In my previous two posts we saw briefly why aligning your offerings with what customers value is crucial for your organization and how you can do it. In this post and the next post I will tell you more about how to do this. A large part of these posts is based on ideas and work from my companion Vaughn, who wrote about this in an earlier post too.
Creating alignment in your organization is quite a challenge. The first issue is to know what to align. There are various frameworks that offer guidance for this. You may know McKinsey’s 7S model, for example. It breaks down the notion of ‘organization’ in seven elements (strategy, structure, systems, skills, staff, style and shared values) that all need to be aligned. Following this same idea, my own two frameworks, the Strategy Sketch and the Organizational Map break down the notions of strategy and organization into ten key elements that also need to be aligned.
Knowing what to align is important. It is only half of the story though. You also need to know what to align on. After all, you need to start somewhere as basis for creating alignment. The easy answer is that you just pick one element as anchor and align the rest with it. You start for example with your mission, vision, goals, ‘why’ or customers and then make sure that everything else you do is aligned with that. This is an okay solution.
But we can do better. If we go back to the root purpose of an organization, it is value creation. An organization that doesn’t create any value, doesn’t have anything to add in this world and no real reason to exist. Along those lines, it is the kind of value an organization creates that should be the starting point for creating alignment.
What you need for this, is a value creation profile that shows what value your organization creates. You can think about a value creation profile as the DNA of your organization. Some organizations are built to produce fast and cheap, while others are good at tailoring products to customer needs, and still others are good at producing the highest quality product in the market. Such profile is not just about the products or services these organizations deliver. It is about the entire organization. If well aligned, an organization is entirely organized in a way that supports the kind of value that it creates – it is in its DNA. And like your DNA, changing this is not easy. It can be done, but requires a lot of effort.
This means that discovering your value creation DNA is an important, if not crucial, step in creating alignment. The unstructured way to do this is to simply ask yourself what kind of value your organization is currently creating for your customers or in what kind of value creation your organization is very good at. Is it being fast, accurate, cheap, flexible, etc. etc.? Asking this is a good starting point for creating alignment, since, once you know, you can assess whether your organization is sufficiently aligned to actually create that value in the best possible way.
A more structured approach, though, is more helpful and gives you more confidence that you actually discover your value creation DNA. What you need for this is a set of dimensions (or variables) along which you can align everything you do. Since the purpose of any organization is to create value, you need dimensions that help you define what value you create. With these dimensions, you can describe the value creation profile of your organization, assess whether it is the right profile and improve the alignment of your organization with these dimensions. In my next post I will present the four (or actually eight) dimensions of value creation that you can use for this.