Business Agility: A Model for Improving Responsiveness – Pt. 2

This post concludes the series on business agility which I first explored in the March 25 post.

AGILITY IN PRACTICE

Rely on A Good Compass, Not Maps

Today’s business environment changes too rapidly for a detailed and rigid business construct to remain viable for very long.  No matter how detailed you try to make a business map it will eventually mislead you.  Developing a “compass,” however, allows you to navigate territory with a sense of direction, purpose, and by using currently available intelligence and resources to create a path forward. Here again, emphasis is placed on organic strategy, one that anticipates changing opportunities and risks, is purposely alert for their signals, and which allows for mid-course corrections. 

Cultivate Resilience Instead of Strength

Organizations that try to resist failure at all costs view doing so as a strength, often touting that this preserves resources and improves efficiency.  That may indeed be true, but it also limits the amount of experimentation constituents feel empowered to undertake, which in turn can limit the acquisition of knowledge and discovery of opportunities.  There is also the issue of speed.  High intolerance to risk requires than any new initiative or idea be thoroughly vetted by all levels of the organization before approval to proceed is granted, thereby delaying benefits of the initiative (assuming it does not die on the vine in the process).  Entrepreneurial organizations take a different approach entirely.  Here, “failing early and often” is viewed as a learning process that increases knowledge and contributes to future success.  While no one would suggest that all organizations should be entrepreneurial in nature, it is fair to suggest that those which are strongly oriented in the risk averse direction consider the costs of their stance.  Focusing on organizational structures and governance that improve resiliency provides the ability to accept reasonable risk with the assurance the organization can recover when needed.  This generally means a less autocratic structure with “check, plan, communicate, act” systems in place to speed response at the tactical level.

Pull Instead of Push

One common attribute of agile organizations is that they invariably share robust networks.  Social connections among participants provide access to intelligence and resources.  Affect networks are based in shared motives, expectation and business or operational norms.  Cognitive networks focus on shared understanding, common definitions of work, and supportive systems for doing the work.  These networks do not act alone.  While each has its own core there is significant overlap, allowing each type of network to influence the others.  Information, resources, strategies, and operational norms are all shared with trusted partners making resources outside the “home” organization available.  Leveraging these networks can provide opportunities for increasing flexibility and better aligning resources with the need of the hour.  For example, a company may choose not to fully staff and thereby consume labor resource funds when work is fluid and requirements shift.  In this case a company may choose instead to maintain a funding pool which allows it to procure specific skill sets and knowledge on an as-needed basis exactly when the need exists.

Business agility strives to create an environment at all three levels (strategic, operational, episodic) that promotes responsiveness to changing business conditions while avoiding the chaos and trauma that can paralyze an organization undergoing change.  Making increased sensitivity to conditions and robust responsiveness characteristic creates an environment where change is expected and less threatening.  In today’s shifting landscape those are valuable traits, especially in the FM arena.

Using the Balanced Scorecard to Improve Strategic Alignment

The building blocks of strategic alignment; business strategy, FM strategy, organizational infrastructure and processes and FM infrastructure and processes, combine with strategic fit and functional integration to act as the foundation upon which real alignment is built.  While understanding this conceptual base is necessary, it is only the base.  Strategic alignment is an ongoing process and can sometimes be hard to discern, given its conceptual nature.  That is where the balanced scorecard comes in, providing a way to measure FM strategies and outcomes in a way that is clear, relevant to the business, and actionable.

A balanced scorecard measures four dimensions; financial, customer, internal processes, and innovation/learning.  This broad view of the business, as opposed to a traditional financial or operational metrics only view, provides a deeper perspective of current operating performance and future performance drivers.  Because of this broad view perspective, the balanced scorecard is best viewed as a management system, not a performance indicator.

To build a successful balanced scorecard for FM organizations you must address each of the four dimensions.

• Financial Perspective:  How is FM maximizing shareholder value?
• Customer Perspective:  How is FM performing in ways that matter most to its customers?
• Internal Process Perspective:  What are the factors needed to build strategic capabilities and efficiencies?
• Innovation and Learning Perspective:  What are the knowledge, skills, and systems needed to sustain continual improvement?

You can see how these four dimensions act upon each other.  Learning, for example, supports continuous improvement of internal processes which in turn results in higher customer focus and satisfaction.  By linking the four dimensions of the FM balanced scorecard to enterprise strategy FM’s help align their unit strategy with the overall strategy of the business.

This linkage to enterprise strategy is critical.  Many FM’s have balanced scorecards that are FM centric, focused primarily on traditional FM metrics.  While this may indeed indicate how well your operation is performing in relation to broad based FM benchmarking metrics, it may do little to illustrate how your FM department is supporting or hampering the overall goals of your specific business. 

And that is the point, isn’t it?  Understanding how FM relates to your overall business, how you can provide positive support to the enterprise, how you can leverage FM to the benefit of your business are all good things to do. 

In today’s business world being able to demonstrate value and leverage are two critical elements of success.  Those who do these well are at a strategic advantage.  They can explain FM value and importance in specific business-centric terms, they demonstrate attention to improving customer outcomes, they learn and innovate to the benefit of the enterprise.  In doing all of this they act as thought leaders, anticipating and fulfilling the needs of their organizations, aligning FM with the enterprise at strategic and operational levels.

Is that you?  Does it sound like your FM group?

It should.

Relationship Management Is Key to Strategic Business Alignment

When working to strengthen FM strategic alignment with the business do not overlook the importance of a strong relationship management program.  “Program” implies that this effort is intentional, as it should be.  Too many FM’s make the mistake of concentrating solely on the immediate project or task and do not pay enough attention to purposefully managing stakeholder relationships.  Relationship management, however, is a critical element of FM success, especially at the leadership level.

• A close relationship between functional leadership and customers ranked fourth among enablers that help increase strategic alignment.  (Luftman and Brier)

• Conversely, lack of a close relationship ranked first out of fourteen identified alignment inhibitors. (Luftman and Brier)

• Business executives repeatedly downplayed the value of formal organizational structure, but frequently emphasized the critical role of relationships in achieving strategic alignment. (Chan)

The best relationship management programs are not only intentional but also multi-level.  Peer-to-peer communication occurs on a routine frequency at all levels of the organization, informing the alignment process up and down the FM chain.

While it is beneficial that these interactions occur at all levels it is most important that exchanges at the business unit and executive levels be especially well tuned.  This is where the most important information resides and where FM has an opportunity to learn the most about stakeholder issues, plans and initiatives.  With this knowledge FM leaders can be proactive with projects and services in a manner that best supports core business outcomes.  That is, after all, what alignment is about.

At the strategic level executives will want to be intentional about maintaining contacts and a pattern of communication which shares information.  These conversations take many forms, some of them of a more informal nature.

At the tactical level there are many ways to increase the alignment dialogue.  One common methodology is to designate specific Customer Relationship Managers to interact with their counterparts or senior executives in business units.  Often this takes the form of a zone management program in which building specific information and projects  are shared, but it need not be that tactical.  If it is, the strategic dialogue should be a specific touch point as well.

Alignment, however, is not a one way street.  While FM may be seeking to align its strategies and operations with core business strategies this process also informs stakeholders about FM’s capabilities, forward leaning attitude and willingness to be a true partner in the business, not just a “call me when you need me” service provider.  It is a critical difference.  The more business stakeholders accept FM as a full partner in the enterprise then the more leverage FM can apply to positive effect.

Aligning FM with Enterprise Strategy – What Works?

Aligning functional operations and strategy with enterprise strategy first requires correctly understanding what alignment is.  I think the best practical definition I’ve run across is from Y.E. Chan who says,

“Alignment is best described not as a uni-dimensional phenomenon but as a superset of multiple, simultaneous component alignments that bring together an organization’s structure, strategy, and culture at multiple levels, with all their inherent demands.”

Multi-dimensionsal, simultaneous, and I would add, ongoing alignments.  Sounds like a messy process and it sometimes can be.  But there are a number of tactics that will help to make the alignment process successful.

A top down approach with a clear focus on business strategy is essential.   The changes required during serious alignment projects often require top-down motivation to overcome inertia and turf issues.  Senior executives are closer to enterprise strategy and have the ability to exert influence across the organization, and the ability to fund technology and other initiatives. 

The alignment framework must be strategy driven.  It’s all about consistently applying the same key strategies across the organization in a manner that maximizes adoption, market reach and shareholder value.  If the framework is focused on non-strategy issues then the lack of a unifying driver can present obstacles that stymie the effort. 

Operational metrics and customer satisfaction help to drive alignment initiatives.  Metrics to the rescue, again.  It’s hard to align something that you do not clearly see or understand.  Correctly quantifying operations and customer satisfaction provides a way to measure alignment gaps and prioritize projects based on expected benefit and importance to successive alignment initiatives.

Adopt continuous improvement and six sigma as alignment tools.   Hopefully you have already been using continuous improvement and six sigma protocols to optimize your own processes.  Alignment initiatives present the opportunity to take this to the next step, expanding the boundaries around your processes to include outside functions in which there is an important relationship in either direction.

Revisit mission statements to assure relevance and alignment.  It may sound obvious (because it is) but many organizations have not aligned their mission statements to be complimentary of each other.  If these statements are indeed the pointer on your compass to success, then different parts of the organization are moving in different directions at different speeds and with different levels of concern.  Making sure that mission statements express common values and outcomes all the way down the line helps everyone keep their eyes on the same goals.

Make alignment important to everyone.  You think it is now?  Maybe.  Making alignment a reportable element that influences performance reviews and compensation will guarantee it gets the attention you want it to get.