Failure to properly align the front end of an automobile results in excessive wear of tires and suspension parts, a vehicle that pulls to one side or other other, lower fuel economy and a generally unpleasant experience for the driver and passengers. There are multiple suspension components involved, so the entire vehicle is compromised if the vehicle is out of alignment.
You can probably visualize where I’m going with this concept of alignment as it relates to business! Failure to properly align the steering mechanism of a business results in excessive wear and tear on employees, a business that is hard to lead in the desired direction, reduced financial performance and a less than desirable experience for customers. There are multiple business components involved, so the entire operation is compromised if the business is out of alignment.
Alignment in a business involves these five components:
- Core Values. The crucial principles that support the business and guide every decision must be identified, shared and lived by employees. These are the structural elements of a business suspension. Leadership begins here.
- Purpose. Where the business is headed must be clear to everyone on board. When purpose is out of alignment, the business will pull in one direction or another and may veer completely off track.
- Resources. Human, Material, Information and Financial Resources must be carefully aligned and synchronized for a smooth ride.
- Measurements. Essential settings for tracking resource utilization are calculated and calibrated along the way. Alignment occurs through accurate measurement against tolerances, then carefully making required adjustments.
- Incentives. When alignment is referenced in the context of performance incentives, the chosen settings depend completely on the four elements that precede it. If incentives are out of sync, the business will not track as intended, but it will track in the direction that the incentive settings indicate. You will often get the results you incentivize, though they may not be what you want. Incentive balance is the last crucial step in business alignment.