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October 19, 2005

The Art of Aligning Alignment

Business reaches necessary levels of performance by relying on processes. And meanwhile, most of the critical processes are now powered with IT. There is abundant evidence that from a planning perspective this is usually a good idea.

But ironically, this same chain of connections makes it persistently difficult to make and rely on strategic assumptions about performance. Why?
- Because of the complexity of existing operations, management often sets performance requirements without really knowing if it can rely on its processes to keep up with them. For this issue, management is looking for what it calls the alignment of strategy and execution.
- Meanwhile, another part of what underlies uncertainty is the quality of IT's enablement of the processes. For this issue, management is looking for what it calls the alignment of business and IT.

But business has now learned that the two types of alignment are interdependent; one rarely succeeds without the other. So the alignment of strategy and execution must constructively intersect with the alignment of business and IT, which at first adds more complexity while also being relatively new. So the necessary combination seriously challenges business management, particularly in terms of timing, funding and politics.

Without a clear view of the scope of the challenge, solutions are more likely than not to be under-developed versus the forces that can prevent them from ensuring sustained effective support. Additionally, it would be difficult to understand the sensitive trade-offs of starting out with one emphasis versus another.

Processes are at the intersection. Illustrating the scope of issues around the process shows that a small group of intensively defined management elements "parse" the complexities of aligment into different points of view. These elements are:
- objectives
- policies
- information, and
- resources.

When alignment stakeholders are surveyed for the visibility they have on these elements, it is not unusual that the elements are checkpoints which vary in completeness, in priority, in content, or in any mix of those three, amongst the stakeholders.

This means that the bases for alignment are likely missing supportive agreement. While authority can drive action forward anyway, consensus is much more important to sustained effectiveness.

Assuming a reasonable level of consensus recognition of the basic elements, the next thing to confidently establish is the way they combine to generate critical points of view on alignment. These points of view -- strategy, governance, planning and execution -- usually show up as functional issues that get measured and therefore make up the "performance" picture of management. In the picture below, the general separation of these viewpoints, resulting from the interplay of management elements, is mapped out for navigation.

As illustrated here:
- the policy element decisively intervenes in the presumed alignment of strategy and execution -- but the predisposition of strategy is critically influenced by objectives, while the predisposition of execution is critically influenced by information.
- The strategy point of view has a clear line of sight to objectives and policies, and tends to understand processes through that visibility.
- Because policies are dynamically involved with execution, and objectives are dynamically involved with governance, strategy likely influences the governance and execution points-of-view through its impact on policy and objectives -- impact that for better or worse is usually negotiated if it survives.

Each point of view, taken in turn, has the same kind of relationships with its contiguous elements.

Overall, the surprises are:
- that strategy and planning are so indirectly coupled, but this explains why comprehensive plans are so complex;
- that "Business-IT" alignment is not overtly signified at all, but this is because business is an "overlay" to the entire picture, while IT is an "underlay"; and,
- that process is so multidimensional, requiring coordination of as many as four elements before it should be considered stable and mature -- but this explains why despite automation and best practices, one size does not fit all.

A key aspect of the different points of view is that they typically have "owners". Because the points of view drive motivation, the issue of their cooperation is essentially a very high-level one. Cooperation stems from motivation, and the picture shows that motivation is affected by the management elements and also by the executive agenda. The four typical components of the executive agenda, which we consider to be executive "drivers", are Goals, Risks, Perspective and Competency. Taken all together, the four drivers from the executive agenda approach being a definition of the organizational culture, but in daily effect they are more or less political. In the way the drivers work together, they generate the points of view we discussed above, and thus they precondition the prospects for consensus.

For example, strategy represents an "alignment" of goals and competency (or it better!), while governance represents an alignment of goals and risks. If the understanding of competencies is too divergent from (and unrelated to) the understanding of risks, it becomes significantly more difficult to successfully configure goal-pursuit as strategy and governance, making defense of objectives hard to implement.

The surprise at the driver level is the role of perspective. Perspective should be looked at as the location of beliefs, expectations, and knowledge -- all of which are generally "organized", in ways that aggressively affect the interpretation of data as well as both planning and execution. It's not surprising that perspective is a driver, but instead that it is more critical to the alignment of planning and execution than are the other drivers.

In the big picture, it is tempting, but incorrect, to see "Business" on the left side and "IT" on the right side -- and then look for "alignment" across the middle. Instead, the problem of Business-IT alignment begins with defining what the phrase means, and the most reliable working definitions bring the picture into use as intended, to study the intersection of the two major kinds of alignment.

The typical problem that Business has with IT is that the impact of the use of IT disagrees with the requirements of supporting the objectives that represent business progress. But as big a problem as that is, it still understates the real need that the business has of IT.

Instead, for alignment with the business, the management of IT needs to focus on how IT's impacts strategically support the coordination of the drivers, points-of-view, and management elements shown in the integrated alignment picture.

Because there are at least those three concentric areas to affect, and four points within each area, there are a very large number of influences and cross-influences to establish and coordinate -- all in the face of potential change at any point, at any time. Clearly this will be anything but simple; but as a starting point for recognizing the challenge we at least can say that IT's management is likely wasted effort if it is not dedicated to the coordination represented in the picture of alignment.

Posted by Malcolm Ryder at October 19, 2005 11:01 AM

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