Think of your business like a car. You need not only a good plan on where you want to go but also a well-tuned vehicle to get there. If any part—engine, transmission, tires, steering, etc.—isn’t in alignment, you won’t enjoy the ride. The same is true for any organization. You need alignment across your business to be successful.
For example, a business wanted to enter a new market. The manager outlined a new strategy. She communicated it to the team. Three months later little had changed. Then she created incentives to focus more effort on new market opportunities. Results still occurred slowly. What happened? How can she improve performance?
Bold changes, profitable growth, and long-term results require full organizational alignment. All elements of an organization need to work together to yield desired results. The seven key elements are shared values (or hopes), strategy, structure, staff, skills, systems, and style.
In the early 1980’s, McKinsey & Company, an international management consulting firm, developed the 7S framework. This framework highlights how the elements of an organization interact. Tom Peters and Bob Waterman, colleagues of mine at McKinsey, described this concept in their best seller, “In Search of Excellence.”
In the intervening years, I have adapted the 7S framework to diagnose problems and improve organizational performance in many businesses. I’ll briefly describe each of the elements as I use them and then discuss how the framework creates value.
As you read the elements, consider some problem or opportunity you are confronting. Where do the elements support what you want to accomplish? Where do they detract?
- Shared hopes. Where is your organization headed? What are the key principles that guide it? Does everyone in your organization share these principles and aspirations? Do your objectives fit with these shared hopes?
- Strategy. What’s the plan for putting your hopes into action? Does your business need to revise its strategy to achieve new goals?
- Structure. Does your organization’s structure support your objectives and strategy? In other words, do the positions have clearly defined responsibilities to implement the plan?
- Staff. Are the right people in the positions? Do they know their roles? Do they have proven experience in accomplishing similar tasks?
- Skills. What skill sets do you need to accomplish your objectives? Does the organization have them? Which new ones will it need to develop or acquire?
- Systems. Do the production processes, information systems, financial measures, incentives, and other mechanisms support the team’s objectives? Do your systems make up for gaps in staffing or skills?
- Style. Is there a consistent way of doing things in your organization? Does it fit with your business objectives and the marketplace you serve?
There isn’t one right way to do any particular element. That’s why so many “how to” books and sources of advice have limited effectiveness. They focus on just one element (for example, strategy, organizational structure, or motivation). Superior performance requires attention to all of the elements. You need a mix that works for your business.
Let’s look at how a client aligned its organization to achieve major improvements. A new plant manager wanted to coordinate operations and maintenance to improve bottom-line performance. Each department had its own separate and well-entrenched ways of doing things.
Here’s what happened to implement the strategy. The plant manager changed the organizational structure. He created combined operations and maintenance teams around individual business units. The two departments met together to develop a shared set of hopes for the organization. The organization promoted managers who demonstrated a collaborative style.
The participants learned and applied new problem solving skills. These skills incorporate the best thinking from everyone involved.
They modified the financial systems to report consolidated results in addition to individual department results. And, they changed meeting schedules so that unit teams could discuss production and maintenance needs at the same time.
The organization addressed all seven elements. Consequently, it achieved a major shift in a short time. The participants also enhanced their ability to tackle problems and develop new opportunities.
Sometimes it’s not possible to change certain elements of an organization immediately. For example, imbedded systems may take too much time or money to change quickly. In such a case, use the framework to analyze how other elements can compensate for the constraint.
How is your organization aligned for success? Commit the time and effort to coordinate all seven elements. You’ll gain long-term benefits.