Align Your Way To Customer Focus
Last month we talked about the nature of customer focused leadership and organizations. But how do you know if you have a customer focused organization? How do you build one? This month I want to share a consultant’s secret for understanding and building customer focused organizations.
When I was a younger consultant, a wise and experienced consultant passed on to me an extremely valuable “secret” that I will now pass on to you. He said:
“If you want to understand how an organization works, follow the money. If you want to understand how an organization is “broken”, find the places within it where responsibility and control are out of alignment.”
This was a lot for me to take in all at once. However, as the years of my career progressed, this proved to be an extremely valuable truth. I will attempt to explain the essence of this truth in this short article – and leave you with a valuable tool.
Follow the Money to See How the Organization Works
In an organization, money is energy. Things happen in organizations according to how money flows and fuels activities. To a large extent, the power of any organizational component (e.g., department, project, person) is determined by how money flows to it and from it. In general, the provider of money (the buyer) has some control over the receiving entity (the provider). So when we “follow the money”, we discover the organization’s collective funding sources, the activities they fuel, and their overall influence. In doing so, we “understand how it works.”
“How it Works” is Often Different Than “How it Should Work.”
This is what we mean by “broken” – where responsibility and control are out of alignment. All enterprise elements are either reinforced or undermined by the flow of money.
A Classic Example of Misalignment
Many of our clients are facing the need to improve their performance on cross-functional team-based projects. This usually implies the need to move toward a matrix organization. Many move in that direction without changing the flow of money. They want to hold projects and Project Managers accountable for “executing” on projects, but they do not change the flow of money to align with that accountability.
In this example, the functional departments continue to receive, directly from the budgeting process, funds associated with project execution. In other words, the project budget does not include the funds to pay for all of the people on the project. The departments pay the people. Consequently, people supporting a project don’t view the Project Manager as someone they “report” to or take direction from. This creates a difficult situation for Project Managers. They must “beg” for and borrow people to serve on their projects. Furthermore, these people are reluctant to take direction from the Project Managers.
This is a classic misalignment of control and responsibility. The department has the control – via the flow of money and the established reporting relationship – yet the Project Manager has the responsibility for successfully executing the project.
Under these circumstances the organization can either unfairly hold the Project Manager accountable for the project or it can recognize the control issue and let him off the hook. But then who is accountable for the project?
Conversely, in this example we are we giving departments money but not holding them accountable for producing anything of value to the organization. The departments are not bad; they are just following the rules of the organization, fueled by the flow of money! You can correct these misalignments by altering the reporting responsibilities and the flow of money.
The Punch Line
Multiply this problem by everywhere in the organization where there is misalignment of control and responsibility. You will then understand the organizational dysfunction that prevents it from being customer focused!
To correct this, simply apply this test of organizational alignment to every job, person, and function in the organization. Then take whatever steps are necessary to build alignment. No organization is perfect, but if you use alignment of control and responsibility as your compass, you can build a customer-focused organization that eliminates obstacles and supports the people in delivering customer-focused products and solutions. Now you know the “secret.”
At Advance Consulting we have helped many organizations with their goals of developing customer focus. We can help you develop and implement your customer focused organization. For more information on implementing customer focus, see our Customer Focus services. Or, contact us to discuss your specific needs.