Dennis D. McDonald ( consults from Alexandria Virginia. His services include writing & research, proposal development, and project management.

How To Relate Kaplan and Norton's "Alignment" Process to Enterprise Web 2.0

By Dennis D. McDonald

There’s an interesting book excerpt available on the Harvard Business School’s “Working Knowledge” web site titled Managing Alignment as a Process,  by Robert S. Kaplan and colleague David P. Norton. The excerpt’s intro states:

“Most organizations attempt to create synergy, but in a fragmented, uncoordinated way,” say HBS professor Robert S. Kaplan and colleague David P. Norton. Their new book excerpted here, Alignment, tells how to see alignment as a management process.

What the excerpt says about “alignment” is interesting to put into the context of enterprise adoption of Web 2.0 technologies and processes.

My interest in the topic of “alignment” is based on having consulted at companies where the alignment of corporate information technology (IT) resources with corporate business strategy was at issue. Usually the projects were designed to answer questions such as:

  1. Are our IT resources aligned with our business strategy?
  2. What should we change about IT-related people, processes, and technologies to improve their alignment with the business?
  3. How much will it cost us to improve this alignment?

If you look at the examples given by Kaplan and Norton, especially the “scorecard” where they link strategic business objectives to various measurements of actions undertaken to accomplish those objectives, you see the logic of alignment. Their list of the points where alignment should take place is an excellent example of how complex it can be to make sure that everyone in an organization is “on the same page.” The authors logically argue that a managed process must be in place to ensure these points are aligned and. As a believer in “managed process improvement” myself, I can’t argue.

Kaplan and Norton are explicit about their traditional hierarchical focus:

The alignment process, of necessity, should be cyclic and have a top-down bias. The targeted corporate synergies should be defined at the top and realized in the business units. Just as the CFO coordinates the budgeting process, a senior executive should coordinate the alignment process—a responsibility for the Office of Strategy Management (OSM).

Note the “top down” reference. Does this fly in the face of what is happening as new business models, new technology, and more open and fluid communication channels seem to be ‘flattening” traditional organizational and communictaion structures?

Not necessarily. It seems clear that the authors are aware of what it takes to create “synergy,” a word they repeatedly emphasize. Here’s one excerpt:

Having aligned and integrated strategies at all organizational units yields little if employees are not aware of the strategy and are not motivated to help their organizational unit implement it. Enterprises must have active policies to communicate, educate, motivate, and align employees with the strategy. They must also align their ongoing management processes—for resource allocation, target setting, initiative management, reporting, and reviews—with the strategy.

Here’s another from their brief case study:

Finally, learning and growth synergies would be achieved by rotating experienced professionals to key jobs in the new companies (key staff rotation), by sharing computer systems (common systems versus plan) and knowledge (best-practice sharing), and, finally, by creating full organization alignment (alignment index).

In other words, several of the key actions taken in support of alignment involve the creation and sharing of knowledge.

It is the creation and sharing of knowledge that various technologies such as blogs, podcasts, wikis, and applications of social networking software can support. I could see, for example, an entire chapter in Kaplan and Norton’s book devoted to Web 2.0 technologies and how their use can support the alignment and synergies that are the book’s main focus.

One element that seems to be missing here is the manner in which, from an alignment perspective, the border between the company and its customers and vendors is managed. Perhaps that is addressed in other chapters. Note that, at least in terms of communicating with customers, support for Web 2.0 concepts and technologies is not universal, as I have addressed elsewhere.

One can argue that Web 2.0 technologies provide a mechanism where a company can be more closely integrated with the needs and desires of its customers. This closer integration can lead to better responsiveness for becoming aware of changes in customer requirements, better response in the face of market crises, and overall, a faster – and less expensive – approach to maintaining and growing profitability.

This concept of “alignment” as addressed in this management-focused book by Kaplan and Norton can logically be extended to incorporate evolving corporate practices involving diverse activities such as corporate blogging, the use of social networking technology to grow and manage on-demand expertise networks, and even the enhancement of government agency responsiveness to citizen needs. I’ll address some of these concepts in future posts.

Copyright (c) 2006 by Dennis D. McDonald.

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