Taking too long? Close loading screen.
Connect with us

Business

‘The Alignment Factor’: The Keys to Internal Alignment

Published

on

October 22, 2020 7 min read

Opinions expressed by Entrepreneur contributors are their own.

This is the first in an exclusive series of articles from Total Alignment authors Riaz Khadem and Linda Khadem titled “The Alignment Factor.” Check back in every Thursday for new installments. 

Every entrepreneur knows that alignment with the market, or external alignment, is vital to the success of the . But what about internal alignment? Internal alignment is just as important and includes the alignment of people in an organization to work efficiently and collaboratively to fulfill the purpose of the company.

The alignment of people has two distinct characteristics: alignment with a center and alignment with movement. The first is primarily in the realm of thought; the second in the realm of action. In alignment with the center, the thinking of people is aligned with a single point of reference. In alignment with movement, people’s talents and energies are directed to activities related to the execution of to move the organization toward its vision.

Successful startups provide a good example of alignment with the center. Cohesion with a center is manifested in the leadership of the entrepreneur. The entrepreneur’s mission becomes the mission of all, and the alignment with a center is assured. The entrepreneur’s keen sense of the needs of the market translates into a vision of the future and a strategy for achieving it. Vision and strategy set the direction for the movement of the workforce.

Related: The 4 Levels of Organizational Alignment

If the company is successful, momentum generated from this two-fold alignment spurs it to significant levels of growth and success, which further reinforces the alignment with the center and with movement. A state of alignment exists in most successful startups, as the twin conditions of alignment are simultaneously present.

Challenges of Misalignment

As a company continues to grow and expand, misalignment inevitably creeps in. Things become increasingly complex, and many issues arise. For example, financing the growth may become difficult. Staying up to date with the needs of a changing market is a challenge, and the inability to receive timely and relevant key information to guide decisions becomes a roadblock.

As a business continues to scale up, the need for financial resources and new talent often dilutes the control and even influence of the original founder. Soon, the alignment is lost as new voices are heard and new people bring in their own vision and input. Often the new perspectives are what the company needs, but how does the internal alignment survive all these transitions? The entrepreneur is unable to sustain the two-fold dimensions of internal alignment.

As the organization grows larger, so does the challenge of misalignment, overt or covert. Misalignment slows the progress of the organization and disempowers the committed team, while promoting the personal agendas of individuals. Many entrepreneurial organizations fail during scale-up.

The Alignment Solution

To help the organization during this scale-up process, a new structure is required. It is wise to avoid the trap of adopting old structures and practices where misalignment can easily enter and prosper. A fundamentally new infrastructure is needed to deliver the firm’s promises and in a state of alignment. A series of transformational processes becomes necessary for building that infrastructure and using it to navigate through the scale-up phase of growth.

The transformational process must begin by engaging the entrepreneur and the top team in meaningful conversation with everyone’s participation. At this stage of expansion, a new mission and core values should be defined to serve as the new center of alignment. Agreement with that center is assured when everyone is involved and provides input into the creation of the mission and values. The same team should engage in formulating a shared vision of the future and strategies to realign with the market. The vision and strategy that emerge from such a process sets the direction of movement for all employees. 

It is important to guard the process of alignment from being misaligned itself. Alignment must not be forced. True alignment will come about naturally through active participation, involvement and understanding. Further, the actors in this alignment activity must know that alignment enhances, not diminishes, the of everyone. Creativity and are the necessary elements of growth. In an aligned state, when the direction of movement is clear and the responsibilities are spelled out, the individual’s creativity becomes more focused on fueling the speed of movement rather than flowing haphazardly.

The value of the process of building an infrastructure of alignment must be clearly understood and agreed upon in order to ensure the sincere participation of all the parties. Without understanding and wholehearted acceptance, the process will not truly result in alignment. Personal opinions abound and should be channeled in a constructive flow to contribute to the transformational process. For this reason, the facilitation of the process must be done with care, patience and respect for everyone’s point of view. A positive and attentive approach in facilitation eventually wins any natural resistance to this effort.

 The Role of Methodology

The existence of methodology is key to implementing internal alignment. It is far easier to unite different points of view in the presence of a sound methodology that everyone understands, rather than the exchange of differing opinions without a methodology. It is far easier to facilitate consensus in a group consultation, for example, in the presence of a set of ground rules for discussion that everyone accepts.

With the correct methodology being used, the following results should be forthcoming: an inspiring mission, vision and values; creative strategy; clear accountability; cross-functional collaboration; access to data; enhanced competencies; and ability to deliver value to customers.

What Does Alignment Look Like?

In a state of alignment, the organization has an inspiring mission guided by core values that are never violated. The mission is not just making money. Rather, it is about providing some service or product that add to human prosperity. Mission gives everyone meaning to their jobs, a reason to strive for excellence.

The organization has a vision of success and goals for delivering its worthy mission. Goals are challenging and require effort and creativity to reach. A strategy for achieving vision has been devised based on a sound strategic process and the involvement of the organization’s strategic thinkers.

Strategy to achieve vision has set the direction for all employees. It is a roadmap to success that is specific enough to allow each employee to find his or her clear path of contribution to its success, yet flexible enough to change with the changing external environment.

In a state of alignment, each individual contributes to the execution of strategy (vertical alignment), as well as collaborates with others (horizontal alignment). In a state of alignment, a rhythm of conversation in teams and between collaborators is present to consult on progress, devise plans of action, act and then reflect on action aimed at sustaining alignment and moving the organization forward toward its vision.

Related: Getting Employees to Tell the Whole Truth When You Need to Hear It

The state of alignment has immense power and will enable the entrepreneurial organization to stay united, survive the difficult scaling up phase and emerge with extraordinary success as a recognized player in its market. It has the power to bring positive change based on fulfilling its well-defined and worthy mission while adhering to meaningful core values.

Source

Continue Reading
Advertisement
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Business

The Trump campaign celebrated a growth record that Democrats downplayed.

Published

on

The White House celebrated economic growth numbers for the third quarter released on Thursday, even as Joseph R. Biden Jr.’s presidential campaign sought to throw cold water on the report — the last major data release leading up to the Nov. 3 election — and warned that the economic recovery was losing steam.

The economy grew at a record pace last quarter, but the upswing was a partial bounce-back after an enormous decline and left the economy smaller than it was before the pandemic. The White House took no notice of those glum caveats.

“This record economic growth is absolute validation of President Trump’s policies, which create jobs and opportunities for Americans in every corner of the country,” Mr. Trump’s re-election campaign said in a statement, highlighting a rebound of 33.1 percent at an annualized rate. Mr. Trump heralded the data on Twitter, posting that he was “so glad” that the number had come out before Election Day.

The annualized rate that the White House emphasized extrapolates growth numbers as if the current pace held up for a year, and risks overstating big swings. Because the economy’s growth has been so volatile amid the pandemic, economists have urged focusing on quarterly numbers.

Those showed a 7.4 percent gain in the third quarter. That rebound, by far the biggest since reliable statistics began after World War II, still leaves the economy short of its pre-pandemic levels. The pace of recovery has also slowed, and now coronavirus cases are rising again across much of the United States, raising the prospect of further pullback.

“The recovery is stalling out, thanks to Trump’s refusal to have a serious plan to deal with Covid or to pass a new economic relief plan for workers, small businesses and communities,” Mr. Biden’s campaign said in a release ahead of Thursday’s report. The rebound was widely expected, and the campaign characterized it as “a partial return from a catastrophic hit.”

Economists have warned that the recovery could face serious roadblocks ahead. Temporary measures meant to shore up households and businesses — including unemployment insurance supplements and forgivable loans — have run dry. Swaths of the service sector remain shut down as the virus continues to spread, and job losses that were temporary are increasingly turning permanent.

“With coronavirus infections hitting a record high in recent days and any additional fiscal stimulus unlikely to arrive until, at the earliest, the start of next year, further progress will be much slower,” Paul Ashworth, chief United States economist at Capital Economics, wrote in a note following the report.

Source

Continue Reading

Business

Black and Hispanic workers, especially women, lag in the U.S. economic recovery.

Published

on

The surge in economic output in the third quarter set a record, but the recovery isn’t reaching everyone.

Economists have long warned that aggregate statistics like gross domestic product can obscure important differences beneath the surface. In the aftermath of the last recession, for example, G.D.P. returned to its previous level in early 2011, even as poverty rates remained high and the unemployment rate for Black Americans was above 15 percent.

Aggregate statistics could be even more misleading during the current crisis. The job losses in the initial months of the pandemic disproportionately struck low-wage service workers, many of them Black and Hispanic women. Service-sector jobs have been slow to return, while school closings are keeping many parents, especially mothers, from returning to work. Nearly half a million Hispanic women have left the labor force over the last three months.

“If we’re thinking that the economy is recovering completely and uniformly, that is simply not the case,” said Michelle Holder, an economist at John Jay College in New York. “This rebound is unevenly distributed along racial and gender lines.”

The G.D.P. report released Thursday doesn’t break down the data by race, sex or income. But other sources make the disparities clear. A pair of studies by researchers at the Urban Institute released this week found that Black and Hispanic adults were more likely to have lost jobs or income since March, and were twice as likely as white adults to experience food insecurity in September.

The financial impact of the pandemic hit many of the families that were least able to afford it, even as white-collar workers were largely spared, said Michael Karpman, an Urban Institute researcher and one of the studies’ authors.

“A lot of people who were already in a precarious position before the pandemic are now in worse shape, whereas people who were better off have generally been faring better financially,” he said.

Federal relief programs, such as expanded unemployment benefits, helped offset the damage for many families in the first months of the pandemic. But those programs have mostly ended, and talks to revive them have stalled in Washington. With virus cases surging in much of the country, Mr. Karpman warned, the economic toll could increase.

“There could be a lot more hardship coming up this winter if there’s not more relief from Congress, with the impact falling disproportionately on Black and Hispanic workers and their families,” he said.

Source

Continue Reading

Business

Ant Challenged Beijing and Prospered. Now It Toes the Line.

Published

on

As Jack Ma of Alibaba helped turn China into the world’s biggest e-commerce market over the past two decades, he was also vowing to pull off a more audacious transformation.

“If the banks don’t change, we’ll change the banks,” he said in 2008, decrying how hard it was for small businesses in China to borrow from government-run lenders.

“The financial industry needs disrupters,” he told People’s Daily, the official Communist Party newspaper, a few years later. His goal, he said, was to make banks and other state-owned enterprises “feel unwell.”

The scope of Mr. Ma’s success is becoming clearer. The vehicle for his financial-technology ambitions, an Alibaba spinoff called Ant Group, is preparing for the largest initial public offering on record. Ant is set to raise $34 billion by selling its shares to the public in Hong Kong and Shanghai, according to stock exchange documents released on Monday. After the listing, Ant would be worth around $310 billion, much more than many global banks.

The company is going public not as a scrappy upstart, but as a leviathan deeply dependent on the good will of the government Mr. Ma once relished prodding.

More than 730 million people use Ant’s Alipay app every month to pay for lunch, invest their savings and shop on credit. Yet Alipay’s size and importance have made it an inevitable target for China’s regulators, which have already brought its business to heel in certain areas.

These days, Ant talks mostly about creating partnerships with big banks, not disrupting or supplanting them. Several government-owned funds and institutions are Ant shareholders and stand to profit handsomely from the public offering.

The question now is how much higher Ant can fly without provoking the Chinese authorities into clipping its wings further.

Excitable investors see Ant as a buzzy internet innovator. The risk is that it becomes more like a heavily regulated “financial digital utility,” said Fraser Howie, the co-author of “Red Capitalism: The Fragile Financial Foundation of China’s Extraordinary Rise.”

“Utility stocks, as far as I remember, were not the ones to be seen as the most exciting,” Mr. Howie said.

Ant declined to comment, citing the quiet period demanded by regulators before its share sale.

The company has played give-and-take with Beijing for years. As smartphone payments became ubiquitous in China, Ant found itself managing huge piles of money in Alipay users’ virtual wallets. The central bank made it park those funds in special accounts where they would earn minimal interest.

After people piled into an easy-to-use investment fund inside Alipay, the government forced the fund to shed risk and lower returns. Regulators curbed a plan to use Alipay data as the basis for a credit-scoring system akin to Americans’ FICO scores.

China’s Supreme Court this summer capped interest rates for consumer loans, though it was unclear how the ceiling would apply to Ant. The central bank is preparing a new virtual currency that could compete against Alipay and another digital wallet, the messaging app WeChat, as an everyday payment tool.

Ant has learned ways of keeping the authorities on its side. Mr. Ma once boasted at the World Economic Forum in Davos, Switzerland, about never taking money from the Chinese government. Today, funds associated with China’s social security system, its sovereign wealth fund, a state-owned life insurance company and the national postal carrier hold stakes in Ant. The I.P.O. is likely to increase the value of their holdings considerably.

“That’s how the state gets its payoff,” Mr. Howie said. With Ant, he said, “the line between state-owned enterprise and private enterprise is highly, highly blurred.”

China, in less than two generations, went from having a state-planned financial system to being at the global vanguard of internet finance, with trillions of dollars in transactions being made on mobile devices each year. Alipay had a lot to do with it.

Alibaba created the service in the early 2000s to hold payments for online purchases in escrow. Its broader usefulness quickly became clear in a country that mostly missed out on the credit card era. Features were added and users piled in. It became impossible for regulators and banks not to see the app as a threat.

ImageAnt Group’s headquarters in Hangzhou, China.
Credit…Alex Plavevski/EPA, via Shutterstock

A big test came when Ant began making an offer to Alipay users: Park your money in a section of the app called Yu’ebao, which means “leftover treasure,” and we will pay you more than the low rates fixed by the government at banks.

People could invest as much or as little as they wanted, making them feel like they were putting their pocket change to use. Yu’ebao was a hit, becoming one of the world’s largest money market funds.

The banks were terrified. One commentator for a state broadcaster called the fund a “vampire” and a “parasite.”

Still, “all the main regulators remained unanimous in saying that this was a positive thing for the Chinese financial system,” said Martin Chorzempa, a research fellow at the Peterson Institute for International Economics in Washington.

“If you can’t actually reform the banks,” Mr. Chorzempa said, “you can inject more competition.”

But then came worries about shadowy, unregulated corners of finance and the dangers they posed to the wider economy. Today, Chinese regulators are tightening supervision of financial holding companies, Ant included. Beijing has kept close watch on the financial instruments that small lenders create out of their consumer loans and sell to investors. Such securities help Ant fund some of its lending. But they also amplify the blowup if too many of those loans aren’t repaid.

“Those kinds of derivative products are something the government is really concerned about,” said Tian X. Hou, founder of the research firm TH Data Capital. Given Ant’s size, she said, “the government should be concerned.”

The broader worry for China is about growing levels of household debt. Beijing wants to cultivate a consumer economy, but excessive borrowing could eventually weigh on people’s spending power. The names of two of Alipay’s popular credit functions, Huabei and Jiebei, are jaunty invitations to spend and borrow.

Huang Ling, 22, started using Huabei when she was in high school. At the time, she didn’t qualify for a credit card. With Huabei’s help, she bought a drone, a scooter, a laptop and more.

The credit line made her feel rich. It also made her realize that if she actually wanted to be rich, she had to get busy.

“Living beyond my means forced me to work harder,” Ms. Huang said.

First, she opened a clothing shop in her hometown, Nanchang, in southeastern China. Then she started an advertising company in the inland metropolis of Chongqing. When the business needed cash, she borrowed from Jiebei.

Online shopping became a way to soothe daily anxieties, and Ms. Huang sometimes racked up thousands of dollars in Huabei bills, which only made her even more anxious. When the pandemic slammed her business, she started falling behind on her payments. That cast her into a deep depression.

Finally, early this month, with her parents’ help, she paid off her debts and closed her Huabei and Jiebei accounts. She felt “elated,” she said.

China’s recent troubles with freewheeling online loan platforms have put the government under pressure to protect ordinary borrowers.

Ant is helped by the fact that its business lines up with many of the Chinese leadership’s priorities: encouraging entrepreneurship and financial inclusion, and expanding the middle class. This year, the company helped the eastern city of Hangzhou, where it is based, set up an early version of the government’s app-based system for dictating coronavirus quarantines.

Such coziness is bound to raise hackles overseas. In Washington, Chinese tech companies that are seen as close to the government are radioactive.

In January 2017, Eric Jing, then Ant’s chief executive, said the company aimed to be serving two billion users worldwide within a decade. Shortly after, Ant announced that it was acquiring the money transfer company MoneyGram to increase its U.S. footprint. By the following January, the deal was dead, thwarted by data security concerns.

More recently, top officials in the Trump administration have discussed whether to place Ant Group on the so-called entity list, which prohibits foreign companies from purchasing American products. Officials from the State Department have suggested that an interagency committee, which also includes officials from the departments of defense, commerce and energy, review Ant for the potential entity listing, according to three people familiar with the matter.

Ant does not talk much anymore about expanding in the United States.

Ana Swanson contributed reporting.

Source

Continue Reading

Trending