In our work we often speak of the essential alignment among the interdependent components of a business operating model.  We illustrate the idea of alignment through words and diagrams, but there is a deeper knowing – a business sense or leadership feel for timing and balance – that eludes easy verbal description.

Through a sequence of analogies and simple examples, this issue of Insights focuses on the deeper, tacit knowledge that is required of executives in attaining the alignment that is created in the “white space” between components.

Essential Operating
Model Elements

Reduced to the simplest level, every business shapes itself around three fundamental components:

1. Its strategy: Its reason-for-being, its market focus, what value it can deliver and for what price, how it will compete
   
   
2. Its structure: How it will organize processes and systems to execute on the strategy, operate efficiently, make decisions, deliver products, communicate and interface with suppliers and customers
   
   
3. The behavior of its people: The talent needed to lead and deliver on its strategy; how to attract, train, focus, compensate, and promote the right people

From the local pizza shop to the largest of global corporations, business leaders must address these fundamental components. It is not sufficient for a company to choose to be good at just one, or even two. The perfect pizza recipe still has to be made, delivered on time and sold by someone at a reasonable profit.

By all rights the complexity of national and global operations with multiple product lines, suppliers, service models and distribution channels demand the input of sophisticated specialists in the areas of strategy, structure and behavior. For sure, thinking strategically is different in nature than designing effective organizational processes, which is different than changing cultures and developing talent – each a domain of business acumen around which expertise has evolved. While some may have the luxury of building out approaches to strategy or structure or behavior separately, leadership does not.

Thinking About Alignment
While focusing on one piece of the triad is necessary at times, it is equally critical to see how the whole network integrates and works together to achieve the optimal business results. The three components are interdependent and every organization needs to have alignment among its strategy, its structure and the behavior of its people.

What do we mean by alignment? The following explanations build on each other, step by step. At each step we shift our focus slightly, moving further away from the tangible components of an operating model and stepping more into the intangible qualities and network required to connect them in the white space that exists between.

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