Todd Herman Associates e-Update — November 2007

The Discipline of Alignment

Today, value in the "new economy" is based less on physical assets, and more on intangible assets.

These key intangible assets are:

• People — the embodiment of intellectual capital
• Process — the steps for getting things done
• Technology — the software applications used in the business

Consider the many pieces of technology needed to efficiently and effectively carry out a company's mission — order processing, operations, financials, customer relationships, web site, and email are "entry level" requirements to be in business.

How to address these technology needs? Several of our small-to-medium sized business (SMB) clients handle technology-related responsibilities, as follows:

• Internal staff typically provide — as part of their "other duties" — first level help desk and support.
• Company A externally hosts the web site and email.
• Company B provides support for servers and PC's inside the company firewall.
• Company C is the vendor for the business and financial applications — and, depending on the software, Company D may be involved for industry-specific customizations.

The number of pieces compounds the daunting task of aligning People, Process, and Technology — Together (PPT-T) to produce consistent and repeatable business results. This alignment is difficult, even for large companies having "product experts" knowing the specifics of a product.

Alignment is harder still for SMB's — few persons can do it all and, if they can, an SMB probably cannot afford them, or hold their interest for long.

Where do we fit in this technology ecosystem? We help companies define their own "big picture" of how technology can be used to support their strategic goals, and then help them work toward their unique alignment of PPT-T to support their strategy.

The Discipline of Market Leaders, by Michael Treacy and Fred Wiersema, outlines the 3 competitive strategies — or "disciplines" — a company can use to dominate a specific market.

• Companies practicing Operational Excellence compete on low cost by emphasizing their supply, production and distribution processes — Wal-Mart epitomizes such a company.
• A Product Leader company, such as Nike, continually improves product performance by emphasizing processes to research, develop, and successfully launch new products.
• Customer Intimate companies emphasize their customer selection, acquisition, retention, and growth processes. Todd Herman Associates is a Client Intimate firm — while attributes of our services meet general requirements for all professional services, we differentiate ourselves through highly customized services, an intimate working partnership of client and our personnel, and a trusted brand built and nurtured for over 18 years.

Once a specific strategic discipline is recognized, implications in aligningPPT-T for business results become clear and actionable — and companies differentiate themselves by the relative emphasis given to specific processes.

Business executives want to know — "How do we go about improving our business results?" The answer is this: with better alignment of your true assets — people, process, and technology — you can meet your specific strategic goals. Not sure where to start? A good starting place is to review your key processes with a Business Process Review and Improvement assessment — a short (3 to 5 days), focused engagement to analyze major processes, assess the existence (or lack) of alignment, identify opportunities to improve alignment, and estimate benefits and costs of those improvements. Actionable items can then be defined, prioritized, and implemented.

Aligning PPT-T effectively is a discipline itself, because it requires a sustained focus uncommon in today's environment. In considering our recent work, I am struck by one client who has been consistently working to improve alignment for nearly 3 years. The payoff? Top line growth, bottom line growth, and tasks flowing smoothly through a focused, disciplined, well-aligned business.

Are you ready to get started?

Sincerely,

Todd L. Herman