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Aligned Yellow Bricks provides your organization with a logical and progressive methodology for success, by preventing tornados of random activity that only create Oz-like illusions of accomplishment. It keeps you grounded by developing the brick-by-brick alignment that will keep your organization moving along the strategic road to effective goal fulfillment.
In Aligned Yellow Bricks author Bob Woodward starts at the beginning, by emphasizing the critical requirements for organizational success. Incorporating real-life examples from international corporations—including Hewlett Packard, Ford, and General Electric— Woodward creatively illustrates the necessity for establishing strategically aligned workplace activities in a step-by-step process that demonstrates how to effectively:
· Define and communicate goals
· Align the organizational workforce
· Create balanced measurements and metrics
· Install a relevant reward system
Aligned Yellow Bricks delivers a common-sense methodology that will help any organization prevent those unproductive “whirlwinds” of random activity and achieve a higher level of success.
Table of Contents
Introduction: Aligned Yellow Bricks: The road back to Kansas
The Allure of Oz: An Overview
Building an Aligned Strategic Roadmap: Brick by Yellow Brick
Yellow Brick One: Organizational Direction
- Kansas Bound: Define Your Goals
- We’re Off to See the Wizard: Primary Goals
- Static Values
- Creative Vision
- Windstorms, Witches, and Other Distractions: Goals are “Job One”
- Caution - Flying Monkeys Ahead: Secondary Subsets
- From Head of Straw to Head of State: Shamelessly Communicate
Yellow Brick Two: Organizational Structure
- Searching for a Brain, a Heart, the Nerve: The Reason for Organizational Alignment. The Vehicle - The Enabler
- From Munchkinland to Emerald City: Creating an Aligned Organizational Structure
- Phase One: Our Current Environment - The Organizational Balance Sheet
- Phase Two: An Evolving Environment
- Do These Slippers Fit?: Customer Considerations
- Misaligned Wizards: Professor Marvel Manufacturing Corporation
- Gaze into the Crystal: What Would You Do?
- Supplying Yellow Bricks: Relational Dependencies
Yellow Brick Three – The Balancing Act
- Be Careful What You Ask For: Metrics and Measurements
- A Horse of a Different Color: The Secret of Sustainability
- Picking People, Processes, and Poppies: Chasing the Bubble
- Bring Me the Broomsitck: Professor Marvel Revisited
- Click Your Heels Three Times: The Triad of Aligned Balance
- Belching Fire and Floating Heads: The Relational Context of Metrics and Measurements
- Division One – The Balanced Organizational Cockpit
- Division Two – Forecasts, Targets and Benchmarks
Yellow Brick Four – Incentives and Actions
- Something in that Bag for Me: Link and Communicate Rewards and Actions
- “A Jolly ole Town”: The Joy of Alignment
From Oz to Kansas: A Summary
- Over the Rainbow: Benefits from This Approach
Introduction: Aligned Yellow Bricks: The road back to Kansas
Aligned Yellow Bricks is a business primer that illustrates the dynamics and value of strategic vision and leadership, and their relational effects on organizational activities. How is it possible for an organization to create an aligned structure, lean processes or effective tactical actions without all stakeholders first understanding its strategic destination? A simple concept, you would think, but one that is routinely overlooked or forgotten even by the best and most well known organizations. A failure to define and communicate a strategic goal can only create a whirlwind of random, even if well-meaning, activity and an Oz-like illusion of accomplishment.
During periods of transition, any type of organization can become inadvertently distracted from their ultimate goals and, in doing so, fail to maintain, support, and reinforce their own strategic vision. This can undermine the efficiency and effectiveness of the workforce by mistakenly creating activities that are at odds with the organization’s true goals. Aligned Yellow Bricks uncovers the issues that create the organizational misalignment and suggests step-by-step actions to remedy them.
Consider the following fictional account from a long-term employee of a now global corporation:
- "When we were a small company, we all communicated, pulled together and acted like a team. As we grew, the workforce expanded onto different floors, into more buildings and finally into dispersed geographic regions. This fostered an unintended consequence: a compartmentalization of ideas, processes and priorities. Additional growth through mergers and acquisitions brought about even more complexity with a higher mix of segmented businesses, cultures and methods. We are a much larger company now, but a much less effective one. In some cases we are failing our customers, and I'm not even sure anymore what we are ultimately trying to achieve. I find myself wondering, ‘how did we get here, and how can we get our team back on track?’"
If you work for a large company, you will likely recognize at least a few kernels of truth in this story. Growth can be challenging, even to a profitable well-run company, unless it is coordinated and aligned with a cohesive organizational vision. Aligned Yellow Bricks demonstrates the relational inter-dependencies necessary for sustained organizational success. It discusses the importance of creating and clearly communicating corporate goals throughout the organizational structure, and the hazards that may be encountered if the structure is not built to facilitate those goals.
Economic transitions, including phases of rapid growth or contraction, are particularly troublesome to organizations. During times of swift economic expansion, rising revenues and profits may conceal the perils innate in organizational misalignment. Misaligned companies flush with profits rarely feel the urgency or consider the priority of ensuring that all activities are configured to support a unified goal. Conversely, it is during economic downturns that companies are most dramatically exposed to the affects of poor goal alignment. A failure to structurally align organizational activities with their goals can severely sub-optimize results and generate uncoordinated, and sometimes perverse, efforts from the workforce. Aligned Yellow Bricks gives examples of how companies can unwittingly become misaligned, and the actions needed to pursue remediation and future prevention.
The following four questions comprise the basis for determining structural alignment and become the “yellow brick” framework for building a strategic roadmap:
- · What are the primary goals of the organization?
- · Has the organizational structure been aligned to effectively execute the actions necessary to achieve those goals?
- · Have balanced metrics been defined to measure and integrate the aligned actions necessary to achieve those goals?
- · Does the reward system create the incentives necessary to spur those appropriate actions?
The answers to these four questions will become the outline for creating the structural alignment between the strategic goals of the organization and the mission to achieve them. Addressing them first will guarantee a unified approach toward achieving the organizational targets and prevent any time-wasting consideration of less advantageous solutions.
Aligned Yellow Bricks takes a common sense approach in relating the benefits of goal alignment and the importance of preventing relational imbalance. I sincerely hope that you find Aligned Yellow Bricks beneficial to your group or organization in helping to maintain focus and direction on your “road back to Kansas.”
The Allure of Oz
“Toto, I have a feeling we’re not in Kansas anymore.”
—Dorothy to her dog, while surveying her strange new surroundings
What do you think would happen if the industrialized nations of the world threw a technology party and everybody came? As a host, you would need to provide the following:
· At least one idea—whether new or recycled
· Seed money—your own or other’s
· A fervent belief that the arcane business economics of the “old economy” were a thing of the past
As a guest, you would only be required to believe that riches beyond imagination could be yours through blind equity ownership—traditionally trained accountants and analysts need not attend. The party would be open to individuals, both young and old, and organizations from the stodgy to the new age. Everyone would be guaranteed a good time. But to participate you would be required to check logic at the front door. Are you game? Then welcome to the biggest bash since the roaring twenties: The 1990s.
The party lived up to its billing. Host and guests alike were treated to “party” favors (courtesy of the Republicans and Democrats), door prizes (stock options), and a champagne atmosphere that lifted the mood to a euphoric state. Some of the “new economy” technology hosts were chosen at random to receive riches never before imagined and notoriety normally reserved for those with cult icon status. Business magazines covered the event and added credence to the groundswell that a new era was emerging. Those who insisted on clinging to old ideals, like corporate visions supported by strong strategic business plans, would certainly be taking the slow road to obscurity. Businesses and entire industries were being born so quickly that concern about earnings would only slow you down. Speed to market was the ticket. The business details would just have to follow.
As the party progressed through the years, participants became ever more boisterous and disorderly. Some major players who became a bit too aggressive were even forced to leave by the SEC accounting bouncers. Other less-notables soon followed, and eventually a stampede to the exits brought the gala to a halt.
The snowballing aftermath left the global business environment in spasmodic disarray. Marquee nameplates that had abandoned their own values and visions in the race for poorly defined “strategic growth” found themselves paralyzed like trauma patients in shock, unable to regain coordinated muscle control. Once healthy competitors, now bloated and dazed from feeding at the cannibalistic buffet of market share, floundered and groped for any remaining business opportunities regardless of their true strategic fit. The collective corporate mind still pulsated with the energy of life, but the organizational body struggled to assemble simple synergistic plans of action that might guarantee its very survival. It was a very quick trip down from the top of the mountain. And it left some very savvy corporations scratching their heads and wondering how they strayed so far from their strategic vision.
The 1990s was an incredible decade of change. New technological developments pushed the existing envelope of business productivity. Consumers were blanketed with timesaving personal computing and telecommunication devices. And entire industries were born, promising a revolution in the way we manage our association with traditional forms of business and commerce.
Corporations were swept up in the tornado of change, fully expecting the transformation to be revolutionary, irrevocable, and historic. The decade of the nineties unlocked the vault to trillions of dollars in corporate value creation. Equity ownership became widespread, and wealth begat still more wealth through a seemingly endless cycle of venture capital, IPOs, and stock options, all sustained by the irrepressible optimism of future gain.
During this period of hyperchange, corporations unwilling to be left behind the power curve used their own ballooning paper wealth to leverage their growth rates. Top-line revenue generation was king, leaving bottom-line earnings to a distant consideration. The fastest ways to achieve that revenue growth was by:
1. Growing it organically (in-house) through existing customers
2. Stealing it from competitors, thus, growing market share
3. Buying it outright through mergers and/or acquisitions
The meteoric rise in corporate equity values in the 90s made the latter irresistible, and companies in record numbers bought the revenue that they couldn’t grow through inflated stock swaps and equity stakes. Valuations became unsustainable, and an atmosphere of “irrational exuberance” permeated the thinking of even seasoned economic veterans.
The equity-backed financing party continued unabated until the spring of 2000, when the invisible hand of the rationalized marketplace found the last greater fool to buy into an unsustainable growth model. There was no one left willing to purchase stock on those severely inflated terms, and those who hadn’t yet left the party were destined to suffer the inevitable collapse and ensuing morning-after hangover.
When the rationality of economic daylight returned, the global corporate community surveyed the damage, and this is what they found: Rivers of revenue had shrunken to trickling creeks; idle capacity was embarrassingly excessive; and human resources were fat, abundant, and more concerned with their personal portfolios than the business of business. In the light of day, the drunken marriage of seemingly strategic business partners seemed more like a haphazard wedding of some very high-priced strangers. Restructuring became the new buzzword, and over the next several years, goodwill write-offs and very painful restructuring charges would push the global economy into recession.
But, the financial portion of the global technology and industrial restructuring would only be part one of the total solution needed to put the economies of the world back on track. A much larger portion of the rehabilitation efforts would need to be achieved through a back-to-basics renewal in strategic leadership and vision.
The new millennium finds regional, national, and global corporations saddled with a hodgepodge of newly acquired business entities sporting distinctly separate cultures and a diverse understanding of their own strategic significance within the corporate body. Cutting the debt load and scaling back expenses, while helpful, will neither unify the corporation nor give it direction and purpose. That unifying direction needs to come from the top. The leaders must reaffirm and clearly articulate their organization’s values and vision, and be responsible for charting the coordinated and cohesive plan to achieve them. They need to get organized by developing and clearly communicating to the organization their strategic roadmap.