A question that is not usually answered by management books is: what if results were not pursued, but produced themselves? In many case studies, concepts are expressed to drive growth, increase profits, decrease costs, gain market share, among other legitimate goals. While these are important and worthy of exploration, our topic is another: how a company can operate wisely and intelligently in such a state of alignment that all its employees move as one. With this approach, desired results, such as growth and profits, become byproducts of alignment, not the main objective. The advantage of this approach is that it emphasizes processes rather than results, because it is the effective operation of processes that culminates in outstanding and sustainable results. What follows describes how that state is built: first the three concepts that underpin it, and then the four pillars that make it operational.
Back to top: why an organization exists
To generate the state of alignment in a company, it is necessary to return to the basics of why an organization exists and what it intends to achieve. If by organization we mean a set of people united to satisfy a need in the market, then the way in which each organization satisfies that perceived need is unique and, therefore, pursues a unique mission.
The first of these concepts is mission. In many companies, the mission was articulated in the past, and the workforce may or may not know about it. In any case, it is often not given much attention. We place a lot of emphasis on the mission being articulated with the participation of the entire workforce, that it is clear, that it is a true catalyst for action, and that everyone understands it. The more it has to do with improving the world, the greater its intrinsic value will have in motivating employees who, in addition to receiving a check every month, will have a meaningful purpose.
The second is the vision. Once the mission is well defined and has been accepted by all, having a vision of where the organization is intended to be in five or ten years becomes imperative. The vision must be shared by everyone, not just the CEO and senior management. It must be crystal clear and inspiring. We say this because enthusiasm for the vision generates enthusiasm for understanding, which is a powerful catalyst for action. The future image of success shaped by the vision is like seeing the end from the beginning.[1] When everyone can see the end clearly, they take actions that, sooner or later, merge into a force that produces the desired effect. The vision awakens the creativity that generates seemingly impossible results.
The third concept that serves as the foundation of Total Alignment, along with the mission and vision, is the set of core values that guide the organization's progress over time. They are the guidelines of conduct for everyone. They never compromise. It is preferable for the organization to lose a good customer or employee than for it to compromise its values. That willingness to lose something valuable is, in practice, the only proof that a value is real.
In short, no matter how big or small, an organization is a collection of individuals who join forces to fulfill a worthy mission, with a vision of success in mind, and sticking to a set of core values. What we just said is not new. All readers are familiar with these three basic concepts. Virtually every organization artfully displays statements about their mission, vision, and values in the halls of their companies and on their websites. What's new about Total Alignment is that all three are at the core of everything the company does. Put another way, everything the company does aligns with the mission, vision, and values.
From the wall to daily operation
Showcasing the mission, vision, and values on websites and in the hallways of the company is, of course, necessary, but insufficient. Here are eight concrete ways in which the power of these statements can be multiplied. All three concepts generate the key performance indicators (KPIs)[2] that measure the success of the organization. They create the end-to-end processes, from sales and order entry to order delivery and post-sale support. They lead to the formulation of the strategies needed to achieve the vision. They serve as a guide to clarify, with the help of individual scorecards, what is expected of each job in measurable terms, as well as the added value of all positions. They determine the standard for measuring the health of the business in business scorecards. They require that interdepartmental responsibilities be set that break down silos. They need a continuous flow of information to track progress made toward achieving the vision. In order for the vision to be achieved, they demand that fair compensation be established that rewards the contribution of both teams and individuals. Taken together, these eight consequences make the difference between a statement hanging on the wall and a system that governs the operation.
This is neither too ambitious nor too difficult to achieve. Total Alignment should be seen as that which brings together everything that happens in a company. It has the methodology for all processes that stem from the three fundamental concepts: mission, vision, and values. The implementation of Total Alignment is supported by four pillars: vision and strategy, responsibility, information, and culture. Each one answers a different question: where we are going and for what, who answers to what, how we inform ourselves and what actions we take, and how we work and treat each other. We describe them in that order.
First pillar: Vision and Strategy
The key to implementing the vision and strategy as a fundamental pillar of Total Alignment is the Alignment Map, a simple but powerful tool that serves as a framework for action in the company. It is a map that connects the present with the future of the company, becoming a living and dynamic alignment instrument.
At the center are the company's mission, vision, and values. They shed light on the company's current operation and inspire strategies for the future. On the left side of the map is a tree of success indicators or key performance indicators (KPIs) that measure the outcome of existing processes or that need to be created to fulfill the vision. On the right side of the map is a strategy tree that has three branches: market strategies for business units or segments, support strategies, and gap-closing strategies to build the future. Strategies that are formulated on the right side through a strategic planning process become specific initiatives with project plans, milestones, and deadlines. On the right side, the progress indicators of initiatives are designated by a measurable index that we call IPE (Project Success Index).
Once developed, the Alignment Map tells the story of where the company is in the present and how it will move towards its vision over time. It is separate from the company's organizational chart. It is a document that is always kept up to date. When a new process is created aligned with the vision, the KPI that is associated with it is added on the left side. When a new strategic initiative that requires the vision is launched, it is added on the right side of the map.
It is worth dwelling on a risk that always appears at this point: the strategy may end up going against the mission, vision, and values. We caution companies that conceive market strategies on the right side of the map to stay aligned with values that often include reliability, excellence, and contributing to the betterment of the world, and to avoid including strategies that violate values. For example, a strategy to increase market share is acceptable as long as it invites the company to be more innovative, more profitable, and aware of continuous improvement. It is not acceptable if the company's financial strength is used to start a price war to eliminate rivals or to pay employees less than their contributions are worth in order to increase profits, or to distort the image of the company's products or services with misleading advertising. By compromising values for the sake of a positive short-term outcome, such strategies are outside of Total Alignment.
Second pillar: Responsibility
A map, no matter how good it is, does not move anyone as long as it is not translated into concrete responsibilities. Two questions open this second pillar: who is responsible for each indicator and who for each initiative. By implementing the Total Alignment Responsibility Assignment pillar , it is assumed that the right organizational structure is in place. Depending on how large the workforce is and the type of company, the organizational chart could have two or more levels. Connecting the Alignment Map with the organizational structure involves distributing all the KPIs on the left side and all the IPEs on the right side of the map among the company's employees. For each of the indicators and initiatives, there must be someone accountable.
For this pillar, the methodology calls for delegating the KPIs on the left side of the map to the appropriate lower levels within the organization and assigning the IPEs on the right side to the appropriate higher levels. This seeks to empower the lower levels that are closer to the front line and encourage the higher levels to be more strategic and forward-looking. The process of assigning and delegating responsibilities also includes assigning collaborative responsibilities, as the success of most KPIs or initiatives depends on the collaboration of various functions.
The result of the responsibility assignment process is the creation of individual scoreboards for all employees that combine KPIs and IPEs with primary or cross-cutting assignment of responsibilities.
Creating individual dashboards from the Alignment Map is what we call top-down assignment of responsibilities. That journey alone would leave out the voice of the person in the position. Along with this top-down process, we include the bottom-up approach, in which each employee's point of view is considered, so that each of them adds to their dashboard some KPIs or important initiatives that might have been overlooked during the top-down assignment process. By participating, the incumbent is motivated to accept the assignment of responsibilities. The resulting dashboard will have the advantage of including both what is a priority for the front line and what is required by the organization's vision. It has the full understanding and commitment of the incumbent. Examples of scoreboards created through this process can be found in our book Total Alignment.
The scoreboard should be neither long nor complicated. The definition process ends with a maximum of seven KPIs and IPEs, with weightings by level of importance. The idea is to stay simple and include only those that are vital to keeping individuals focused on those factors that significantly impact the success of the organization according to the Pareto principle. The employees closest to the front line would be primarily responsible for the KPIs and the higher-level collaborators would be primarily responsible for the IPEs.
Third pillar: Information
None of the above holds up if the information doesn't flow. The information pillar should ideally be supported by alignment software connected to the company's database, capable of providing the information that all employees need about the performance of their dashboards, as well as the dashboards of those employees in their pyramid of responsibility. The software connects those individuals who are accountable for certain KPIs or IPE with positions of influence, both horizontal and vertical, and provides feedback to each employee about their contribution to transforming the vision into a reality. The software with which we support this pillar is TOPS: The One Page Software, a state-of-the-art proprietary software that has been increasing its capacity over many implementations. Its key reports are three: focus, feedback, and management.
The focus report is the performance report on the job holder's scoreboard. It contains all KPIs or IPEs along with the current month's performance status and three goal levels (minimum, satisfactory, outstanding) that determine the criteria for performance progress. The feedback report lists the positive and negative exceptions to the focus report. Positive exceptions are those KPIs that have met or exceeded the satisfactory level that was set out in the focus report. Negative exceptions are those KPIs whose performance has been below the minimum target level. This report also provides information on how many periods in a row the exception has occurred and how many higher levels it has climbed to. The management report is an escalation report that shows all positive and negative exceptions to higher levels, according to the organization's hierarchy and escalation criteria. It is used to inform a manager about any exceptional performance at lower levels within the organization within their responsibility pyramid. The software includes a simple and adjustable built-in escalation scheme that reports exceptions to those levels that are above the level of the position holder, depending on the number of consecutive positive or negative exceptions.
Up to this point, companies that implemented the first three pillars described above have already noticed a significant cultural change. Their workforce values the transparency of the process. Employees participated in the process of articulating their company's mission, vision, and values and have appropriated them. They have had access to the Alignment Map framework for action. And, above all, they clearly understand the relationship of their dashboard with the organization's vision, that understanding that is truly important. However, the cultural advancement derived from all of the above is only the beginning of a deeper cultural change that will come through the fourth pillar: that of culture.
Fourth pillar: Culture
There are a few principles that guide Total Alignment's culture. Among them, two stand out: the oneness of humanity, and cooperation and reciprocity.[3] The first has to do with the way everyone sees and treats others within the organization. It means that the treatment of others is not tainted by the lens of otherness, that there is no sense of us and them, white collar and blue collar, employers and employees, old and young, bosses and subordinates, regular workers and temporary workers. Everyone is equal and oneself, although each individual contributes differently depending on their level of education, skills, experience, etc. All contributions are valued and respected, and the diversity of them represents a real competitive advantage. The application of this principle contrasts sharply with the culture of many organizations in which organizational hierarchy allows managers to feel superior to those who are accountable to them and to feel compelled to issue orders continuously.
The second principle, that of cooperation and reciprocity, involves transforming personal interest into the interest of the organization in order to achieve the organization's vision. It involves spending time and energy sacrificing self-interest. The application of this principle also stands in stark contrast to the culture of many organizations where you often come out on top individually and at the expense of others.
It is not easy to build the new Total Alignment culture, especially when there are already structures in the organization that encourage the wrong habits developed over time. We recommend changing these structures by replacing them with new ones.
The two structures that should be replaced
We are referring in particular to two structures that need attention. The first would be the performance appraisal system in which managers meet once or twice a year with those who report directly to them to rate them and determine the objectives to be achieved for the following year. It is common for the objectives of employees who report to different managers to be totally different and to be more aligned with the objectives of their bosses than with the vision and strategy of the organization. At Total Alignment we have eliminated this practice. Scoreboards already determine what employees should focus on and performance appraisal is transparent in the outcome of the scoreboards. The traditional performance appraisal system feeds the ego of managers and can be counterproductive, with very little value for the employee or employer.
We replace this practice with what we call Vertical Review, a process that begins with weekly or monthly one-on-one meetings between managers and those who report directly to them. These are not evaluation meetings, but support and empowerment. This meeting is followed by action and the subsequent meeting reflects on the actions taken. It is an opportunity for both individuals to share time and ideas about the company's core values and to consult on plans to improve the competencies needed to excel, as well as other topics that are relevant to each other.
The colabroadr leaves a Vertical Review meeting more focused on action plans to improve their competencies and the performance of their scoreboard. From the meeting, they also take away the learning obtained from reflection and greater motivation to continue advancing.
What the manager takes away is that both he and the person who reports directly to him align with the goal they share, which is to move the company forward. In addition, he can rest easy knowing that the employee clearly knows what he has to do to succeed and has a better idea of what will happen in his area of responsibility. The systematic nature of Vertical Review allows him to increase his sphere of control by working with more collaborators.
The performance appraisal system is not eliminated overnight when implementing Total Alignment. However, as the Vertical Review process is implemented and its value demonstrated, the need for performance appraisals diminishes over time and the practice naturally comes to a halt.
The second structure that should be replaced is the meeting to review results between a director and those who report directly to him. It is usually a meeting with subordinates where the result of each area is presented and that lasts a considerable time, especially when there are many presenters. In addition to the fact that much of what one person presents is usually irrelevant to others, this type of meeting feeds the feeling of superiority of the boss who takes the bench of judge before the presenters. This meeting is not aligned with the principle of unity that we talked about earlier. While it has the potential to support the principle of cooperation and reciprocity, this opportunity is usually not explored.
At Total Alignment, we eliminate such top-down meetings and replace them with bottom-up meetings: Team Reviews. These bring together the same participants, focusing on the boss's scoreboard instead of those in their direct reports. It is a shorter, more productive, and future-oriented meeting. With this paradigm reversed, the manager or director and the employees focus on improving performance. In addition, all employees can contribute to improving their boss's scoreboard. This meeting unites the group with a common purpose. Here we are not suggesting an abrupt elimination of results meetings, but rather a gradual elimination of such practice as the new Team Review process takes hold.
The Team Review creates a space that also allows you to reflect on the meaning of the organization's core values and ensure that all of its employees are aligned with the desired behaviors that are manifested in those values. In addition, Team Reviews spend a large part of their time on performance: on the boss's dashboard. The team reflects on how each indicator or initiative serves to drive the company's vision, on why the performance status has been above or below the satisfactory level of the goal, and on how it can be improved.
Before the meeting, the manager or director selects a key performance indicator as the main topic and invites employees who do not report directly to him, but who have an indispensable influence on the results of that indicator. In this way, people with interdisciplinary influence are brought together with the natural team to participate in the Team Review. Together, and with the help of tools for in-depth problem solving, they create a strategy to improve the performance of the KPI, and the tasks, as well as deadlines, that are required to carry out this strategy are assigned to the right people.
The action plan is executed after the meeting and throughout the month. The same group meets afterwards to reflect on the action and what has been learned, and the action plan is modified as needed for the next cycle.
It is at the appropriate lower levels of the organization that action plans are created to improve the performance of a process indicator. For those who have management influence over the KPI, action plans become delta action plans, in the sense that their effort is directed to the delta influence they exert in areas that are beyond the control of those who have primary responsibility for the indicator.
Both team and vertical reviews are supported by TOPS software, which can be accessed via computers or mobile devices for timely, relevant, and accurate information anytime it is needed. The software also makes it easy to create and distribute meeting agendas, capture deadline and accountable action commitments, and send reminders and notifications.
The fourth pillar is the one that ensures the quality and sustainability of the alignment. The first three build the system; culture is what keeps it alive when no one is overseeing.
Alignment as a way of operating
The state of alignment is not only a destination, it is both the operating principle and the goal. Alignment is a way of working that is continuously growing and strengthening. Within the organization, it translates into a powerful state of unity. We have walked through the thinking behind the interactive processes that lead to a state of total alignment within the organization. The company's vision has already been developed and has gradually become a reality when these processes have been fully implemented, and the results show for themselves. Often, the vision is achieved sooner than expected, and the results obtained exceed outstanding levels. The results tend to be both tangible and intangible, tangible in the upper and lower line of the company's finances, and intangible in the cultural environment that affects the quality of life of the workforce. It is not a single leader who leads the company on the journey to the desired future. It is many acting as one.
One last thought remains, and it has to do with our own mission: to help align organizations so that they achieve their vision and contribute to the betterment of the world. In fulfilling that mission, we have seen that the two basic principles, that of the oneness of humanity, and that of cooperation and reciprocity, mentioned earlier, have illuminated our path. We have noted their tremendous transformative power. Our vision for the future is that more and more organizations of all kinds around the world, public or private, for-profit or not-for-profit, small or large, will see that both their prosperity and the betterment of the world lie in harnessing this power.
[1] Bahá'í Writings.
[2] Key Performance Indicators.
[3] Bahá'í principles.