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This first appeared as an ASPANET On-Line column in March 2002.
Levers
of Alignment
by John M. Kamensky
You can get your back aligned by a chiropractor. You can get your wheels aligned by a car mechanic. But your organization? How do you get your organization aligned to achieve its mission and goals?
In 2000, the departing Canadian Auditor General, Denis Desautels, assessed a decade of development of strategic planning and performance measurement in the Canadian federal government and found a “persistent state of planning for results – rather than actually managing for results,” he concluded that “it’s time for departments to move beyond planning.” The US federal government faces a similar challenge. The hard part of managing for results is getting everyone in the organization to actually focus their day-to-day activities around achieving their organization’s goals. And that’s ultimately what alignment is all about.
Aligning an organization to manage for results ultimately means changing its culture (“the way we do things around here”). But doing this means examining virtually every facet of the organization to ensure each element supports the achievement of the goals of the organization. For example, in the mid-1990s, Joe Dear, the Administrator of the Occupational Safety and Health Administration (OSHA), concluded that his organization was not achieving its mandated goal of ensuring health and safety in American workplaces by conducting on-site inspections. OSHA had resources to visit less than 2 percent of workplaces each year and had to hope the rest were obeying the law. He decided to devote some resources to an initiative where OSHA employees, instead of being inspectors, would be advisors, and thereby extend the reach of his agency to cover many more workplaces. These staff would partner with businesses and employees to find workplace hazards and fix them rather than fining them.
This was a great idea, but no changes in OSHA staff behavior happened. Then Administrator Dear discovered that the staff appraisal system rewarded staff for the number of citations and fines they levied, and offered nothing for developing partnerships. The appraisal system was not aligned with the goals of the organization. Once he changed the appraisal elements, he started seeing the intended performance results.
Until an organization can align its structure, systems, and employees to support its goals, it will consistently fail to meet them. Heroic leadership can sometimes overcome these barriers; but, then the organization goes back to behaving the way it always did after that leader leaves. No wonder that the former Administrator of the Federal Emergency Management Agency, James Lee Witt, said that fixing his organization was simple, compared to the next step -- keeping it that way.
They all do. The starting place is the strategic plan, which should set the overall framework of what is to be achieved and the metrics for success. For example, Charles Rossotti, Commissioner of the Internal Revenue Service (IRS), signaled a change in the focus of the IRS (from collecting as much money as possible to helping taxpayers achieve voluntary tax compliance) by changing its mission statement to declare that it would “Provide America’s taxpayers top quality service . . .” But that was just his first step. He then aligned the organizational structure and systems around that goal. “Alignment” in the case of IRS and other agencies, became a series of strategies for making change happen. Here are some examples of where and how:
Organizational structure. When Comptroller David Walker was appointed to lead the General Accounting Office (GAO) several years ago, he embarked on the creation of GAO’s first strategic plan. This plan had four goals. But the existing organizational structure of GAO was built around groups of agencies, such as all the agencies dealing with natural resources, not GAO’s newly-articulated goals. So Walker set out to reorganize the agency into units aligned with the goals. Similarly, IRS Commissioner Rossotti reorganized the IRS around its major customer groups, abandoning its traditional structure around the tax form processing system.
Human capital systems. GAO, again, is a good example. Once the strategic plan defined the kind of work GAO would do, Comptroller General Walker conducted an assessment of the skills in the GAO workforce and compared them against the competencies needed to successfully meet the agency’s mission and goals. The gaps led to a series of steps, including offering early retirements for selected individuals, retraining for others, and recruiting new talent with the desired competencies. As nearly a quarter of the federal workforce becomes eligible for retirement in the next few years, many agencies have opportunities to reshape their workforce around the competencies needed for future success – if they plan now.
Budget systems. The Environmental Protection Agency (EPA) has made a number of efforts to align its budget with its strategic goals. While the ideal approach is to restructure its congressional budget accounts to reflect its goals, that’s not always possible. EPA, instead, created a series of cross-walks so it can report externally against its traditional structure, but internally, it uses the revised approach to ensure staff view resource allocations against its mission goals. The State of Oregon did something similar with its Oregon Benchmark effort some years ago. It defined the goals it wanted to achieve and used them as the basis for discussing resource allocations, rather than the traditional program and agency approach. Likewise, the Department of Health and Human Services has begun to better align its budget and performance systems by conducting joint budget/planning meetings and concurrently reviewing both budget and planning documents in its review system.
Financial management systems. Linking the accounting for resources to goals is also an important strategy. If the goal is to make managers more accountable for resources they use, the most frequently used tool for doing this is using Activity-Based Costing to make the costs of activities transparent to both the managers and the customers. The Federal Aviation Administration’s Air Logistics Center, which provides the spare parts for the air traffic control system, put in place a supply and repair ordering system that created financial transparency. The new system resulted in the Center giving its $120 million budget away to its air traffic control customers and charged them for parts, instead of the traditional approach of giving the parts away free. When customers wanted a part or a repair, the controllers suddenly realized that something they had sent in for repairs in the past was far more expensive than buying a new part of better quality. Financial transparency makes a difference in behavior.
Technology systems. The introduction of technology has a major effect on other systems in an organization, and those systems have to work together. For example, the Trademark Office wanted to significantly improve the timeliness and quality of its approval process. It found that moving to electronic filing of trademarks did both, and ultimately cost less. This change had a major effect on an entire class of employees who used to sort the mail and put pending trademarks in the queue for the trademark attorneys to process. There was a reduced need for mail clerks and many were retrained to assist the attorneys in preparing the processing of the trademarks. This kind of change is being repeated across the government – the IRS is moving to electronic tax filing for many of the same reasons, as is the Veterans Benefits Administration for veterans filing claims. But this kind of shift requires different kinds of human capital competencies. Therefore, goals and strategies must be examined holistically, and not in the traditional organizational system stovepipes.
Capital planning systems. Much like technology investments, organizations have to align their other capital investments. For example, the Veterans Health Administration set a goal of increasing service to veterans by serving them in outpatient clinics rather than as inpatient hospitals. This has resulted in a massive reassessment of its hospital network, again, to align its capital investments around the goal of better serving the veterans, not the medical system.
Leadership Communication. This is where the phrase, “walk the talk,” comes to play. For example, the former Commissioner for the Bureau of Reclamation, Dan Beard, undertook a major organizational transformation effort to move the agency away from its traditional mission of dam building, to a mission centered on water resource management. It took a lot of effort and he encouraged constant communication. He frequently communicated to all employees via email, and committed to responding to all e-mail inquiries from employees (about 7,000) within 24 hours. Since he did it, so did his senior staff.
Employee performance management. The case of OSHA’s initial failure to align employees’ individual performance incentives not being aligned to new strategies and goals is not uncommon. This is probably the area when leaders can best leverage rapid change. Tools include incentive-based individual performance agreements, service-level agreements, performance-based contracts and performance-based grants. In addition, using transparency of performance can help drive behaviors to be better aligned with organizational goals. For example, both the Public Building Service and the Bureau of Land Management make key organizational and program performance data available to all their employees so they can hold themselves mutually accountable for improved performance.
How Do You Know If Your
Organization Is Properly Aligned?
There are models used to assess
alignment, but they tend to rarely be applied
because organizations attempt to fix the symptoms
rather than looking at the bigger picture. There
are three good ways to check to see if your
organization is aligned. Ask your customers. Ask
your stakeholders. And, not the least, ask your
employees.
Organizations that use a balanced scorecard tend to ask these groups about such thing on a regular basis and find it a valuable tool to communicate mission goals and priorities. The Office of Student Financial Assistance has been a leader in this in recent years and has made significant progress in it mission: “helping put America through school.”
The best time to assess your organization’s alignment is when a new leader arrives. So, if you’ve got a new boss, ask her if she wants an alignment. . . . it doesn’t hurt.
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