Process Alignment for Strategic Implementation Bonnie McIlrath and Tim Kotnour, Ph.D. Industrial Engineering and Management Systems, University of Central Florida Orlando, FL 32816 Abstract The contribution of this paper is a methodology for aligning processes to the strategic plan. An organization must be able to align itself with the strategic plan to ensure effective implementation. A key factor for successful strategic implementation is aligning processes to the strategic plan. Once processes are aligned to the strategic plan, objectives, goals, and measures can be utilized to asses strategic progress. Lessons learned and best practices of process alignment were developed from case study applications conducted at Kennedy Space Center. Managers may utilize this methodology for implementing strategic plans within their organizations.

Keywords Process Alignment, Process Improvement, Strategic Alignment, Strategic Implementation

1. Introduction In today’s dynamic markets, many organizations utilize strategic management to help maximize their competitive advantage. However, John C. Koopman [1] states, “The real threat to most companies is not a strategic threat from outside. Instead it is their own failure to align their organization with their strategy and thus ensure good execution (p. 15).” The stumbling block in strategic management continues to be implementation, which leads to organizational alignment. Peter G. W. Keen [2] identifies what he terms the “Process Paradox,” which is the decline of an organization at the same time that reengineering and TQM are dramatically improving efficiency, quality, and customer service. These failures can be linked back directly to poor alignment between strategic plans and business processes. An organization must be able to align itself with the strategic plan and turn strategy into action. Once processes are aligned to the strategic plan, the objectives, goals, and measures of the organization (WWA) can be utilized to meet the organization’s strategic goals (WWWTB). Figure 1 depicts how process alignment leads to strategic implementation.

Process Alignment Leads To Strategic Implementation.

WWA

WWWTB

•G o a l s •Objectives •Measures

•G o a l s •Objectives •Measures

Processes Meeting Current Needs Processes not aligned with strategy

Alignment Methodology

Processes Meeting Future Needs Processes aligned with strategy

Figure 1. Process Alignment Leads To Strategic Implementation.

Organizations that have successfully obtained strategic goals are aligned to the strategic plan. Alignment encompasses many facets of the organization, including strategy, structure, processes, people, and technology [3]. The focus today is how to align the organization and in turn implement the strategic plan. Alignment is a critical success factor of strategic implementation. However, little is known about alignment. This research will answer the question, “How can an organization align processes with the strategic plan?” This research has three objectives: 1) develop a methodology for process alignment, 2) demonstrate the methodology, and 3) develop Lessons Learned from the demonstration. The methodology for process alignment was developed from best practices identified from existing tools in the literature. The methodology was demonstrated in a case study conducted at the Kennedy Space Center. Upon completion of the case study, Lessons Learned from the demonstration were developed from the approach and deployment efforts learned during this research.

2. Organizational Alignment Organizational alignment is defined as being focused on completing the right work the right way with the right people at the right time [4]. Addressing the problem of the right work is a process of flowing requirements down from the mission/vision set forth by senior management. The requirements are based on the current, transformation, and future states of the organization. The right work is a function of activities to 1) meet current mission and customers' requirements, 2) transform the organization, and 3) deliver on future oriented work associated with the vision. The right way includes the processes, resources, and tools by which the work is completed and managed. The right people is derived from understanding how people are organized to complete the work and the tools they use. The right people encompasses issues such as skill needs from a process and structure perspective, and number aligned with budget. The right time is the proper timing of doing the work to meet short-term work requirements, short-term actions to ensure long-term success, and long-term work requirements. The aim of organizational alignment is to ensure the right work is completed the right way with the right people at the right time. Organizational alignment consists at three levels: external, internal, and culture. 2.1 External Alignment External alignment focuses on developing the products and services to meet the needs of the customer. External alignment matches the organization’s products and services with the market and customer needs. This alignment includes the high-level definition of the organization’s roles and core processes. Based on this high-level definition, the organization can align the internal components of the organization. External alignment is accomplished through the strategic management process. 2.2 Internal Alignment Based on external alignment, the organization can align the internal components of the organization. Internal alignment consists of 1) internal strategic alignment (goals, objectives, and measures) and 2) internal work alignment (the processes, resources, and workforce to deliver the products and services). Through internal alignment, an organization is providing individuals the skills and tools necessary to execute their work process. Using Kurstedt’s [5] management system model we can define internal alignment to focus on the process by which work is completed, the tools people use to complete the work, and the people completing the work. The alignment comes through the interfaces of the components: the structure by which people are organized to do the work (i.e., processes and people), the information available to the worker (i.e., people and tools), and the metrics used (i.e., processes and tools). When changing the organization, the organization must align these components and interfaces. For example, an organization cannot do the same work (i.e., products and services) in the same way (i.e., process, tools, and structure) by reducing the people. The changes in components must be balanced and aligned with each other. The analysis and implementation starts from the products and moves to the people. An across the board reduction and then adjustment in process may not produce the customer’s desired results. 2.3 Cultural Alignment Cultural alignment is a continuous process to ensure the organization's values or guiding principles are reflected in everyday decisions and actions. Effective cultural alignment occurs when organizational members behave in a manner consistent with the organization's value or guiding principles. Labovitz and Rosansky [6] have found that alignment creates an organizational culture of shared purpose. This research will focus on a methodology for the internal alignment of work.

3. Alignment Methodology With so much of today’s literature focusing on strategic planning, there is little in the literature that discusses strategic alignment, strategic implementation, or process alignment. George Labovitz and Victor Rosansky [6] find that growth and profit are the result of alignment between people, customers, strategy, and processes. Yet, there is still little information in the body of knowledge regarding strategic implementation or process alignment. Tools for process alignment that have been found in the literature focus on differing aspects of the organization and process criteria. Although each author identifies a different methodology for process alignment, these methodologies have strengths that can be combined to develop an alignment methodology. An alignment methodology should 1) help management understand the organizational system, 2) identify process interactions across the organization, 3) identify trends in the organization, 4)provide focus and prioritize work, 5) obtain management buy-in, and 6) identify which processes are important for organizational success. Table 1 describes the requirements necessary for a process alignment methodology based upon the literature. We integrated formal processes and tools to develop an alignment methodology. Table 1. Description of process alignment requirements. Description • Use maps to increase organizational understanding of interdependencies and Understand organizational break down functional barriers system • Increase organizational buy-in with inputs from various levels in the organization Identify process interactions • Identify negative feedback systems and inconsistencies • Identify how processes interact within the organization • Determine process performance over time Identify trends in organization • Assess future needs of customer and process • Prioritize organizational goals Provide focus and • Ensure processes meet strategic objectives prioritization • Follow systematic approach • Optimize buy-in with a top-down and bottom-up approach Obtain buy-in • Identify individual responsible for success of alignment to be champion Identify processes important • Focus on effectiveness and efficiency to organizational success • Identify processes that do not contribute to strategic plans Requirement

Systems mapping has been found to be an effective tool for understanding organizational interaction [7]. Van Aken and Hacker [7] use systems mapping to 1) increase understanding of how organizational systems work and contribute to the overall organization, 2) help breakdown functional barriers, and 3) understand how systems impact each other. Many process improvements fail because they are not sustained over the long-term, involve only a fraction of the workforce, and are not guided by a systematic framework [7]. Although systems maps may not provide a methodology for process alignment, they will be helpful for understanding process impacts on the entire system and provide insight for allocating resources to improvement objectives. Peter Keen [2] focused his efforts for process alignment in identifying the salience and worth of a process. He defined salience as the prominence of a process, and identified processes as identity, priority, background, or mandated. Process worth is determined by calculating returns of the process against costs of the process. Utilizing this method of alignment will ensure that only the most valuable processes are targeted for change, therefore not wasting precious resources on unimportant processes. Although this is a valuable tool for improving process value, this methodology does not incorporate the organization’s strategy, customer focus, interacting processes, or stakeholder input. The Matrix of Change is another tool developed to align processes [8]. This tool is similar to Quality Function Deployment and evaluates interactions between processes within the organization’s structure. This method also increases stakeholder buy-in by including stakeholder opinions. Important facets missing from this method are the inclusion of the organization’s strategy and objectives, process worth, and salience.

Another methodology for process alignment is the Motion method [9]. The Motion method emphasizes understanding a process’ trends over time in the following areas: effectiveness, efficiency, strategic importance, and customer proximity. It also suggests optimizing stakeholder buy-in through the use of an organizational top-down and bottom-up approach. Although this method seems to include all factors essential to process alignment, it excludes process interactions and process worth. Each of the discussed process alignment methods provides insight into factors of process alignment. Utilization of these factors is included in the process alignment methodology to ensure successful alignment. Systems maps increase organizational understanding of process contributions, interactions, and impacts. Product/Service matrices provided information regarding inputs, outputs, outcomes, and customer information. The worth and visibility (salience) of a process identify process which were most important to the organization and to the customer while avoiding the “process paradox.” Processes are evaluated against future outlook to determine if need would increase or decrease over time. Strategic relevance is determined by drawing a direct link from each process to the strategic objective and measure it directly contributes to. Once the manager has all information regarding a process, a decision may be made to start, stop, or continue the process. The resulting decision would yield processes that were aligned to the strategic plan. Figure 2 provides a graphical representation of the proposed process alignment methodology and the purpose for each step.

Process Alignment Methodology. Process Alignment Step

Purpose

Develop System Map of Organization.

Develop shared understanding of organizational system and process interactions.

Create product/service matrix.

Shared understanding of process contribution to stakeholders and process interactions.

Evaluate Worth And Salience of Each Process.

Avoid process paradox and identify process improvement opportunities.

Evaluate Current Processes Against Future Outlook.

Evaluate process trends over time and expected future demand.

Determine Strategic Relevance.

Identify purpose of implementing process (link process to strategic objective).

Make Start, Stop, Continue Decision Based Upon Criteria and Strategic Relevance.

Develop action plan to evolve processes to meet strategic outlook.

Figure 2. Proposed process alignment methodology. Information from the methodology is entered into a table of evaluation criteria containing each of the elements of the methodology. Process owners are informed about the purpose for process alignment and the details of the methodology. They then complete the table and provide recommendations to managers for process changes. From this table managers have all information necessary to decide whether to start new processes, stop outdated or redundant processes, and identify processes to improve. Table 2 is an example of the evaluation criteria. Table 2. Example of evaluation criteria. System Division Process Function Function

Title

From System From Org. Charts Maps

Customer Product

Who

Outcome

Process Worth

Process Visibility

Future

Interacting Processes

Relevance to Strategic Direction

Identity, Product Expected Titles of Objective Priority, Earnings Other And Strategy Output Evaluation Vs. Cost Background, Customer or Purpose Outlook Processes Relationships Mandate

4. Results and Analysis A case study was conducted at the Kennedy Space Center. Two functional division chiefs were selected to be the project sponsors and utilized to obtain stakeholder buy-in. Once top-level management buy-in was secured, managers deemed system experts within the organization were selected to participate in the process alignment study. Prior to meeting with the selected managers, a preliminary systems map was drawn and processes placed in the appropriate area. Meetings were then conducted with the selected managers on an individual basis for one hour each. In the meeting, managers amended and solidified the systems maps, identified process characteristics, evaluated future outlook and trends, and verified strategic relevance. Upon completion of meetings within the division, gaps were identified for processes to start, many processes were continued or improved, and process were found not to be relevant to the strategic plan. Once system map analysis was complete, the evaluation criteria were completed for each process of that division. The process characteristics were a critical factor for helping participants gain a better understanding of each process and its drivers. This section provided insight for processes to improve and processes to stop. Processes that were duplicated, meet no strategic objective, or lacked a value added outputs were classified as a stop decision. Processes that interacted with other divisions, supported an objective as a liability, or were expected to have an increased or decreased future demand were characterized as an improve decision. Although this step only identified three processes to stop, it allowed managers to understand essential factors of a process and make long-term improvements or innovations. The systems maps identified gaps in each system and pointed out process interactions. Through the use of the system map, it was found that 25% of the division was not utilizing any processes that met the strategic plan. This area was classified as a start decsion. It was also found that interactions took place within the organization and between other divisions that had not been seen before. These areas were identified for improvement and innovation. Upon completion of the study, managers utilized the processes marked for start, stop, or improve/innovate and began a reengineering effort that was guided towards strategic alignment and implementation. This study was also a critical part of the division’s ability to meeting a new ISO-9000/2000 standard. By obtaining top management buy in, delivering quantifiable results, and providing a means to meeting the new ISO standard, the organization has a renewed shared understanding of the need for process alignment and the resulting changes.

5. Lessons Learned Throughout conducting process alignment, a set of lessons learned was compiled. These lessons learned include: 1. Top-level management buy-in critical to process alignment success. • As with any project, management buy-in creates a sense of importance for the project and encourages employees to participate to a fuller extent and play a more active role. 2. Process experts must be selected from the entire organization. • Choosing a single expert to cover more than one area leads to decreased creativity in mapping and maps that may have an isolated view of the organization’s processes. • The experts must be current in each of their areas, and not try represent all areas. When a single individual spoke for several areas, information was vague, incorrect, and biased. This led to poor information in the evaluation criteria and a lack of decision-making. 3. Strategic direction for the organization must be clear and completely understood by all employees. • Organizational goals must be aligned to objectives and measures to ensure processes are aligned with the organization. All organizational elements must be linked and lower level employees must have buy-in with those elements to ensure success. 4. Systems maps point out interactions throughout the organization that would be better addressed crossfunctionally. • Managers found systems maps to be the most informative and useful portion of the methodology. Employees took an active role in depicting daily work and managers better understood crossfunctional interactions that were not noticed previously. 5. Must find a way to quantify costs in the public sector to better understand process efficiency and worth.

• Managers found it difficult to quantify costs and were generally unable to determine costs associated with a process. Although FTE’s and capital could be calculated, a better way of accounting for costs could improve results.

6. Conclusions Much of the strategic planning literature focuses on methodologies for developing an effective strategic plan. However, John C. Koopman [1] states, “The real threat to most companies is not a strategic threat from outside. Instead it is their own failure to align their organization with their strategy and thus ensure good execution (p. 13).” The stumbling block in strategic management continues to be implementation, which leads to organizational alignment. Yet, there is still little information in the body of knowledge regarding strategic implementation or process alignment. While some methodologies focus on process value, others focus on organizational understanding, process interactions, or stakeholder buy-in. The key is to identify best practices and develop a single methodology that utilizes those best practices. The methodology for process alignment developed here utilizes facets from each of the process alignment methodologies discussed in the literature review. This methodology was applied in a case study conducted at Kennedy Space Center. Future research will focus on expanding the application of process alignment across other industries and lead the way to developing a method for allocating resources while aligning workforce capabilities.

Acknowledgments We thank the participants of the research for sharing their insights and concerns. We thank NASA/KSC for funding this research and for providing a real-world laboratory for developing further knowledge on the engineering of organizational change and learning.

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