Alignment in management teams – a source for substantial and instant productivity gains

 In Business Model Management, Industry News

05_ObjectivesWe hear the questions again and again: How do we ensure that our organization is pursuing the same objectives and executing the same strategy? How do we communicate and break down the objectives ensuring that each and every “associate” is fully aligned with our overall objectives and strategy?

Central planning is apparently not the answer.  The top down approach has substantial shortcomings in a world that changes extremely fast and where the “bottom” experiences the changes long before the “top” realizes what’s going on.

There is a simple tool available for checking alignment in any part of an organization. The tool is called ValuePerform and is invented by the Danish software company ValueMaker.

We call it “The Organizational X-Ray.”

This 2-minute video will give you the full picture of what ValuePerform is and does.

I have performed many ValuePerform projects and can testify to its incredible value and price/performance ratio. What continues to amaze me is the reluctance demonstrated by many executives towards the ValuePerform approach. In the following I have categorized this reluctance.

The diffusion of technology innovation

ValuePerform does represent a new way of approaching productivity improvement.  We know from experience that 85% of executives are not interested in anything new. Only 15% of executives belong to the group called early adopters and visionaries who are constantly on the outlook for something new which can improve their position vis-a-vis their competitors.

You can easily check if an executive is an early adopter and visionary by watching his/her reaction to something they haven’t been exposed to before:

Visionary: Interesting, please tell me more!

Main stream: Who else is using it?

It is still very difficult for a lot of executives (especially in larger companies) to accept that small companies on a shoestring budget can do innovation.  How can a small software company provide something at a very attractive price/performance ratio that executives are used to paying Mckinsey, BCG, Bain and other consulting companies millions for providing?

The “can of worms” angst

Most executives are busy – very busy. One of the main reasons for being busy is that they constantly need to adjust the course to ensure they remain on track to achieve (mostly financial) objectives.  Although misalignment is a major source for being off track, most executives are reluctant to see what an X-Ray may reveal.

I think there are two reasons for this angst:

  1. It is worse than I thought: If the X-Ray reveals misalignment issues much worse than expected the neck of the bottle will point at me. How come I didn’t know this already? How could I be so ignorant to these differences?
  2. Knowledge requires action: I have enough on my plate already. If I become aware of additional issues then I need to do something about it. Maybe it is better to ignore issues until they surface.

Admitted: Doing an X-Ray is asking for information about things that you cannot see (that’s is the advantage of an X-Ray). Ignoring what you see will obviously be very difficult.

Genuine ignorance

There are obviously executives who do not perceive misalignment as an issue. They have never tested for misalignment, but they feel that there is good understanding of objectives and strategy in the management teams. If you have a good feeling and you are on or ahead of your budget and objectives, there is little incentive to “rock the boat.”

Complacency can be deadly. Business history continues to repeat itself as successful companies commit suicide by suffocating from within.

It takes courage to ask a successful management team to line up for an X-Ray. Why waste time on X-Rays when we are already healthy?

The health check

xrayWhen we change Life Insurance Companies or apply for a pension scheme, an extended health check is required. The health check is not done to serve us, but to assess the risk for the insurance company and determine the price (and exceptions).

If the price and time required doing health checks were reduced by a factor 100, would more people do regular health checks for their own benefit? I think so.

With ValuePerform any company can afford to run a health check at least once a year and whenever changes in the organization require re-alignment. I can almost guarantee that such an exercise will reveal potential productivity gains when applied. Releasing such productivity gains will require action and changes.

This is the challenge: We all want improvements, but most of us don’t like changes.


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