Alignment without agility creates a slow, unresponsive bureaucracy.  But agility without alignment creates chaos.

High-performance organizations keep these two (seemingly opposing) objectives in a dynamic tension.

There are some practical actions that leaders can take to create an organization that is both aligned and agile, including:

• Flatten the organization. The more management layers an organization has, the slower it becomes.  We’ve seen structures where a Vice President supervised just two directors … and each director had only two managers … and each manager supervised only three employees.  Imagine getting a decision made in that bureaucracy!

• Create smaller units. At Dell and Gore, they prefer units with less than 100 people.  When a unit grows beyond that, bureaucracy creeps in, formal controls replace interpersonal networks, and silos emerge.

• Shorten the planning cycle. In today’s turbulent times, it is silly to create a “5 year strategic plan.”   Therefore, we advise clients to implement a rolling 18 month plan, composed of 6 discreet quarters.  This ensures that the planning horizon is greater than the current fiscal year, but allows progress to be monitored in 90 day increments.

• Push decision-making down. Highly centralized structures are often implemented to give the CEO total control over decision making.  These are often created because of a lack of trust.  And far too often, the CEO becomes the bottleneck, preventing the kind of market and customer responsiveness that today’s economy requires.

The Shift Points blog is designed for Fast Lane leaders who want to leave their competitors in the dust.

Shift Your Thinking … Accelerate Your Results.

Last week, my partner Clay Parcells and I spoke on the subject of Extraordinary Leadership to a group of CXOs.  Clay spoke about the extraordinary times we are living in, and how they demand new kinds of leadership skills.

I spoke about translating extraordinary leadership into extraordinary organizational performance.  Here were the key points from my talk:

• First, senior leaders must define the organization’s vision, strategy, and goals with far greater clarity.  In today’s turbulent times, casting a vague vision just won’t work.  People need to know exactly where the organization is going, and why.

• Second, senior leaders must communicate the vision, strategy, and goals with far greater frequency.  In our experience, senior leaders under-communicate by a factor of ten.  In advertising, we measure reach and frequency.  Executives would be wise to do the same.

• Third, senior leaders must make a more convincing case for the vision, strategy, and goals.   Just because you have explained them, doesn’t mean that people have bought them.  Many leaders assume and presume, often incorrectly.

• Fourth, senior leaders must really walk the talk, and must not tolerate any destructive, undermining behavior.  They must act as One Team.  Research shows that people are very skeptical of senior leaders, and as our mothers always told us, “actions speak louder than words.”

• Finally, senior leaders must “pull all the alignment levers.”  Everything in the organization must be brought into alignment with the vision, strategy, and goals.  They must systematically and rigorously root out all forms of “organizational hypocrisy.”

The Shift Points blog is designed for Fast Lane leaders who want to leave their competitors in the dust.

Shift Your Thinking … Accelerate Your Results.

Recently, I took my new BMW 335i into the shop to have an upgraded suspension installed.

Why would you throw out the brand new suspension of a BMW and replace it with a new one?  Because I was not satisfied with the handling and performance.

The experience provided many interesting lessons for leaders interested in improving the performance of their organizations.

First, a suspension, like an organization, is an integrated system, comprised of dozens of interrelated components.   You can’t change one component of the suspension (like the shock absorbers) without impacting all of the other components.  Likewise, you can’t change one component of an organization (like compensation) without impacting all of the other components.

Second, a suspension, like an organization, is architected and engineered to accomplish a specific purpose.  My BMW is my daily driver, not a race car.  Thus, the suspension package I selected was designed to dramatically improve handling and agility while maintaining a reasonable ride quality.  Likewise, organizations are architected and engineered to execute a specific strategy.  As we always say, strategy precedes structure.

Third, a suspension, like an organization, must be aligned.  Interestingly, my brand new BMW was significantly out of alignment.  Once the new suspension was installed, the car was re-aligned … and the results were amazing.

More on the concept of aligned agility next week.

And if you are interested in learning more about my suspension upgrade, you can go to:

www.atspeedmotorsports.com – the shop that did the work for me

www.dinanbmw.com – the supplier of the upgraded suspension system

The Shift Points blog is designed for Fast Lane leaders who want to leave their competitors in the dust.

Shift Your Thinking … Accelerate Your Results.

I just returned from 10 days in Italy, including a visit to Venice – the city with no roads and no cars.

Venice has no road, no cars, but does have a Ferrari store.  Which was packed.

It is an amazing tribute to the power of the Ferrari brand that the city with no cars has a Ferrari store.

The store’s prominent feature was a red (of course) Ferrari Formula 1 car on display.  The store sold T-shirts starting at 40 euro, scale models of Ferrari cars, Ferrari sneakers, Ferrari hats, Ferrari luggage, Ferrari gloves, Ferrari pens, Ferrari sunglasses, Ferrari flags, and much more.

There was even a children’s section that sold Ferrari onesies, Ferrari baby shoes, and all sorts of other items to indoctrinate your child into the faithful.

I happened to be there on the weekend of the Formula 1 race at Monza Italy – the home of Ferrari.  The Ferrari Scuderia (Italian for stable) won the race, and the entire nation celebrated the win.

Very few brands achieve icon status.  Fewer still achieve the kind of fanatical evangelicalism of Ferrari.

The Ferrari brand and image has been carefully cultivated through incredible discipline … or what we have been calling brand cohesion.

So, as you contemplate building your brand, apply the Ferrari discipline, and maybe someday you’ll have fans buying your flags in a city with no roads.

The Shift Points blog is designed for Fast Lane leaders who want to leave their competitors in the dust.

Shift Your Thinking … Accelerate Your Results.

As we have been discussing, job one of the senior executive is to get everyone aligned to execute the vision, strategy, goals, and roadmap.

But the big problem with alignment is that it “leaks.”

The Chief Executive is obviously the most aligned person.  After all, they are normally the one who designed the vision and strategy in the first place.  (If your CEO is not aligned with their own strategy, it might be time to head for the door.)

The executive team is next … and based on our research, they are 10 – 30% less aligned than the Chief Executive.  This leakage is significant, and is often the root cause of many organizational problems.

There are many reasons why this happens.  For example:

• The CEO developed the strategy unilaterally, and the executive team was not engaged in the process.

• The strategy was not communicated often and convincingly enough.  The organization has a strategy, but people don’t really know it exists.

• The strategy is not clear … and the executives simply don’t understand it.  The confused mind always says no.

• Finally, sometimes there is significant dissension in the executive ranks.  They simply disagree with the strategy, and rather than leave the organization, they have stayed around to undermine it.  Of course, this is the most dysfunctional behavior of all.

And it is critical to get the executive team aligned, because they set the bar for their teams.  Based on our research, employees are 10 – 30% less aligned than the senior executive they report to.  This can lead to a 50% gap between the CEO and the employees.

So leaders, if you want to improve organizational performance, you need to plug the leak.  More on this process next week.

The Shift Points blog is designed for Fast Lane leaders who want to leave their competitors in the dust.

Shift Your Thinking … Accelerate Your Results.

As we covered in the last post, aligning employees to execute the strategy is “job one” for every leader.   But this is a lot harder than it sounds.

Some more root causes of misalignment:

1. Management by best seller. Some organizations are part of the “Strategy of the Month Club.”  Every time the CEO reads a new book or attends a new seminar, there is a new initiative.  This kind of herky-jerky leadership makes employees reach for the barf bags.

1. Rapid executive turnover. The average tenure of a CEO is 2 years, which creates an environment where people are afraid or unwilling to commit.  They think, “this too shall pass,” and simply wait on the sidelines.  They give the new leader reassuring lip service, but never really commit.

1. Macro forces. We live in an era of unprecedented change and turbulence … throwing many good companies back on their heels and causing major disruptions.  Mergers, acquisitions, spinouts and rollups might make money for investment bankers, but they wreak havoc on culture and organizational alignment.

1. Human nature. People are, by nature, selfish.  They are hard-wired to want it “their way.”  And this seems to be getting worse:  Gen Xers are called the “ME” generation.  The Time Magazine Man of the Year” was “you.”  It now takes 6 words to order a cup of coffee … people want it their way.

1. Growth. The larger you get, the harder it is to align.  The more locations you have, the harder it is to align.  The more business units you have, the harder it is to align.  The more languages / countries you do business in, the harder it is to align.  The more time zones you do business in, the harder it is to align.

The Shift Points blog is designed for Fast Lane leaders who want to leave their competitors in the dust.

Shift Your Thinking … Accelerate Your Results.

Alignment is the optimal state where all elements of an organization – vision, values, strategy, people, and processes are aligned with each other to achieve optimal results.   Executives walk the talk.  Customer commitments are met.  Nobody drops the ball.

Peter Drucker says, “The task of leadership is to create an alignment of strengths, making our weaknesses irrelevant.”  We have been studying this issue for years, and have identified several root causes of misalignment, including:

1. Dysfunctional executive teams. The top leaders set the bar for alignment. They can’t expect their people to be aligned if they are not aligned themselves.   John Maxwell calls this, “The Law of the Lid.”
2. Poor leadership. Certain leadership styles (Dictatorship) breed distrust, resentment, and resistance.  People resist change when it is imposed on them.   Unilateral visions are not broadly owned.
3. Low trust. Employees lose trust in their executive team and thus never fully commit to the strategy.  In addition, many organizations have broken their promises to employees, many of whom now believe that their companies won’t hold up their end of the bargain.
4. Unclear strategy. Some organizations never clarify their strategy enough to be helpful.  People want to align … but are not sure what to align around.  People don’t really understand the strategy, and how their job contributes to the big picture.
5. Unclear benefits. People won’t buy in if they think that they will come out a loser in the deal … self-preservation trumps common good.  They also want to be in control, they want to do their own thing their own way.

Stay tuned next week for five more.

The Shift Points blog is designed for Fast Lane leaders who want to leave their competitors in the dust.

Shift Your Thinking … Accelerate Your Results.