Speaker 1: Internal alignment is one of the most important prerequisites to ensuring a successful digital transformation. But what exactly is internal alignment and how do we achieve it? That's what I want to talk about here today. My name is Eric Kimberling. I'm the CEO of 3rd Stage Consulting. We're an independent consulting firm that helps clients throughout the world reach the third stage of digital transformation success. And internal alignment is one of those terms that doesn't have a lot of meaning without some context. It's a fluffy buzzword that a lot of people throw around, but it's really hard to understand if you don't really unpack it and dive into it. So what I want to do today is talk about what exactly internal alignment is, what some of the different components are, and how you can put together a strategy and plan to ensure that you have internal alignment on your digital transformation initiative. Strategic alignment is one of the first layers of internal alignment that we have to think about. And this is exactly what it sounds like. It's the overall strategy of the organization. So this is going to be things like your KPIs, your goals, your objectives, etc., etc. And this is just basic business strategy type stuff. And to be honest, most organizations we work with are pretty well aligned here. They understand what the overall strategy is. They have a clear vision of where they're headed as an organization. And this is really the least of their worries in many cases. Not true for all of them, but for most of them, I'd say this is probably the easiest one. But the key is, what do we do with this? Once we know what this business strategy is and where we're headed as an organization, what our growth goals are, what it is we're trying to become when we grow up, the question becomes, how do we ensure that the rest of the organization is aligned with that? And that's really the key fundamental breakdown, is that generally organizations have this part figured out, but then they don't figure out the rest of the organization and the rest of the transformation to ensure that they're aligned. And that's what I'm going to talk about throughout the rest of this video. Before we dive too far into today's content, I want to share a little bit of information about Third Stage Consulting and who we are. Third Stage Consulting Group is an independent technology agnostic provider of consulting services to help clients through their digital transformations. We help with digital strategy and software selection, as well as implementation planning. And during implementation, we provide services related to program management, organizational change, business process improvement, as well as enterprise architecture. These are just some of the services we provide. We have offices in North America, as well as Europe and Asia Pacific. So if you'd like to learn more, I encourage you to check out our Resource Center, which includes a number of resources that will help you through your digital transformation. And you can access that for free using the QR code here or the links below. You can also reach out to me directly if you'd like to discuss your digital transformation and brainstorm ideas on how to improve where you're headed on your journey. Now let's jump back into today's content. So now that we know what our overall business strategy is, assuming we do know what that is, the next point of alignment is your executive team. Now on the surface, it may sound like I'm talking about the same thing here, but I'm talking about two different things. You may have an overall strategy that's very clearly defined, but your executive team may not be on the same page with how you're going to get there. Now if you think about an executive team of, say, 5 or 7 or 10 people, you're probably going to have 5 or 7 or 10 different opinions on how the organization is going to achieve these goals and objectives. Just to give you a couple quick examples, some organizations don't always agree and some executive teams don't always agree on level of standardization. In other words, how much are you going to act like one company? How much are you going to roll out common business processes across the entire organization? Versus how much are you going to keep decentralized and let different business units and different departments operate autonomously? So those are two different strategies that may both help get to the same goals and objectives up here, but if you're not on the same page as an executive team, that's going to create problems and headwinds during your digital transformation. I'm going to come back to that point here in just a moment. But in general, what we need to do is understand how well aligned our executive team is, and chances are pretty high that you're not aligned, and that's okay. Most organizations we go into, like I said, even if they have this high-level strategy figured out, most organizations are not super aligned as an executive team. But the thing you want to do is you don't want to just go in and start a digital transformation without first figuring out how do we get aligned as a team. And I'm not saying take a vote until you have unanimous agreement on every single dimension of how you're going to achieve your business strategy, but you at least want to know that you're rowing in the same direction, you have the same common goals and objectives, and in some cases it may be your CEO or someone at the very top of the organization that's crafting that vision and laying out the vision or the path for how these goals and objectives are going to be achieved via some of the executive initiatives that you work on strategically and day-to-day. So one of the first things that organizations need to do is make sure that they have alignment at the executive team level, which is a prerequisite to the other dimensions of alignment that I'm going to talk about here today. Now the next layer of internal alignment we have to think about is the project team. Now when I talk about the project team, I'm talking about the digital transformation or the ERP project team. These are the people that are going to be the boots on the ground day-to-day, managing the overall project, making major decisions, and managing the details of the project throughout the transformation. Now if your executive team is not aligned, chances are extremely high, if not close to 100%, that your project team is not going to be aligned either, because if this team isn't aligned, it's going to cascade down the organization, and that lack of clarity that starts at the top is going to permeate throughout the entire organization, including the project team. So we have to make sure our executive team is aligned. Once they're aligned, now we need to make sure our project team is aligned with the stuff that happens here and here. And some of the things we have to think about is if we continue with this thread or this decision point around how much we're going to standardize our operations, a lot of times executives will become aligned on this point and say, yes, we're all on the same page, we're all rolling in the same direction that we are going to standardize our operations. We're going to roll out a common business process and platform that allows us to act like one company to provide consistent customer experience to our customers. Great. It's a good starting point. What oftentimes happens down here at the project team level is the project team values flexibility, or in some cases they also value decentralization, because what happens is the path of least resistance for most organizations is to not standardize the business. And the people that are here on the front lines oftentimes will get so much pressure from outside the project team, from the front lines of the organization, that they end up reverting back to what's easiest, which is let's just give people what they want. Let's retain flexibility in our organization. Let's decentralize. Let's allow the organization to act autonomously because, again, it's the path of least resistance. However, that doesn't align right here. We've got a disconnect right here between what the executive team wants and what the project team is delivering. So we've got to make sure that the project team is fully aligned with the executive team. And I'll talk at the end of this video about how to get that level of alignment. Now the next layer, and perhaps the most important layer of this entire concept of internal alignment, is your employee front lines. And these are the front line people, the users of the system, the people that are actually doing the work day-to-day. Obviously, your project team is comprised largely of employees, but this is all your entire employee base. These are all the people throughout your organization that work day-to-day in delivering value to your overall organization. And again, if you don't have alignment here and alignment here, you're not going to have alignment down here. So we need to make sure that we get to this point of alignment with our employees. And it starts with ensuring that the project team is delivering in a way that supports the overall executive team and the overall strategy of the organization. And down here, these are the front line people. If you're an organization with, say, 1,000 employees, you're going to have 1,000 differing points of view of how the organization should be operating and how their day-to-day jobs are going to support some of these other things up here. So as we're rolling out new technologies, this is why change management is so important. Because change management ensures that you get that alignment and that you ensure that people are on the same page and understand how it is the work they do every day and the changes we're rolling out to them are part of supporting a broader strategy. Now, just as importantly, we also want to make sure that we're delivering Now, just as importantly, we also want to make sure that we involve employees in some of the project team activities. So in other words, we don't want this to be just a project team that's operating in a vacuum or in an ivory tower doing their own thing behind closed doors. We want to get as many subject matter experts and stakeholders throughout the organization involved so they can be part of the solution. And that's a great way to get alignment is to make sure you have involvement from people. They're actually doing the work. They'll actually have to live with the solution, these changes, longer term going forward. Now, all of these different layers of alignment are really important. But what they're all driving toward is one big end result, which is business value. In other words, ROI. We want to return on investment for the dollars and time that we've just spent on our digital transformation. And obviously, we want to make sure that all of this right here ties back to and supports these higher level goals and objectives. Now, if we get alignment through these different layers, that's great. That's an important prerequisite to make sure that we're all aligned here. Now we need to make sure that the actual business value we're delivering is still tying back to these goals and objectives. So this is where continuous improvement and where actual measurement of results is so important. And so many organizations don't want to do this. They want to get through the implementation and thank their lucky stars that they got out of it alive and unscathed, assuming they did get out of it alive and unscathed. And they don't take the time to go back and optimize and figure out, did we achieve the business value we expected? And that's an important miss that organizations oftentimes fall into, or it's a common pitfall they fall into. So we need to make sure that our business value and ROI at the end of the day, what we're getting out of the project, is also aligned with the overall strategy. And when it's not, we want to make sure we have an iterative process to optimize these business results. And in this last section of the video coming up here in a second, I'm going to talk about how to get alignment amongst these different areas that we're talking about here today. So the big question that still remains is how do we get alignment? I've talked about what the different layers are and the different things we need to think about, but how do we get aligned? So how to get aligned. The first thing we can do is make sure we don't just rush into the project. What I mean by this is don't rush to implement. We don't want to just start rolling out technology because we picked a new software, we're excited about our new vendor, we bought the software in many cases, and now it's just time to go start designing and building and testing stuff. We'll get there. We'll get there soon enough. But before we do that, we have to ensure that we spend the time up front focused on these alignment issues. Now, just a caveat or warning sign here is that a lot of software vendors are going to say, don't worry about that, let's just get going on the project. You have to resist that temptation and take the time to make sure you've got clarity here and that you're aligned from top to bottom. You're never going to be 100% aligned, but you want to make sure you're mostly aligned and that you've at least reached a sort of minimum level of alignment as an organization. Now, the one thing I'm not answering here is tactically how do we do this? How do we get this alignment that we're talking about here? I actually created a video not too long ago. You can find it right here. There's a link at the top of the screen. Click on that. It'll take you to a video that deep dives into how to get alignment as an executive team. Now, the next thing we can do that's really important to ensure we get aligned is change management. And I know this is a very broad topic, a very broad category, but change management really ties back to all this stuff we're talking about here, beginning with articulating a strategy in a way that ensures your executive team is aligned, project team and employees. And the further you move down the organization here, the more important change management becomes. It certainly is important at the executive level. It's very important at the project team level. But this is where change management is the most important right here. So we need to make sure that we invest heavily in change management because that's the best way to get your frontline employees aligned with that overarching vision and goal and strategy for the organization. And then the third tip I'll leave you with is you want to make sure that you focus on benefits realization, benefits optimization, value realization, whatever you want to call it. The word itself doesn't really matter, but what's important is to understand that we need to measure the business value we're getting, and we don't want to just create a business case to justify the project. We want to create a business case to ensure that we see a path to getting ROI, and we also want to use that business case to make decisions as a governance tool throughout the project. So as we're making decisions around, do we want to invest more money in a certain module? Do we want to customize the software? Do we want to add a third-party bolt-on to give us some additional capabilities? It should all tie back to this. It should all tie back to business value, so we're not making these decisions based on emotion or gut intuition. We're basing it on the real business value we're going to get. And then once we've started to phase in different technologies and process improvements, now we want to go back and measure and see what sort of value are we actually getting, and where are we falling short? And where we're falling short, how can we create this continuous improvement loop that I talked about before to ensure that we're continuously delivering that business value? So that's another tip is to make sure you focus on benefits realization and bake this into your overall digital transformation plan. So I hope this has provided some input and guidance on how to get alignment and also understand what internal alignment means. If you'd like to learn more about change management and how to be successful in topics related to stakeholder management and executive alignment and communications and training, all that good stuff, download our guide to change management. It's a free guide you can find right here. Scan this QR code or go to the links below. It's a guide that will give you a bunch of different tips and best practices to be successful with your change initiatives as part of your digital transformation. I hope you found this information useful and hope you have a great day. Microsoft Mechanics www.microsoft.com www.microsoft.com