The magical 10 minutes – part 7
This is the 7th post in the series “The Magical 10 minutes”. It deals with the price of misalignment.
How long does it take to check if your management team is pulling and pushing in the same direction?
The first blog post explained how you ask yourself and each member of your management team to prioritize the 6 sources for financial growth.
The post #2 dealt with assessing the competitive environment.
The post #3 was about how to check if you all agree on your Customer Value Proposition.
In the post #4 we gave real life examples of internal misalignment on priorities for sources of growth.
In post #5 we looked at how a management team perceived the competitive situation of their company.
In post #6 we reviewed how differently members of a management team were perceiving the “Customer Value Proposition”.
Lack of focus
Imagine a software company who “focus” on 4 different industries with 5 different solutions. They have a domestic market share of < 5% in any of their 4 segments and now they want to go international. Let’s just assume this fictional software company has 250 people. Let’s also assume that 225 people out of the 250 are dealing with customers and products and let’s assume that each staff member can manage 1 segment and 2 solutions. The company is in reality a number of smaller business units with only few things in common: Same top management, administration and maybe some basic technology. 225 people divided by 4 industries makes 56 per industry, divided with 2,5 (5/2) gives 22,4 per industry per solution. What are they talking about at the board meetings? How will they manage an internationalization project?
Although the example is an artificial construction it does show that the company most likely would be better off as 4 companies (or independent business units) dedicated to each their industry or 5 companies (or independent business units) dedicated to each their horizontal solution and with focus on their domestic market for another year or three.
The price of misalignment
Misalignment in a management team is more severe than the example above. The example above illustrates lack of focus, but not necessarily misalignment.
Misalignment means that the strategy, the priorities and thus the focus in the management team are different, concealed and not used to feed a constructive discussion on a common course. The management team may be aware that something is wrong, but they do not have the tools to deal with and solve the misalignment challenges.
What is the price of misalignment?
The risk is high that one or more of the following situations will occur:
- Management meetings will be long and discussions never ending
- Salespeople will be given commission plans, which motivates and rewards selling the wrong things for the wrong reasons to the wrong customers, resulting in longer sales cycles, lower revenue and higher costs.
- Marketing will be driven by activities and making “noise” rather than focused on building a clear position, generating strategic leads to re-enforce the position and developing sales support tools to help close business.
- Staff development will be erratic and most likely left to the individual to organize
- Recruitment profiles will be “fluffy” and expensive mistakes made
- Employee satisfaction will suffer as they receive mixed signals from the individual members of the management team.
- Departmental conflicts will thrive as managers are trying to pull in all different directions
Choice and focus
Good management requires ability to accumulate insight, choose, focus, communicate and execute. There is nothing wrong with disagreeing as long as this disagreement is feeding the process of coming to a conclusion, align and act.
The price of misalignment is high, probably very high. How high is of course very difficult to estimate, but when it only takes 10 minutes to check for misalignment then just give me one good reason for not checking!