The following are common questions we often hear from CEOs in a variety of different industries. “Why is it,” they ask, “after our senior management off-site where we agree and then announce the strategic direction of our company, then encase the strategy in plastic and in a slick brochure, six months later no one can tell me what the strategy is of our organization?” ”Why is it that problems that we think are fixed do not remain fixed. For example why is that costs continue to rise after we successfully reduce costs?” ”Why is it that it takes so long to get important things done?”
The answers to these questions can be found in an understanding of organizational alignment. In its most basic form, organizational alignment consists of two primary dimensions—vertical alignment and horizontal alignment. Vertical alignment is the critical link between an articulated strategy and the people who execute it. Senior executives often do not recognize that strategy is executed from the bottom of the organization, not the top.
Horizontal alignment is the link between customer requirements (both internal and external customers) and core processes.
In our work, we’ve created a typology of what we call organizational pathologies—when a breakdown occurs between or within vertical and horizontal alignment.
Strategy Interruptus is our way of describing the failure of people to understand and connect to organizational strategy. It’s caused by a disconnect between the articulated strategy and the people who implement it. People need to not only understand the strategy but need to see the connection between what they do and the strategy.
The failure to do that results in another pathology, which we call The Tyranny of One. It’s perfectly understandable for individuals to focus on their primary responsibilities and departments. And indeed, the reward system in most organizations fosters that behavior but often at the expense of the greater good.
The Phantom Limb Syndrome is our term to describe the phenomenon that most people are comfortable with old data, with the old ways of doing things. Like people who have lost a limb and nevertheless still feel the pain, or the existence of that limb. When confronted with facts that conflict with what they expect or desire, people find ways to reinterpret, or discount those facts. The misalignment associated with this pathology is generally found in the company’s processes, the old way of doing things. The company might have a great strategy and total buy-in from well- trained employees, but if they’re responding to signals from a phantom limb, they will not develop or deliver what the market requires. The antidote to the Phantom Limb Syndrome is a measurement and information system that people believe in. If employees have faith that the signals they getting from customers and/or their competitors are relevant and accurate, they will be less inclined to deny the data and will stop responding to phantom signals.
In our book, Rapid Realignment we tell the story of the Farmington Bank. The bank had been in existence in Farmington Connecticut for 100 years. All of the executives were comfortable in the knowledge that they were the best-known and most beloved bank in town—until a new CEO commissioned a market research study that clearly showed how customers perceived the bank. They discovered that they were the least known bank in town.
The Forked Tongue Syndrome exists when the company says one thing but acts in some contradictory way. For example, when it asks people to work as team players, then rewards them for individual accomplishment.
One of our clients, for many years the premier communications company in the world, persisted in acting that way, until competition and technical advancements spelled it’s doom. We called this tendency Dead Man Walking. See IBM, Wang Labs, Eastman Kodak and the “old Ma Bell,” AT&T.