We're talking about strategy execution, and what we want to do now is dig a little bit deeper into the elements required for successful execution. We're using a 4A model of alignment, ability, architecture and agility. Those elements that are critical for making sure that the organization is ready and able to execute strategy. We're going to start with the first one which is alignment. And as we go through this module, think about maybe questions such as the following. What do we mean by alignment? What goes into and what is required? Why is it so difficult to achieve? And related to that, why do organizations come out of alignment so that there's inconsistency and noise in the system. And at the end of this we want to get to some very specific points in terms of what are the keys to successful alignment. Of those elements that you would focus on, which ones matter most? Now the objectives are we want you to be able to evaluate different forms of strategic alignment. Now earlier in the course you talked about a couple of forms of strategic alignment and they relate here as well. But there's a couple of elements that will add to this and they all work as a system. There are some things that drive organizations out of alignment. And we want to look at the risks and the underlying causes for why you might get misalignment. And then of course how to get the organization back into realignment. We're going to identify some of those keys. What is really the element that matters most in terms of executing your strategy? So in previous modules you've talked about external alignment and internal alignment. External alignment is of course the notion that the organization operates in a manner that is fit for purpose to support the market strategy. You can think of a number of different companies. Think of Four Season's Hotels, right? They're value proposition is this one of a kind unique experience that you'd have as a customer there. Every thing that Four Seasons does is aligned around that value proposition. Where they put the hotels, how they design the hotels, the spas, the restaurants, the reservation system, how people greet you and meet you, they take care of the rooms. Everything is focused on that one value proposition of a unique experience. They're not trying to be the biggest hotel. They're not trying to be the available hotel. They're not even trying to be the fanciest. It's all aligned around this notion of a unique one of a kind experience for you. The internal alignment is all the processes and practices, and structures work together, and they reinforce one another. So it doesn't matter whether you're looking at the reservation system or the operations in the spa. It's really all about you. The one we want to add to this that I think is really critical for execution is what we call leadership alignment. This is consistency of perspective and effort toward a common strategic intent. So in an organization like Four Seasons it doesn't matter if you are the CEO or the CFO or a chambermaid or the pool guy. Everybody is focused around this one value proposition and all of their work, as different as it is from one another is aligned around this one purpose. Now an example of a company that I think is a cautionary tale is IBM. For me, this is a good example of how an organization can be in alignment and then get out of alignment. If you go back to the 1980s, I would argue, IBM might have been the best company on the planet. They had more talent than anybody. They had Nobel Prize winning scientists. They had a culture that was incredible that so many organizations want to bench mark. They had leading edge technology. They had innovative products. They had market share like you can't believe. In fact, they used to talk about IBM not as the competition, but as the environment. Their market share was so dominating and, by the way, they made a lot of money. This organization really was aligned, internally consistent, and driving excellence. But what's interesting is ten years later, IBM was nearly out of business. And what happened? How does a company go from the summit to flat out on the tarmac? What happened at IBM? Well, people will argue that it came out of alignment because it missed a shift in the market. Not to oversimplify, but some would say IBM missed the shift from mainframes, these big powerful computers, to smaller distributed systems and PCs. The organization had processes and structures and systems that weren't working together. There was a fair amount of problems in terms of the way the organization was working, they were slow, they were lumbering and in fact, different parts of the organization are working on different things and it wasn't coming together for customer's. The management team, I would say, we're working in silo's. In fact, some have said that the senior leaders were presiding over the organization and the culture became a little lackadaisical and lost it's energy. Well, so as the company stumbles, a new CEO came in, a man named Lou Gerstner. Lou Gerstner made some very difficult decisions to get the organization back in alignment. The first thing he did was he formulated his management team. He made it smaller, he got them working together and he needed them in the game. He then focused on the customer. And he re-analyzed what was needed in the market and they came away with a value proposition focused on integrated solutions where hardware, software and services consulting all worked together for the customer. He actually reversed a plan to pull the organization apart and he kept it all together. Now, part of the alignment for Gershner was also looking at the processes and systems, and he went through a massive reorganization and a re-engineering of some of the core processes in the organization to streamline the organization and make it more nimble. And finally, he changed the culture. He needed people to work together and have more of an edge towards winning business and delivering for the customer. Well, Gerstner would say that alignment was probably the key of getting this organization back in business. They always had good people, they always had good technology, but his view was the organization had to work together and be aligned to the customer, and what he said was a lot of people saved IBM. He gets the credit. He, of course, was at the top of the organization but it was a whole group of people that made the difference and IBM is a different organization than it was then. But I think a very good example of the importance of alignment for execution.
