodologies currently used by world-class

organizations globally. We will place each of them in

context with each other to create a model in sequence for

implementation. Because of their implicit

interdependencies, the sequence becomes a mission critical

aspect of deployment.

The following core topics will be covered quickly to paint

the broader picture of how organizations create alignment.

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SETTING THE STAGE: The Research, the Why and

Beginning with the End in Mind

KEY ACTIVITY: Making Change Happen

KEY ACTIVITY: Align Performance with Goals

KEY ACTIVITY: Connect S.M.A.R.T. Goals and Business

Alignment

KEY ACTIVITY: Ensure Performance Management

Includes Gap Analysis and IDPs

SETTING THE STAGE: The Research

Overview of Research Studies and Findings

There is an increasing volume of third-party research that

qualifies and documents the impact of strategic human

capital management and specifically, organizational

alignment. The following are examples of such independent

research which may be useful to gain consensus, drive

adoption and increase uptake.

Corporate Research

Consulting firms, such as Accenture, Deloitte, McKinsey &

Company and others have numerous published case

studies from institutional research which define high

performance and reveal the core frameworks behind

sustained high performance, where high performance is

measured by the efficient utilization of resources in the

achievement of organizational goals and objectives.

A growing number of large organizations are publishing the

results of internal baselining efforts and the subsequent

measurement of business unit performance improvement

following re-alignment initiatives. Raytheon’s internal

Corporate Leadership Council Study on organization

strategy and design reviewed key components of internal

variables which have significant impact on performance

improvement. Findings helped re-define what a high

performance “looks like” internally and where to make

investments that have measurable impact on the

achievement of corporate goals.

Harvard Business School Research

Numerous articles, case studies and chapters published by

HBR are available to support assertions that growth in

revenue, employment, stock price and net income are

significantly higher for organizations with performance

enhancing cultures where performance objectives are

aligned to corporate goals and objectives.

Industry Research

The Society for Human Resource Management (SHRM) and

similar industry groups are joining the cause to re-cast

human capital management as more than a transactional

back office function by highlighting findings which are

consistent with other sources of research. Published

research confirms that highly successful companies a)

utilize performance-based rewards, b) establish clear

employee goals, c) cultivate a participative leadership style

(which helps drive “line of sight”) and d) place attention on

development to a far greater degree than less successful

companies.

SETTING THE STAGE: The Why

Find the Burning Platform

In an environment of digital information overload and

bright shiny objects disguised as opportunities everywhere,

there has never been a more urgent need for

organizational alignment than today.

The use of remote team members and distributed

workforces in global locations only increase the demand for

highly visible goals and objectives which are measurable

and in alignment with corporate goals and strategies. The

larger the organization, the greater the likelihood for siloed

operations, communication and leadership. These should

be sufficient drivers for attention and focus on the

alignment of resources, particularly human talent which is

usually the largest expense in any organization. Global

focus on lean operations, the elimination of waste and the

effective use of skills underscore the increasing demand for

high productivity and decreasing cost. Again, these should

be key drivers and influencers forcing the prioritization of

organizational alignment initiatives.

However, the reality is that these internal and external

influences typically only serve as a catalyst for local

optimization or point solutions as managers and leaders

focus only on their own unit’s profit and loss numbers.

Someone needs to create the burning platform. Someone


needs to show that the status quo is as dangerous as

sitting tight on the burning platform because of fear of

jumping in the water. Someone needs to show that survival

requires change. W. Edwards Deming said it best, "It is not

necessary to change. Survival is not mandatory."

All this means that in your organization, you may be the

needed champion to re-align focus and drive change.

The Case for the Strategic Human Capital

Management 1

Talent management is a journey. Operationally immature

organizations are just trying to get the job done and stay

profitable. As businesses scale and develop operational

maturity, capacity planning, line balancing, cross-training,

etc. become operational imperatives. However, in a world-

class organization, organizational alignment influences the

goals and objectives of every level within the corporate

ecology. By the time you finish reading this, one or more

light bulbs may come on as the talent supply chain is

connected between operational responsibilities and

corporate vision and mission.

To develop the business case for why the re-engineering of

performance objectives is critical to growth and

survivability, consider the following.

Improve the percentage utilization of talent

Increase productivity with focus on the right things

Reduce total cost of operations through elimination of

non-supporting activities

Improve market competitive position through

customization of delivery model

Improve survivability through efficient use of resources

and improve profitability

Improve service delivery and client satisfaction due to

customer focus

Develop more integrated organizational units and

break down silos

Align corporate culture and organizational values with

the most important things

Improve employee engagement with increased sense

of purpose and line of sight to vision and mission

Create link between individual objectives and personal

performance

Identify individual capability deficiencies

Create bridge between capability gaps and individual

development plan (IDP)

Create link between client expectations and delivery

capability

Create objective rating method for peer group

Create career paths in alignment with organizational

goals

Does Your Organization have the Essential

Characteristics of Strategic HR?

The following represents an incomplete list of critical

characteristics common within a talent management

function which is strategically connected with

organizational goals and objectives. Use the list to identify

where your organization is on the journey to world-class

talent management.

Respect – Cultivates a philosophy underpinning people

management

Value – Sees people as a competitive resource

Tactical – Utilizes a planned approach to human capital

utilization (Numbers, Skills, Potential)

Equity – Adds long-term rather than short-term value

Cohesive – Brings together and integrates multi-

faceted activities

Comprehensive – Covers the entire operation (at

business unit or corporate level)

High Value-added – Focuses on business critical issues

Social Capital – Drives knowledge sharing, networking

and relationships

Anticipates Change – Monitors the horizon for change

and uses internal sensing to monitor changes in

culture

SETTING THE STAGE: Beginning with

the End in Mind

The Destination Postcard

This is the starting point of our journey. We begin with the

end in mind.

The business, agency, non-profit organization or institution

you represent was established for a reason. That's the

Vision – to make a difference.

Your organization has specific ideas of how to make a

difference – that's the Mission.

How is it going to make that happen? That's the Strategy.

Regardless of where you fit into the talent supply chain –

from the visionary to the business unit leader to the

supervisor to the subject matter expert – you have an

obligation to align your activities and manage and direct

resources within your control to align with the

organization’s Mission and Vision. It is a lot easier to

understand than execute – but elegant when achieved.

This is what the 30,000 foot picture looks like when

executed properly:


KEY ACTIVITY: Making Change Happen

The Change Management Foundation

If you have any books on change management, you

probably have a bunch. There are volumes and volumes

written on techniques and methods to effectively

communicate, build urgency, improve adoption, increase

the likelihood of sustained change, etc.

We won't unpack it all here but change management is

more than just a trivial mention in the context of this

conversation.

The same way a building requires a foundation to stand up

and survive the elements over time, whatever you build

and whatever changes you implement are more likely to

endure and have meaningful impact if there is a strong

foundation made up of several components.

Too frequently, we initiate projects without a foundation in

place – like building a house on the mud.

Someone convinces us that "quick wins" are the way

to gain consensus.

Leadership needs tangible results for socialization at

the C-level.

An irate customer threatens to terminate a relationship

unless there are immediate changes.

The larger initiative needs to show immediate progress

to make up for a delayed start.

The list never ends.

Because organizational alignment will impact so many

dimensions of your business, a foundation of change

management and its required components is essential to

achieve measurable long-term benefits.

John Kotter, Konosuke Matsushita Professor of Leadership,

Emeritus, at the Harvard Business School, provides a well-

known 8-step approach for an effective change

management plan. 2 3


Kotter’s 8 Steps to Change

1. Establish a Sense of Urgency

2. Form a Powerful Guiding Coalition

3. Create a Vision

4. Communicate the Vision

5. Empower Others to Act on the Vision

6. Plan for and Create Short Term Wins

7. Consolidate Improvements and Produce More

Change

8. Institutionalize New Approaches

The model below illustrates another approach utilized by a

major international corporation.

Change Management

Regardless of the approach you take or the model adopted

by your organization, you need to ensure that sufficient

time and energy is invested in properly executing this layer

because it is foundational to long-term success.

Even in a small business of 20 to 30 people, there are

forces at work to erode your impact and neutralize any

changes which are poorly understood or worse, perceived

as threatening.

What does a successful change management plan look

like?

Clear Vision – why are we doing this?

Sense of urgency – why is this important?

Communication – who needs to know, when do they

need to know it, what do they need to know?

Buy-In – Do we have the right people involved? What’s

in it for me?

Measuring Success – How do we know it worked?

An architect never invites guests to tour a new building at

a ribbon-cutting ceremony because he is excited about

showing off the foundation. The excitement is over what

sitting on top of the foundation. This is an essential thing

to understand. Digging basements and laying foundations

is dirty work. But nothing can successfully be built without

the preparation. This concept is well illustrated by Jim

Collins in his popular book, Good to Great. Collins

emphasizes that everything prior to "breakthrough" is all

under the surface, unseen and unnoticed. 4

Foundation-building is not sexy work. It is hard work. But it

is essential work.


KEY ACTIVITY: Align Performance

With Goals

Hoshin Kanri means both Alignment and

Management

Hoshin kanri (also called policy deployment, hoshin

planning, or hoshin) is rooted in Japanese lean

manufacturing concepts and principles. The fundamental

concept of hoshin kanri is a balance between alignment or

planning and performance management.

The combination of alignment and management with

feedback through all levels is what differentiates hoshin

from other management methods.

Alignment

The way a large boulder of granite decomposes over time

into sand is good metaphor for how the large Vision,

Mission and Strategic Corporate Goals are broken down

into their smallest components.

Corporate annual planning exercises are not likely to

change the Vision and Mission of your organization. The

strategy may be reviewed. But at the next level, constant

re-evaluation of how the strategy is deployed ensures

course correction based on key market influences, such as

the bargaining power of suppliers, the bargaining power of

customers, the intensity of existing rivalry, the threat of

substitutes and the threat of new competitors.

After the annual market review and the re-evaluation of the

evolving competitive market, the majority of time is likely

to be invested in assessing progress and refining goals and

objectives – by business unit, by product or service line, by

geography, etc.

Goals and objectives still cannot be established for

individual team members until the higher level business

unit goals are translated into actionable objectives for

teams. For example, consider the model below.

Executive leadership initiates the decomposition process to

break down the corporate strategies into actionable goals

and objectives for each level of the organization. This

exercise, in this sequence, forces each of the business

functions to align with the overall mission of the

organization. 5

Perhaps you have seen organizations which have not

released goals and objectives until more than half-way

through their fiscal year. This occurs because of the lead

time, delays and effort required at the highest level to

ensure alignment. This is never acceptable. To avoid this, it

is imperative that there are clear owners for the

decomposition work at each level to ensure accountability

and efficient progress.


Eventually, this hoshin kanri decomposition process will

translate into individual objectives for every member of the

entire organization. Not every individual team member will

have duties and responsibilities which have influence on

every higher level goal or objective, nor is this necessary.

However with hoshin kanri, every individual team member

is being given the ability to see how their individual goals

and objectives now influence team goals which influence

business unit goals which influence...and so on.

Management

Hoshin kanri is a verb. It is iterative. It is dynamic. Once

enabled, kanri or management now provides feedback and

makes progress visible. However, effective management is

only possible if the right performance measures are

identified.

The following attributes should be considered in the

selection of effective performance measures:

Are they quantifiable and can they be illustrated

graphically? ("Okay" cannot be illustrated.)

Are they representative of the voice of the customer?

Are they leading (predictive) or lagging metrics?

Are they truly key performance indicators (KPIs) and

crucial to successful outcomes?

Are they balanced between key performance factors

such as quality, cost, speed, engagement, satisfaction,

compliance, etc.?

Is the data complete, accurate, timely and available?

Again, hoshin kanri should be used as a tool to keep team

members and teams on track and moving in the direction

of pre-determined goals. Much the same as an airliner

which leaves New York headed for Los Angeles is actually

pointed in the wrong direction more than 99% of the time.

However, through the action of the auto-pilot's continuous

course correction capability, the plane eventually reaches

its target with minimal wasted resources or time.

Another useful metaphor for this form of performance

management is the guard rails used when children or

beginners are learning to bowl a bowling ball. The guard

rails flip up on both sides of the bowling lane to ensure the

ball does not fall into the gutter. The guard rails do not

serve to penalize the new player but rather to ensure

success. In the context of organizational performance, this

perception is critical since most performance management

is deployed in an effort to penalize for non-performance

and create support for punitive action.

Kanri, management or “course correction” should have a

rhythm or cadence best determined by the nature of the

work. If a monthly view of progress is too infrequent to

make necessary adjustments to ensure an acceptable

status at month-end, the frequency should be more often,

such as weekly.

In this scenario, a weekly review of progress against goals

is sufficient for a supervisor to monitor performance.

However in this scenario, it is even more important to

provide team members a daily view of progress against

goals so they have a chance to course correct prior to the

weekly supervisory review of the data. This is another

critical component of hoshin kanri. Because of the respect

for people and the need to empower team members at all

levels to achieve goals and objectives, visibility must be

provided with greater regularity to the team members who

have the ability to influence the numbers.

The disciplined implementation of hoshin kanri in alignment

with corporate goals helps organizations is extremely

powerful. Additional benefits include,

Developing a focus on common shared goals across

the enterprise

Driving awareness and understanding of those shared

goals

Engaging leaders at all levels in the planning and

deployment process increasing ownership

Creating a culture of accountability at all levels for

achieving their part of the shared goals

KEY ACTIVITY: Connect S.M.A.R.T.

Goals and Business Alignment

Making Performance Objectives Relevant

The journey to implement organizational alignment is

nearly complete. We have now moved to the level where

the value-added work is being performed for customers.

Whether you are manufacturing a product or a knowledge

worker delivering a professional service, goals and

objectives at the individual level are not only meaningful

but predictive of future results.

Like the airplane traveling from New York to Los Angeles,

direction setting is critical so the pilot doesn't suddenly see

the lights of Phoenix, Arizona in the distance. For team

members producing value-adding products and services,

focus on the wrong objectives can have painful

consequences – like flying in the wrong direction.

Leaders, managers and supervisors must exercise caution

to ensure that performance goals and objectives align to a

team level objective which aligns to a unit level objective

and so on.


A common approach to setting individual objectives is to

identify “S.M.A.R.T. goals.” While there are a few different

conventions for the definition of S.M.A.R.T., the process is

still effective.

The acronym S.M.A.R.T. however, simply identifies key

attributes of any specific objective. It does not help identify

where to look for a relevant and aligned objective. It is

equally, if not more important, to explore the need for

measurable objectives in more than one key dimension.

In setting corporate goals and objectives, executive and

senior leadership should have already by this point in the

process considered,

The Voice of the Customer

The Voice of the Business

The Voice of the Employees

The Voice of the Future

Now at the supervisor-team member level, the dimensions

which are critical include at least,

Cost

Quality

Speed

Satisfaction

Engagement

Compliance

Occasionally additional goals are assigned outside the

hoshin process. These could include,

Aspirational Goals – Lofty goals without clear

plans for achievement

Stretch Goals – Assignments or performance

levels which will take exceptional effort to achieve

Next Level Goals – Work assignments which are

normally associated with a position one rank

higher and frequently used to prepare team

members for promotion at any level

Etc.

By now, individual performance goals should be not only

specific, measurable, etc. but also aligned to corporate

goals. Additional goals and objectives are only appropriate

after core goals and objectives are established and

operationalized to ensure the achievement of corporate

goals.


KEY ACTIVITY: Ensure Performance

Management Includes Gap Analysis

and IDPs

Establishing the Feedback Loop and Planning for

Course Correction

We now have, for the moment, perfect alignment between

corporate goals and individual team member objectives.

However, for many reasons, adjustments will need to be

made and feedback given to team members to drive course

correction as needed. So our implementation is incomplete

without the ongoing measurement and feedback process.

The measurement, feedback and course correction process

incorporates several components.

Identifying and Communicating Required

Performance

Measurable and specific performance goals and objectives

include performance factors needed to be successful in any

given role. These performance goals are imperatives;

because, failure to meet objectives will have other negative

impacts.

The S.M.A.R.T. goals and objectives now must be tracked

in a way that shows trending. In aggregate, these metrics

produce several varieties of scorecards.

Balanced Scorecards will account for several

dimensions such as financial, satisfaction, quality, etc.

Operational Metrics Scorecards may focus primarily on

cost, quality, speed, compliance, etc.

Individual Score Cards are the progress reports used

for tracking individual achievement against goals and

objectives and reviewed at least weekly and no less

than monthly with individual team members.

The multi-dimensional scorecards now provide visibility into

performance gaps which could be revealed in any area and

provide key input for appraisals. While performance

appraisals are commonly used, many are not well used. An

effective assessment or appraisal will incorporate input

from the manager or supervisor as well as the individual

themselves. The information presented will not be purely

anecdotal, but include trend report data from the

scorecards which show performance over time against

predefined goals.

Unfortunately, this is where most appraisals stop. If data

exists, it's used to support the quarterly or annual rating,

such as,

Significantly Exceeds Expectations

Exceeds Expectations

Meets Expectations

Does Not Meet Expectations

Our commitment to organizational alignment does not stop

however with regular feedback. Planned development is

now essential

in order to close individual performance capability

gaps

in order to achieve individual performance goals

in order to achieve team goals

in order to achieve business unit objectives

in order to achieve strategic goals

In order to achieve the corporate mission.

Hopefully another light bulb came on. Course correction is

not just the adjustment of goals and objectives but also the

commitment to improve capability where needed. The flow

of information and performance now moves both

directions.


AN ELEGANT SOLUTION: An Aligned

Organization is Optimized

An aligned organization now incorporates many concepts

and methods into a machine that is optimized on many

levels.

Executives are focused on the critical few goals which most

strongly influence the achievement of the corporate

mission.

Managers and supervisors benefit from team members who

are focused on achieving goals and objectives which are

aligned to their own goals and objectives.

Individual team members develop an appreciation for how

their role contributes to the achievement of the mission

and vision of the organization.

The organization eliminates wasted time, effort, materials,

money, etc. by knowing what to say yes to. The focus on

the critical few important metrics crowds out noise

generated by many other factors which in many

organizations normally receive unmerited attention.

What is the result of this elegant and

aligned organization?

IMPACT


About the Author

Mark Galvan is the President and Chief Strategy Officer at Pursuit

of Excellence, Inc. Mark joined Pursuit of Excellence in 2011 to

build on nearly 20 years of experience in outsourcing including

staffing, payroll, HR, talent management and back office

operations. Prior to joining Pursuit of Excellence, Mark was

Accenture’s North American HR and Payroll Outsourcing Lead,

supervising a team of over 250 HR, payroll and benefits

professionals. Mark’s achievements include the architecture of an

org-wide transformation plan focused on organizational design and

development to improve leadership, culture, performance and

competitive capability. Mark brings to clients top-down strategic

thought leadership, deep insight into operational metrics and

analytics, transformation and re-design of enterprise back office

operations and internal audit and SWOT analysis capabilities.

Connect with Mark on LinkedIn at:

https://www.linkedin.com/in/markgalvan

Download The Impact of Alignment Today at:

http://poehr.com/alignment/

Pursuit of Excellence, Inc.

10440 N Central Expressway, Ste. 1250

Dallas, TX 75231

(214) 452-7881

Copyright © 2015 Pursuit of Excellence, Inc. All rights reserved.

Pursuit of Excellence is an audit, consulting and outsourcing firm specializing in:

✰ H - Human Resource Risk Management and Outsourcing

✰ O - Organizational Design, Development and Coaching

✰ P - Payroll Administration and Outsourcing

✰ E - Employee Benefit Administration and Employee Recruitment

Pursuit of Excellence is part of the 2014 Inc. 5000 list of the fastest growing companies in America: http://www.inc.com/profile/pursuit-of-

excellence

https://www.linkedin.com/in/markgalvan

http://poehr.com/alignment/

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Documents

THE IMPACT OF ALIGNMENT - Pursuit of Excellence Inc€¦ · maturity, capacity planning, line balancing, cross-training, etc. become operational imperatives. However, in a world-class