Strategy: Aligning your company

Many organisations believe they have a winning strategy underpinned by strong individuals and functions, but still fail to perform to anywhere near their potential and in some cases their future security is in danger. Although operationally efficient, some functions are not in alignment with the rest of the organisation. From our vast experience in performance improvement, we have identified that aligning and synchronising each function and individual is a common characteristic in highly successful organisations. Resolving the alignment synchronisation problem is a real challenge and often a key differentiator between you and your competition.

Challenges     

Significantly improving one function can result in a negative impact on the business as a whole. How is this possible?

Each function in an organisation has a few key measures, “key” meaning a real influence on their behaviour, misalignment occurs when these key measures are in conflict. For example, the sales function could have a key measure on sales value per period and operations can have a key measure of due date performance. Misalignment here can result in sales selling beyond capacity and operations unable to deliver jeopardising major accounts, while the sales team are celebrating record sales. From our experience other negative effects include:

1. New product development misaligned with marketing launch can lead to significant erosion of market share
2. Unnecessary discounts can lead to poor profit performance
3. Cherry picking orders to maximise efficiency can lead to late deliveries
4. Pushing the wrong product range based on sales value can lead to low margins
5. Minimising inventory as a key measure can result in missed sales

Achieving Alignment
Goldratt can help you:

1. Identify – the strengths of your current measures by function
2. Analyse – the behaviours stemming from the key measures
3. Remove – unnecessary measures that do not provide any benefit that just feed misalignment
4. Understand – the remaining conflicts between necessary key measures and their resulting behaviours
5. Communicate – gain a company wide understanding of the remaining conflicts
6. Manage – amend current policies to resolve the conflicts in the direction of the overall strategy
7. Drive – Use the measures to drive the business hard towards the vision

Contact us to discuss how we can work together increase the success of your organisation and receive a How To guide walking you through identifying your current strengths and analysing the resulting behaviours in your organisation.