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03-27-19

Divisions—by Definition—Divide

shutterstock_62272-OneProblemWhen companies are small, they are in One Business. They target One Market. They sell One Product. There is One P&L. Everyone probably sits in One Office. But, as companies grow, they create divisions. 

There is only One Problem: divisions—by definition—divide.

Just to be clear, even small, One Business businesses can have alignment problems. (We’ve even worked with solopreneurs, otherwise known as One Person Companies, who had alignment problems.)

But the larger you are, the more likely you will struggle with strategic alignment. The big turning point is when your company creates divisions.

Some companies divide by product line. Some divide by geography. Some create business units. Some organize by function.

How is your company divided?

By product? By market? By function? By geography? Some other way?

Once your company has divisions, you must decide if it is important to align them.

Yes, I said “if.”

Theoretically, your company could allow the divisions to operate totally autonomously, with virtually no alignment. Some companies, such as Berkshire Hathaway and Virgin, operate as a “company of companies.” There is just a very thin, lightweight corporate alignment process to hold the operating companies together.

However, most companies decide that it is indeed important to create a high level of alignment.

“We must unite the divisions!”

As we explained, companies must align the divisions with corporate and they must align the divisions with each other.

In addition, each division adds its own strategies, goals, standards, priorities, policies, etc. to the things that cascaded down from corporate. Then, departments are expected to align with both the things that cascaded down from corporate and the things that cascaded down from the divisions.

And on and on it goes.

The alignment challenge grows exponentially once a company has multiple divisions. Aligning a company with two divisions is four times harder. Aligning a company with four divisions is sixteen times harder.

Many companies exacerbate the alignment problem by constantly reorganizing. Every time your company reorganizes, the alignment operating system must be rebuilt.

03-20-19

Workforce Changes Radically Affect Alignment

Runners uphillMy dad went to work at General Electric in January 1962.

In just One Generation, the workforce has radically changed, and creating alignment is now radically more difficult.

In my dad's generation, the workforce was very homogeneous. Most of the “white collar” workers were white males. Most of the women in the workforce were in secretarial roles.

Now, the workforce is tremendously and beautifully diverse. The increase in diversity is a great thing. Let me say that again, the increase in diversity is a great thing, but it does make alignment much more difficult.

In my dad’s generation, a large percentage of the workforce had military experience. They were comfortable in top-down, command-and-control organizations. They were trained to obey orders.

Now, the workforce is radically different. Many were raised in the “me” generation. Millennials have a very different worldview. As a result, the old command-and-control way of creating alignment is no longer effective.

In my dad’s generation, there was a basic civility and decency in society. Children were trained to say, “Yes, Ma’am” or “Yes, Sir.” Politicians referred to each other as “distinguished colleagues.” There was a respect for authority.

Now, people denigrate each other every night on TV. They attack each other in social media. They shoot the police. This makes alignment much more difficult.

In my dad’s generation, many companies had either explicit or implicit guarantees of lifetime employment. My dad spent thirty-one years with GE. In fact, when I started at IBM in 1979, the company still had a culture of lifetime employment.

Now, the workforce is extremely unsettled, and most people will work for multiple companies in their careers. Companies expect loyalty, but they don’t give it in return. This makes alignment much more difficult.

In my dad’s generation, the majority of people working at a company were officially classified as employees.

Now, the workforce is an ever-changing mix of employees, long-term contractors, temporaries, and gig workers. This creates multiple classes of workers with different benefits, different rules, different loyalties, and different goals. This makes alignment much more difficult.

In my dad’s generation, when you wanted to communicate with someone who worked in your building, you walked down the hall.

Now, people send an email to the person sitting in the next cubicle. This makes alignment much more difficult.

In my dad’s generation, companies had physical offices.

Now, many companies have large numbers of full- and part-time telecommuters. Some companies, such as Zapier, are 100 percent virtual.

In my dad’s generation, the Fortune 500 was extremely stable: companies remained on the list for an average of sixty-one years.

Now, the average tenure of a Fortune 500 company is fifteen years. Companies are constantly merging, reorganizing, divesting, etc. Companies that were models of stability—like Arthur Andersen, Nortel Networks, and Lehman Brothers—are completely gone.

The combination of these organizational and societal forces has made alignment radically more difficult.

 

03-13-19

Is Alignment Really Necessary for Every Organization?

BigBoatManyRowersWe believe that every organization, regardless of size or industry or operating model, must create strategic alignment.

That is why we say, “Alignment is Job One.”

For every idea, there are contrarians. Alignment is no exception.

So, let’s consider the question: is alignment really necessary for every organization?

Consider some of the common objections to alignment raised by my contrarian friends:

  • Can’t you just let everyone do whatever they feel is right?
  • Won’t top-down controls stifle innovation and creativity?
  • Do you really need rules?
  • Won’t people just naturally self-align to do what is in the corporation’s best interest?
  • What, are we going to all join hands and sing "Kumbaya"?

After all, you can’t legislate morality.

Perhaps you are an alignment contrarian. Perhaps you have these questions and more. If so, consider these examples:

In 2014, the online retailer Zappos adopted a utopian “self-management” model called Holacracy. When Zappos adopted it, hundreds of managerial positions were eliminated. It was hailed as the future of work. Fully empowered employees. Free to contribute. Free to innovate. Free from creativity-stifling management.

Not so much. The Holacracy model has a formal constitution that is 42 pages long.

Consider Burning Man, the annual festival in the Nevada desert. It is designed to be the ultimate, utopian experience of individual freedom and “radical self-expression.” It attracts over 70,000 people from all walks of life (including, ironically, billionaires who fly in on private jets).

But even Burning Man has rules to keep everyone aligned.

Yes, but how about the anarchists?

The International Anarchist Federation is fighting for “the abolition of all forms of authority whether economical, political, social, religious, cultural or sexual.” Interestingly, even the IAF has rules. To become a member, you must agree to align with their statement of principles.

Amazing. Even anarchists need alignment.

I hope these examples help convince you that alignment is mission-critical for every organization.

If your company needs alignment, SHIFTPOINTS offers The Pit Stop Program -- a 30-day engagement that culminates in a One Day workshop. It is intensely focused on One Issue: unleashing the accelerating power of alignment. To schedule your Pit Stop Program, contact us at start@shiftpoints.com.