Business Alignment: How to achieve it in Three Specific Steps
Much debate, concern and mystery surrounds the issue of business alignment. Everyone talks about it, management requires it and we know that alignment must be accomplished with HR projects and programs. But how is it achieved? Here is a simple approach to achieve alignment.
Figure 1 shows the connection between the initial need for a particular project, the objectives of those projects and the evaluation of those projects. The process starts at the left side at the top of the figure, the beginning point for the project. It moves through the different levels of needs assessment and analysis until the project is identified. Along the way, the objectives are developed at each level. Finally the project is evaluated at those same levels. These levels of evaluation connect to levels of objectives and to levels of needs assessment. Now, let’s think about the process of business alignment.
In the Beginning
The first question is simple: Is there a payoff opportunity with this project? In this step we examine the payoff needs. Is this a project worth pursuing? Will it generate enough benefits to overcome the costs? Sometimes this is obvious and other times it is questionable, which may mean we need to dig a little deeper, moving to the business needs. What is the actual business measure being addressed? This is the first connection to business alignment. Specific business measures are identified, such as productivity, cycle time, customer complaints, sales growth, absenteeism and employee turnover.
Next, we must ensure that a solution is selected that connects to the business need. Therefore, we ask questions about job performance. What are employees doing (or not doing) that is influencing the business needs? The answer identifies what must change in the workplace. This begins the development of the solution.
After we have identified performance needs, we must determine what learning is needed to support the performance. What do employees need to know that they do not currently know to achieve this redefined job performance? After the learning is defined, determine preference needs. What is the best way to deliver this project? How should the employees react to it? When is the best time to implement it? This level is about preferences for the different stakeholders.
Collectively, the five levels provide thorough needs assessment and connect the business need to a specific solution.
During the Project
The next business alignment phase occurs during the program, using impact objectives. As the business need is identified, one or more impact objectives are defined. These specifically define how much the business measures should change.
Here are some examples of impact objectives:
- In three months, grievances should be reduced from three per month to no more than two per month at the Golden Eagle tire plant.
- The average number of new accounts opened at Great Western Bank should increase from 300 to 350 per month after six months.
- There should be an across-the-board reduction in overtime for front-of-house managers at Tasty Time restaurants in the third quarter of this year.
- Employee complaints should be reduced from an average of three per month to an average of one per month at Guarantee Insurance headquarters.
- The average number of product defects should decrease from 214 per month to 153 per month at all Amalgamated Rubber extruding plants in the Midwest region.
- Sales expenses for all titles at Proof Publishing Company should decrease by 10 percent in the fourth quarter.
Impact objectives provide the focus needed by all individuals so that they are focused on the business alignment throughout the process. Objectives provide business focus for participants (i.e. employees), their immediate managers, various facilitators (if they are involved), the organizers and the sponsors. Essentially, everyone involved clearly sees the business focus throughout the project.
After the Project
Data are collected along the same five levels to see how well the project has succeeded: reaction, learning, application, impact and ROI. Business impact is measured from the records, pinpointing the change in the measures. This is the same business measure identified in the business need and highlighted in the impact objectives. We are monitoring a fact—a measure has changed. To achieve the ultimate validation of business alignment, the fact must be connected to the project. This is where the issue of isolating the effects of the project comes into focus. In reality, there are many processes that often drive a business measure. While a variety of techniques are available, a simple process often used is estimation. The most credible person involved (sometimes the employee or the manager of the employees), sorts out the various factors that could have driven the measure. This person discusses the impact of the various factors and allocates a percent of the improvement to each of the factors, including the project in question. Although this is a guess, it is coming from the person who knows it best. However, because it is a guess, the error must be removed by asking one more question: What is the confidence in your allocation on a scale of 0 to 100 percent? If a person is 80 percent confident in the allocation, in essence, there is 20 percent error in his or her guess. The 20 percent of the change in the business impact measure is factored out of the analysis. While there are other methods to isolate the effects of the project, this is always possible. This step should always be tackled to validate the business alignment.
Business alignment is achieved in three phases of a particular project. First, in the beginning, the project is connected directly to the business measure. Second, alignment through the project is maintained and is achieved with a constant focus driven by the impact objectives. The objectives ensure that business alignment is there. And finally, to validate that the business alignment has been accomplished, the effects of the program must be isolated on the change in the business measure. There it is, in simple terms, how business alignment is achieved for a specific project or program.