The SHIFTPOINTS Blog

Every company does lots of things.

Sadly, most never become truly great at anything.

For those of you who have not yet read my book, Decide One Thing, I will summarize it in One Sentence: you must be good at lots of things, but the way to win is to become differentiatingly great at One Thing.

In 1990, C.K. Prahalad and Gary Hamel introduced the idea of corporate competencies in a Harvard Business Review article entitled, “The Core Competence of the Corporation.”

More recently, Strategy&, the strategy consulting arm of PwC, advised companies to develop a set of “differentiating capabilities.” However, they do so with a word of caution:

“Too many companies don’t identify the few cross-functional capabilities they need to excel at in order to deliver on their value proposition. Not being clear about those capabilities, functions often decide to pursue functional excellence in silos. They strive to be world-class at everything they do, but often spread their resources too thin, and they don’t excel at anything.”

We strongly agree.

That is why we advise companies to pick ONE corporate competency and make it your One Thing.

Try to complete this sentence, “We are the best in the world at ______________.”

Most companies cannot honestly fill in that blank. After all, only One Company can be the best in the world.

However, every company can aspire to become the best in the world at something. So, every company can—and should—complete this sentence, “Our ambition is to become the best in the world at _____________.”

Step One is to choose something that your company could indeed become the best in the world at. And of course, there are many things that you can choose.

Step two is to align everyone—and everything—with your One Thing. After all, becoming the best in the world will require intense focus and disciplined investment. This is what turns your One Thing into a Differentiating Competitive Advantage.

We believe this is the most important component of creating alignment. Unfortunately, most companies do not have the discipline to Decide One Thing. That is why they can have visions, missions, values, and strategies … and still be massively misaligned.

Therefore, we strongly recommend that you lock this down before working on your vision, mission, values, strategy … or anything else.

In the One Thing chapter of my book, Drive One Direction, we will explore how Dyson, Herman Miller, Ferrari, and BTI360 unleashed the accelerating power of alignment with an intense focus on One Thing.

Valiant Integrated Services (www.OneValiant.com) provides mission-critical services to the U.S. Department of Defense and intelligence communities, including our Joint Forces commands, the U.S. Army, Army National Guard, U.S. Navy, U.S. Marine Corps, U.S. Air Force, and coalition forces and has over 5,000 employees in over 20 countries across the globe.

Valiant was launched in February 2017 and certainly qualifies as a fast-lane company: they grew from zero to over $700M in fifteen months!

To build a company this fast, the executives had to quickly come together as One Team.

Valiant’s impressive growth was fueled by three strategic acquisitions. In May 2017, they acquired selected assets of the Defense & Government Services business of the Supreme Group. In June 2017, they acquired ABM Government Services, and in May 2018, they acquired Cubic Global Defense Services.

While the press releases call them acquisitions, Valiant thinks of them as mergers. As Jim Jaska, Valiant’s CEO explained, “You acquire groceries. You merge people.”

For Valiant, alignment means blending three companies, with three different cultures, different brands, and different values into One Company. Of course, this starts with molding the executives into One Team.

There is a big difference between a group of executives and an executive team.

Groups of executives sit in the same room and present PowerPoint slides to each other. But people just pretend to listen and are probably checking email.

In contrast, high-performance executive teams have a shared vision, common goals, high accountability, and demonstrate a “we before me” attitude.

To help develop your executives into One Team, consider four factors: decisions, outputs, outcomes, and shared rewards.

• Decisions are the unique things that your executives decide as a team. In some companies, this list is actually quite small, since most of the decisions are made by individual executives without bringing the issue to the entire executive team.
• Outputs are the unique deliverables produced by your executives as a team. These include things like corporate strategy documents, annual budgets, or company goals.
• Outcomes are the unique results that your executive team is responsible for delivering as a team. These include things like corporate financial results, increasing shareholder value, or improving overall employee engagement.
• Shared rewards are the percentage of incentive compensation that executives earn as a team. At Valiant, each division is run by a Chief Operating Officer. To incentivize cross-divisional cooperation, 70 percent of each COO’s incentive compensation is tied to corporate, not divisional, performance.

While Warren Buffett and Charlie Munger have been together for six decades, Valiant’s executive team had to come together in six quarters. Jim Jaska has worked hard to make this happen, “When vision, objectives, and plans are shared, everyone works together to the benefit of the organization and the client.”

Do your company’s executives operate as a group or a team?

Note:  This is an excerpt from Dave Ramos' latest book, Drive One Direction.

Berkshire Hathaway (NYSE: BRK.B) is a multinational conglomerate holding company that owns 63 companies, from Acme Brick to the XTRA Corporation. The diversity of industries where they compete includes candy confectionery, retail, railroad, home furnishings, airlines, publishing, manufacturing, real estate, utilities, and more.

This eclectic mix of businesses is held together by One amazing Team.

Warren Buffett met Charlie Munger in 1959.

They have been business partners for six decades and have created billions in corporate and personal wealth.

"We've had so much fun in our partnership over the years," Buffett told CNBC in a joint interview with Munger, who called the partnership "almost hilarious, it's been so much fun."

Munger added they "don't agree totally on everything, and yet we're quite respectful of one another."

Buffett quipped that when they do disagree, Charlie says, “Well, you'll end up agreeing with me because you're smart and I'm right.”

(I tried using this line with my wife, but it did not go over very well!)

Jim Collins made “getting the right people on the bus” part of the business lexicon. But the real issue is aligning all the bus drivers to work as One Team … driving in One Direction. Fragmentation and infighting among the leadership team is one of the most caustic problems an organization can face. Yet, it is far too common.

Teamwork, alignment, and trust start at the top. The organization is never more aligned than the executive team.

But addressing executive team alignment issues will take courage. Skeletons will have to come out of the closet. Dysfunctional interpersonal relationships will need an intervention. People will have to address the conflicts they have been avoiding.

Someone will have to tell the emperor that he—or she—has no clothes.

Unfortunately, most executive teams never really deal with their misalignment issues.

Why? Because executives are afraid to speak their minds. Their need for self-preservation kicks in.

We see this all the time. We can tell that executives are holding something back. We can see their discomfort with the discussion or the decision that is about to be made. Yet, they are afraid to speak up.

Google just did a fascinating study about teams. They concluded that “psychological safety” was a key component of high-performance teams. It is this psychological safety that creates the environment for executive teams to have vigorous and candid debates about the company.

Psychological safety is the prerequisite to candor. And candor is the key to productive debates.

Creating psychological safety starts at the top. CEOs must create an environment where candor is valued, and opinions can be expressed without retribution.

How does your company’s executive team resolve conflict?

The Carlyle Group (NASDAQ: CG) is a global alternative asset manager with over 1,600 professionals operating in 31 offices around the world. They manage over $200B on behalf of over 1,925 investors from 90 countries.

Carlyle unleashed the accelerating power of alignment with their One Carlyle Culture.

At The Carlyle Group, alignment was built into the company by their three founders from Day One.

In fact, the One Carlyle Culture is a key component of how they deliver value to their customers. Glenn Youngkin, Carlyle’s Co-CEO explains it this way, “Our professionals work together across product lines, sectors, and time zones to harness the knowledge, resources, and wisdom in our global operation to help create value for our investors.”

“Carlyle has a culture of cooperation that is genetically embedded in the organization. If you look at our investment teams, we almost always have co-heads, not single heads. It is not a weird thing at Carlyle—in fact, it’s the opposite,” explained Kewsong Lee, Carlyle’s other Co-CEO.

Obviously, this idea also was used when Carlyle appointed Glenn Youngkin and Kewsong Lee as the firm’s Co-CEOs.

The private equity model has many virtues, but one foundational aspect is the alignment of interests.

Since the firm’s inception, Carlyle professionals, Operating Executives, Senior Advisors, and other professionals have committed more than $11 billion of their own money alongside their fund investors. When an investment succeeds, everyone benefits. When an investment fails, everyone loses.

“We constantly work to break down the natural silos that might exist across funds, across countries, and across sectors. In the end, we are only as good as our people,” explained Pete Clare, Carlyle’s Co-Chief Investment Officer. “And we are better when we work together in the spirit of One Carlyle.”

They also use recognition to reinforce their culture. Each year, the firm presents one employee in the world with the One Carlyle award, the highest honor that can be bestowed on an employee.

The Carlyle Group designed a culture of teamwork to deliver extraordinary value for its investors. Clearly, it has worked. The three founders are all billionaires.

Does your company have a One-Company culture?

In his landmark book, Good to Great, Jim Collins introduced the concept of “first who, then what.”

So, let’s start by clarifying your “who.”

We believe that your corporate executive team is ultimately responsible for creating alignment. Therefore, Step One is for them to accept that responsibility.

This starts with your CEO. Your CEO must operate as the company’s Chief Alignment Officer.

Randy Papadellis, the former CEO of the cranberry cooperative Ocean Spray, referred to himself as the “Chief Alignment Officer.” Papadellis joined Ocean Spray in July 2000 as the Chief Operating Officer and was promoted to Chief Executive Officer in 2002. Here is how he described the transition,

“I believe the biggest difference between being CEO and COO is the job of alignment. When I became CEO, I realized very quickly that it was my responsibility to take the many constituencies we have in our business—our grower owners, our Board of Directors, our key suppliers, our key customers, or most importantly our employees—and make sure that they were aligned and moving in the same direction.”

Aligned and moving in the same direction! My sentiments exactly.

Second, the entire corporate executive team must embrace alignment as a critical corporate initiative. There are several reasons for this:

• The corporate executive team is ultimately responsible for aligning the company’s multiple divisions, departments, functions, and geographies.
• The corporate executive team is ultimately responsible for aligning the interests of the company’s multiple stakeholders, including investors, creditors, employees, boards, vendors, customers, governments, the communities where you operate, and more. These stakeholders often have competing interests which must be aligned.
• The corporate executive team is ultimately responsible for aligning the company’s multiple strategies, tactics, goals, priorities, and initiatives into a coherent corporate strategic plan (One Plan).
• The corporate executive team is ultimately responsible for aligning the company’s resources— both human and financial—with the corporate strategy. Budgets must be allocated. Headcounts must be approved. 
• Each corporate executive has the responsibility to align their functional area. The Chief Financial Officer must consolidate the budgets. The Chief Marketing Officer must integrate the marketing plans. The Chief Sales Officer must roll up the sales forecasts. 
• Finally, the corporate team “sets the bar” for alignment. If they are not aligned as One Team, the rest of the organization will be dysfunctional. They must be role models for alignment. A misaligned executive team will never create an aligned company.

While no team is perfect, in my book, Drive One Direction, we will explore how Ford, The Carlyle Group, Berkshire Hathaway, and Valiant Integrated Services unleashed the accelerating power of alignment by working as One Team.

A lot has been written about teamwork.

Teamwork is the foundation of alignment.

But many people have never been on a high-performance team, thus they do not have a real framework or experience base to work from. They don’t really know what “team” means.

In addition, there are many kinds of teams:

A crew team is a homogeneous group. Each member has a virtually identical build and an identical skill-set. There is only One Team, and they must work in perfect harmony in order to win. They are all—quite literally—in the same boat!

A golf team is a loose collection of individuals, all playing their own games. The team wins if enough people win their individual matches. However, it is possible for an individual player to win the individual trophy, yet have their team lose the match.

An improvisational jazz band is a different kind of team altogether. There is no conductor, no playbook, no scoreboard, no trophy, no match to win or lose, and no coxswain to keep everyone synchronized. Yet, the musicians demonstrate amazing teamwork.

A football team is a highly interdependent group of diverse players. Each player has very specialized skills. While there are sub-teams—offense, defense, and special teams—there is only one winner at end of the game. They win or lose as a team.

In 2015, retired General Stanley McChrystal discussed the complexity of sub-teams in his book, Team of Teams. In many companies, the real issue is that people are aligned with their “sub-team” but are not aligned with the other teams or with corporate.

• The Boston office is tight, but they don’t get along with the New York office.
• The marketing team is tight, but they don’t get along with sales.
• The corporate finance team is tight, but they don’t get along with the divisions.
• The European team is tight, but they don’t get along with the Americans.
• The Democrats are tight, but they don’t get along with the Republicans.

People tend to get along with their immediate group. Their function. Their local office. Their clan. Their tribe. But they fight with people who are not part of their group.

So, as you embark on the journey to improve alignment, perhaps you should start by answering One Simple Question, “What does ‘team’ mean?”

Learn more about creating One Team

Companies operate in many ways. Some are highly centralized, others are highly decentralized.

Your corporate operating model is a key factor in deciding how to create alignment.

The following list is not meant to be exhaustive but can help you articulate your operating model.

The “One Business” Company

• Company competes primarily in One Market
• Most likely, the company is organized functionally (sales, marketing, manufacturing, etc.)
• Most likely, there is One P&L

The Highly Centralized Corporation

• Big, strong corporate headquarters
• Most of the big decisions are made at corporate
• Divisions are partially autonomous
• Alignment is primarily created “top-down” by corporate

The Multidivisional Corporation

• Strong corporate headquarters and strong divisions
• Division leaders are General Managers
• An even balance of power between corporate and divisions
• Cross-divisional alignment is created by corporate

The Federation

• Moderately strong corporate headquarters
• Autonomous divisions, often led by Presidents
• Only a small amount of “top-down” corporate-level alignment
• Alignment is primarily created at the divisional level
• Small focus on cross-divisional alignment

The Conglomeration – A Company of Companies

• Small corporate headquarters
• Company Presidents are highly autonomous
• Alignment is primarily created at the operating company level
• Little or no focus on cross-company alignment

The Association

• Corporate has very little power
• Members choose to affiliate—or not
• Members pay to be a part of the association
• Corporate has limited decision authority, and primarily exists to serve the members
• Alignment is often around a common agenda

The Denomination

• Many different operating models
• Some have very strong corporate-driven alignment … others have very little
• Always bound together by One Doctrine and/or One Tradition

The Abomination

• If your company is in this category, you definitely need my upcoming book, Drive One Direction!

What is your company’s operating model?

SHIFTPOINTS® helps companies unleash the accelerating power of alignment, because Alignment is the ultimate competitive advantage™.  Contact us at start@shiftpoints.com or www.shiftpoints.com.

I strongly believe that alignment is Job One.

But every company must create alignment in a unique, One-of-a-Kind Way.

Three primary factors impact your company’s approach to creating alignment.

The first factor is your company’s life stage. Startups are worried about survival, and spinouts are focused on cutting the corporate umbilical cord. 

The second factor is your company’s operating model. Some companies run like denominations, and some churches run like corporations.

The third factor is your company’s business philosophy. Often, this is reflected in how many One and Only One corporate standards you use.

When you combine these three factors, the result is thousands of unique permutations.

However, regardless of your company’s unique situation, alignment is mission-critical.

Our goal was to develop One Methodology that would work for every company, regardless of life stage, operating model, or business philosophy.

This led us to develop the Drive One Direction methodology.

We believe that every company, regardless of life stage, operating model, or business philosophy, can—and should— apply the Drive One Direction methodology. However, every company should do so in a unique, One-of-a-Kind Way.

For example, every company has a brand. Your job is to create a unique, One-of-a-Kind corporate brand.

Every company has a culture. You must create a unique, One-of-a-Kind corporate culture.

Developing a One-of-a-Kind Way of creating alignment will differentiate you from your competitors. It will allow you to create a unique One-of-a-Kind Company.

Some of the exemplar companies, such as Amazon, use the term “DNA” to articulate their unique approach to creating alignment. We like that, since your DNA both identifies who you are and differentiates you from everyone else.

Alignment is Job One, but every company must create it in a unique, One-of-a-Kind Way.

SHIFTPOINTS® helps companies unleash the accelerating power of alignment, because Alignment is the ultimate competitive advantage™.  Contact us at start@shiftpoints.com or www.shiftpoints.com.

When 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.

SHIFTPOINTS^® helps companies unleash the accelerating power of alignment.  Because alignment is the ultimate competitive advantage.