3. The business organization we belong toExplore the leading practices to overcome lagging productivity, lack lustre performance and failures in execution! 21/10/2010 Alignment Health Check™ - Delta Solution Group 1
4. Welcome! This presentation provides key information outlining why creating alignment is an important part of management’s role in creating value for the short and long term. The current business environment is complex and it challenges even some seasoned executives. We’ll show you how you can create an agile environment to help you grow, profit and sustain the business all while reducing the risks! 21/10/2010 Alignment Health Check™ - Delta Solution Group 2
5. The Alignment Health Check™ Using an enterprise approach to optimize performance of processes, systems, people and external influences. “Alignment is the essence of Management” ~ Fred Smith, Chairman, FedEx 21/10/2010 3 Alignment Health Check™ - Delta Solution Group
6. The #1 service requested by our clients Alignment is essential to the effective integration of People, Processes and Systems and how balanced alignment is will determine performance outcomes and ultimate accountability. The Alignment Health Check™ 21/10/2010 Alignment Health Check™ - Delta Solution Group 4
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8. Alignment is a concept that is not the exclusive domain of the executive suite. It must be instilled in every employee in order for it to deliver true and measurable value.
9. There is growing evidence of challenges and misalignments that cause organizations and management to stall in their efforts to innovate and fail at execution
10. In some instances, difficulties may be slowly overcome. In other cases, the challenges stand as cultural barriers to change and growth. These two situations demand an objective assessment.
11. Studies and experience spanning more than 25 evidence that sustainable growth, profit and risk taking are ultimately enabled by the effectiveness of alignment between processes, systems and people, all the while being fully aware of the voice of the customer, stakeholder, supply chain and regulators.
12. Alignment concepts and applications have evolved over the past 15 years contributed to by clients in numerous business sectors, operating environments and geographies.
13. More than 350 organizations have tested and applied the sustainable concepts of alignment. Overview 21/10/2010 5 Alignment Health Check™ - Delta Solution Group
14. What is the motivation for Alignment? 6 3.5% Other 8.2% 7.8% 7.1% 5.9% 4.5% 33.5% Top 5 Inadequate resources/capabilities Mandates not clearly defined/siloed Unclear accountabilities & monitoring Poorly communicated or ad hoc strategy Inadequate/uncommitted leadership 33.5% Misalignments have a very high price tag! As much as 37% of revenues is lost in poor performance Adapted from Turning Great Strategy into Great Performance, Mankins and Steele, Harvard Business Review August 2005 and 2008
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16. Alignment brings to business a discipline and a logical framework that establishes the links between business strategy, organizational structure, capabilities, processes, people and its customers/stakeholders.
17. The Alignment Health Check™ is the first step in establishing a systematic approach to achieving and measuring effectiveness in strategy, execution and operational risk. Alignment as a path to Value Creation 21/10/2010 Alignment Health Check™ - Delta Solution Group 7
20. Current economic headwinds are causing many organizations to struggle with growth and profitability. A challenging state not typically considered sustainable for long durations. Business leaders seek growth through expansion of their existing products and services. After all, is growth not about “more” - more products, more customers, more services? But “more” is just what diffuses the organization’s efforts. “More” increases complexity in the organization and its operations. With effective alignment a business has a direct line of vision to what drives performance and creates a direct link to its strategy. Essentially that requires alignment of People to the Strategy as opposed to the traditional model of aligning strategy to customers and/or competitors. How does Alignment drive performance and strategy? 21/10/2010 Alignment Health Check™ - Delta Solution Group 9 It’s not only the stars that have to be aligned to reach your destination, it’s all the internal processes, rewards, and drivers.” ~ Wm. L. Boyan, COO John Hancock Insurance Co.
22. “ MUST” Management Issues to Focus on . . . Integrate Planning and Execution Provide Leadership in Communicating the strategy WELL Set the TOP 3 Priorities Know clearly what Actions are needed Have the right Resources in place/planned (Succession Planning) Never stop the communication Establish Accountability (rewards/consequences) Have the right metrics clearly defined against key objectives What levers to pull?
23. An Alignment Assessment is most effective for organizations that: Are primarily focused on growth, profitability and sustainability; Have the metrics in place May recently have decided on a new initiative, change or transformation; Are seeking to implement a more systematic and reliably consistent approach to achieve flawless execution; Are seeking to increase overall level of effectiveness; Perceive increasing risk to their business (competition, shrinking market, product lifecycle expiring); Must be more resilient; Are working with an outsourcing or supply chain partner(s); Have experienced a drop in performance, overall, or in key performance areas; When is the right time to assess alignment? 21/10/2010 Alignment Health Check™ - Delta Solution Group 12
24. 13 What happens when expectations and performance begin to diverge? How do you recognize the event? Performance Gap Level of Expectations for % effectiveness Performance and/or Effectiveness Expectations Organizational Capabilities When performance expectations have not been met, again Time to Execute in months Source: ICORM, Executing on Key Strategic Initiatives, 156 corporations, 3 yrs.
25. An Alignment Assessment is most effective for organizations that: Have experienced an increase in operating costs; Have experienced a business interruption and recovery has been less than 100%; Have recently undergone a merger or divested a line of business; Experience an unsustainable increase in priorities; Want to reduce their business complexity; Are engaged in Succession Planning; Are preparing for strategy review. When is the right time to assess alignment? 21/10/2010 Alignment Health Check™ - Delta Solution Group 14
26. An Alignment Assessment cuts through the complexity that often clouds issues. Effective alignment has been proven to reduce operating costs; making room for reinvestment in new areas of the business. In recent years, due to rising risks, organizations that strive to achieve strategic and operational alignment have managed to lower the level of complexity. When complexity is perceived to have been reduced the organization can more easily identify emerging risk and accelerate the performance curve, commonly referred to as the “J Curve.” The ability to better identify emerging risk results from a better understanding of how interactions occur in the business. Aiming to reduce complexity? 21/10/2010 Alignment Health Check™ - Delta Solution Group 15
27. The Alignment Health Check ™ Fundamental to the value of an alignment is establishing clarity on objectives and strategies Each step of the process creates a link to the key objectives and strategies of the organization The assessment occurs on multiple levels – from Executive to Front Line Management is involved in every step of the process The Results compare the variables between different levels of the organization Analysis provides a risk identification opportunity Recommendations are sufficiently detailed for Management to determine priority and timing of actions 21/10/2010 Alignment Health Check™ - Delta Solution Group 16
28. The Four Boxes™ and Criteria Management provides input to the key objectives, expectations, strategies and assumptions Language is crucial to the consistency of the message Establish consistent understanding of objectives and strategies Testing the conditions of alignment at multiple levels Determine the tolerance for misalignment strategically and operationally
29. 21/10/2010 18 Alignment Health Check™ - Delta Solution Group The People’s Voice and Feedback
30. 21/10/2010 Alignment Health Check™ - Delta Solution Group 19 A ‘Heat Map’ of the results provides management with insight to areas of priority Receive an analysis of the inter-dependencies that create misalignments Identifies priorities impacting productivity, innovation, resilience and increasing operating costs Draws management attention to emerging risks strategically and operationally Results evidence alignment gaps and indicators of emerging risk
31. Public Expectations vs. Actual Performance 20 Results Expectations For Performance Performance and Productivity Gap Caused by Misalignments Actual Performance Performance X Time Misalignments define sources of performance and productivity gaps Source: Raymond F. Zammuto, Assessing Organizational Effectiveness
32. Self Correcting Alignments Identify Build Optimize Sustain Delta Solution consultants will provide actionable recommendations and assist you to create the strategic and operational alignments 21 Management Push Organizational Pull
33. Comprehensive studies have provided evidence of recurring decisions errors where misalignments existed between Strategic direction and Operational execution; You can stop the vicious cycle of frequent decision errors. Alignment Supports Key Decisions 22 Frequency of decision errors : Effectiveness of Communication Poor work relationship Person to job mismatch Clarifying expectations Source: Kelley School of Business, Indiana University, 2007
34. Review key objectives, strategies Reassess the Business Model and the market space Succession Planning Defining new markets and opportunities Sourcing and/or allocation of strategic capabilities Capabilities planning for transformational change Redefine how business is conducted Assessing the gaps to leading/best practices Compress cost of operations AND raise effectiveness Redefine PRIORITIES How Results are Used 21/10/2010 Alignment Health Check™ - Delta Solution Group 23
35. Helping organizations achieve higher levels of performance and effectiveness Providing you tools that will help you to sustain the performance levels YOU want to achieve Offering expert resources to work with your people, processes, technologies and better navigate a complex world of supply chains, regulators, competitors and uncontrollable forces; Our clients benefit from proprietary tools that are adaptable to their purposes. Contact: Dragica Grbavac, Principal 416.449.7475 DeltaSolution1@gmail.com Dragica.H.Grbavac@icorm.org Solution Partner: Strategic Business Value Creation Group Delta Solution Group 21/10/2010 Alignment Health Check™ - Delta Solution Group 24
Editor's Notes
Integrate Planning and ExecutionProvide Leadership in Communicating the strategy WELL Know clearly what Actions are needed Have the right Resources (blend of capabilities) in place/plannedNever stop the communicationEstablish Accountability (reward/consequences) Have the right metrics clearly defined These are the principal levers (among a couple more) that create value for a company. It is not so much about checking to make sure you have them all, as it is about establishing a discipline that will allow you to create value at every level
Many corporations have been charged with making poor judgment calls when throwing good money after bad when a project is not succeeding only months into the timeline. Typically management is challenged to discern if it’s planning or execution that has gone off the rails, or both. Experience has indicated that it is BOTH. Planning is done with a certain number of assumptions are made, but most often, in reality, those assumptions are not continually verified. How to do that??? Delta Solution provides a tool and methodology that allows management and their teams to monitor assumptions dynamically and be alert to any that are no longer valid or new ones should be recognized. When projects underperform, it indicates to the company that it actually cultivates underperformance. Often (about 40%) of projects don’t meet their performance objectives. This is often the case with an acquisition. In more than 40% of cases, acquisitions and mergers don’t deliver the expected performance. Mismatch of capabilities??? PerhapsExecution? Perhaps, or maybe it’s both
Anxiety distracts focus - Anxiety develops when realization of missing capabilities. Anxiety is not sustainable Down the path, seldom are the assumptions reviewed or questioned. Were they the right assumptions in the first place? Delta Solution facilitates many such discussions and explorations with Management and their teams.
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