VOC OHs master part 1 - Enterprise Architecture Conference

Enterprise Leadership:
Unleashing the Power of
Alignment
DoD EA Conference
15 April 2011
George H. Labovitz, Ph.D.
Government Enterprise Challenge
 “Government
is in the business of
consuming resources. Stovepipes of
activity are prevalent, and leaders are
incentivized to obtain larger budgets, hire
more people, and create more
infrastructure. These are the measures of
individual success in government. To
achieve the Enterprise Effect, leaders
must adopt a different set of behaviors
and demonstrate them to others.”
VADM Walter Massenburg, USN (Ret)
Organizational Alignment…
A Definition
The degree to which key elements
of an organization’s infrastructure
are tightly integrated and working in
concert with each other to
accomplish the mission.
Admiral Clark-Sea Power 21
"Better alignment enhances mission
accomplishment and reduces costs through
organizational and process efficiencies.”
“When an organization is aligned, everyone
from junior to senior shares an understanding
of the goals and purposes of that organization
allowing them to contribute to their fullest.”
“Aligning our organization is an ongoing effort
that involves continual assessment of
processes and systems."
Admiral Mullen on Alignment
“Alignment is the degree to which
resources, processes and
communications support vision and
mission. A properly aligned organization
can accomplish anything it attempts.
Every Sailor should share an
understanding of our vision and mission
and be able to describe how he or she
contributes to them.”
The Links in the Service-Profit Chain
Operating Strategy and
Service Delivery System
Internal
Service
Quality
Employee
Retention
Employee
Satisfaction
Revenue
Growth
External
Service
Quality
Customer
Satisfaction
Customer
Loyalty
Employee
Productivity
 Workplace design
 Job design
 Employee selection
and development
Profitability
 Service concept:
results for customers
 Retention
 Repeat business
 Referral
 Employee rewards
and recognition
 Tools for serving
customers
 Service designed and
delivered to meet
targeted customers’
needs
Stage 1
Awakening
Stage 2
Active
Stage 3
Breakthrough
Stage 4
World-Class
The awakening
organization . . .
The active
organization . . .
The breakthrough
organization . . .
The world-class
organization . . .
“Alignment is not about the
management of quality. It is about
the quality of management.”
—Takeo Shiina, Chairman of IBM Japan
The Alignment Framework
Strategy
Processes
Leadership
Customers
Culture
Measurement
People
The Alignment Process
• Create a shared strategic vision for the organization
• Identify key strategic work processes
• Develop a deployment plan to translate the strategic
plan into action
• Align all organizational work with strategic vision
• Design an ongoing process for systematic review
• Identify critical success factors
• Design of metric systems
Strategy
• Align culture with strategic
vision
• Core process identification
• Communication strategy
• Process reengineering
v
• Process improvement
• Identify critical “strategic”
customers
Processes
• Ongoing process
management
• Design of metric systems
Leadership
Customers
Culture
Measurement
• Training
r
for leadership in
rapidly changing operating
environment
• Identify customer delight factors
• Create the organizational capability and
infrastructure to continuously gather
“actionable” customer data and use it
to drive process improvement and
design
• Design of metric systems
• Design of metric systems
People
• Identify corporate and individual competencies necessary
to achieve the strategic vision
• Design and align reward and recognition systems
With organizational goals and desired competencies
• Identify current competency levels
• Design of metric systems
• Design and deploy plans to “close the gaps”
The Military / Government
Alignment Framework
Mission
Processes
Leadership
Culture
People
Those We
Serve
Vertical Alignment
Mission
Processes
Leadership
Culture
People
Those We
Serve
The Main Thing
•
The main thing for the organization as a
whole must be a common and unifying
concept to which every unit can contribute
•
Each department and team must be able
to see a direct relationship between what
it does and this overarching goal—the
main thing
•
The main thing must be clear, easy to
understand, consistent with the strategy
of the organization, and actionable by
every group and individual
The Strategy Execution Cycle
Organization
•
•
•
•
Vision
Mission
Values
Perf ormance
measures
• Compensation plans
Env ironment
•
•
•
•
•
Market
Community
Regulations
Competition
World-class benchmarks
Rew ard and
Recognition
“Stretch
Goals” and
Measures
•• Immediate
•• Long-term
Employees
Site Rev iew s
•
•
•
•
Self
On-site
Process
Results
Daily Work
• Integration
• Continuous
improvement
• Fixing errors
•
•
•
•
Basic requirements
Unstated needs
Delight f actors
Perspectiv e on
customer satisf action
• Prof essional expertise
Process Improv ement
Customers
• Basic
requirements
• Unstated needs
• Delight f actors
Structure Tree
Critical
Success
Factors
Operational
Mission
Cultural
Critical Business Systems
Stretch Goals
Activities
and Tactics
Measures
and Targets
Management Review
Overall
• What is the overall level of understanding of the Goals
within the organization?
• What are additional enterprise-wide support needs?
• What are the “best practices” which can be shared with
other units of our organization?
• People Goal
• What actions are being taken, and what are the results?
What are the challenges to employee understanding?
Management Review (Continued)
Customer Satisfaction
• How is the “voice of the customer” being heard? What are the
measurements used to track customer satisfaction?
• What efforts are underway to better understand customer needs and
provide “best value”?
• Operating Effectivenes
• What are the key processes being worked on? Why were they
selected? How do current efforts enhance value from the customer’s
perspective?
• What sharing/leveraging of strengths is taking place across the
enterprise? What economies of scale are being realized?
Horizontal Alignment
Mission
Processes
Leadership
Culture
People
Those We
Serve
VOC Brings the Customer Inside
Total Customer Focus
The voice of the customer driving
what is done and how it is done
through partnering across the
organization.
Five Big Questions
1. What do our customers care about the
most?
2. What opportunities do we have to delight
them?
3. How well are we satisfying our customers
right now in terms of what they care
about?
4. What are the “Best of the Best”
companies doing to delight their
customers?
5. How does the way we operate make us
“difficult to do business with?”
Partnering: 7 Questions
1. What do you really need from me?
2. What do you do with what I provide you?
3. Are their any gaps between what I give
you and what you need?
4. What problems do you face that I might
help you with?
5. Am I providing things you don’t need?
6. What happens to you if you don’t get what
you need from me?
7. How will you know we are working
successfully together/
Eight Steps to Achieve the Enterprise Effect
at NAE

1. Identify the Domain and assign a Single
Process Owner. Identify the boundaries of
dollars, people, intellectual capital, etc. to create
a new operating model.

2. Assemble the right enterprise team. Only those
who bring dollars, people, intellectual capital, etc.

3. Operate in support of a single customer driven
metric.

4. Agree on the desired outcome.
Eight Steps (cont.)

5. operate with discipline, governance and a set
schedule.

6. Baseline every dollar, people and intellectual
capital within the Domain with assigned
accountability for outcomes.

7. Establish the resources (entitlements)
necessary to achieve the outcome.

8. Remove barriers to productivity.
Enterprise Leadership Behaviors

Ego must be left at the door. Leaders in Naval
Aviation learned to subordinate their activities to
the Main Thing of the Navy.

Empathy. Leaders had to be willing to face the
reality that they were independently unable to
produce the warfighting capability the country
depended upon. Leadership needed to spend
time in the field listening to and empathizing with
their ultimate customer.

Passion/Courage. Leaders maintained forward
momentum and learning. Those who did not
agree with change were asked to step aside in
favor of others. Identifying and growing the next
generation of leaders was essential to continued
progress.
Enterprise Leadership Behaviors (2)

Clarity. Leaders had to be able to describe all
their activities in relation to the vision and to the
“Main Thing.”

Constant Focus. Leaders had to adopt a new set
of governance principles and then use
“drumbeats,” a disciplined schedule of events, to
be visible, to breakdown barriers, and to drive
change.
NAE
 The
Naval Aviation Enterprise
dramatically improved the
operational availability of aircraft and
returned over two billion dollars a
year to the Navy.
“ The hard stuff is easy—the
soft stuff is hard.”
Fred Smith, Chairman
FedEx
Leadership Behaviors Essential to
Alignment
• Create Shared Purpose
• Help others understand
• What must be accomplished
• Why their work is worthwhile
• How they can accomplish their goals
Leadership Behaviors Essential to
Alignment (Cont.)
• Gain Commitment
• Increase people’s sense of personal
ownership for the work they do.
• Drive out fear to improve performance.
• Help yourself and others visualize high
performance.
Leadership Behaviors Essential to
Alignment (Cont.)
• Integrate the Organization
• Make information readily available to
everyone, and avoid the tendency to
control information.
• Design networks of relationships to
promote flexibility and high
performance.
• Help groups integrate conflicting views
to achieve technically superior and fully
supported outcomes.
Distributive Leadership
•
Keep people continually connected to the
business environment in which they
operate
•
Help people think holistically
•
Always keep people connected to the
main thing of the entire business
•
Reward and recognize people for working
toward the main thing
•
Use the review process to carry the
message to employees
•
Create opportunities for people to interact
Alignment
“Attaining alignment… is a neverending process of identifying and
doggedly correcting misalignments
that push a company away from its
core ideology or impede progress.”
Collins and Porras
Authors of Built to Last
The Power of
Alignment
Results
NHCP Results
•
94% of Eligibles Enrolled
•
95% Overall Access Standard
•
Same Day Appointments
•
Won Surgeon General’s Customer Service Award for
“Getting to Yes” Program
•
Maternal Infant Service Won Malcolm Baldrige Award
•
Ranked #1 of 37 Naval Hospitals
•
CEO named Johnson & Johnson Federal Hospital
Administrator of the Year 2007
A Wireless Communications
Company

Results

New customer gains improvement of 116 percent

Average cost per gross customer gain has decreased 23
percent

Customer and employee satisfaction indicators have
increased in all markets and at corporate headquarters

Customer CHURN has reduced 11 percent, equaling
$35,000,000 gain

Overall cash cost per unit has decreased 13 percent

Overall cash flow margin has increased 13 percent

One of the top 20 EVA companies in the U.S. (Fortune
Magazine)
A Trucking Company
 Results

50 percent increase in billing accuracy

Industry leader in profits

Number one in industry customer satisfaction—up
from third

Safety records set in 5 out of 6 key measures

Joint team with key customer cut cycle time and
unloading cost by 50 percent

New organizational systems now developed by
cross-functional team
A Major
Telecommunications Company

Results
 Expenses as a percentage of budget decreased by 25
percent
 Inventory turnover ratio increased from 3.9 to 8.9 percent
 Product quality (percentage meeting standard) increased
from 93.5 percent to 97.4 percent
 Repaired product on-time delivery increased from 60 percent
to 94 percent
 Company delivered $66 million in products to a key
customer without missing a single order, thus winning the
customer’s Marketer of the Year award
 Employee satisfaction increased dramatically and could be
measured against national norms rather than trauma norms
A Railroad

Results

Stock price increased by thirty points

Personal injuries decreased by 74 percent over a two year
period

Company moved from seventh place to first in safety for the
industry, and changed safety goal from best in industry to no
injuries

Billing accuracy improved from 87 percent to 97.5 percent

Locomotive reliability doubled

Company was given “Award of Excellence” by the
International Customer Service Association—the first
transportation
company ever to receive it

Customer acceptance rate was increased to 99.7 percent

Major customer selected company as “Carrier of the Year”
Biotechnology Division of a Major
Pharmaceutical Company

Results

Sales revenue has doubled

Company is profitable and one of the most admired in
the industry

Customer satisfaction index has documented a
threefold increase in the average volume of purchases

Order backlog has been eliminated

Employee satisfaction has dramatically improved, and
turnover has decreased

Customer-focus measures were developed

Downtime in key manufacturing processes has been
reduced by as much as 50 percent
Semiconductor Equipment
Manufacturer

Results

Became recognized as leading supplier of
semiconductor equipment

Increased stock prices from under 6 to 28 in a twoyear period

Doubled sales revenue

Increased market share from 15 percent to 24
percent in two years

Became profitable and one of the most admired
companies in the industry

Recognized as repeat winner in an industry
customer satisfaction survey

Won a supplier award from a key customer