Chronic Misalignment
Why leadership’s calls for better organizational alignment don’t work, and how a simple ‘value language’ can remove common barriers

By Gregory Dickinson and Michael Puleo
Illustration By Josh Cochran

Value maps: Shared “value language” to link operational performance to business results
One of our most consistent findings from work with all levels of people in the organizations we serve is that people are hungry for information that gives them better insight into how their leaders think and that helps them understand how what they do (and could do) creates value for the company.

The other good news is that it doesn’t take (much) rocket science to start to get your people onto the same page. We have found that a new twist on an old concept — a quasi-DuPont model tied to operational business processes and tactical improvement actions — can catalyze much stronger business understanding and more aligned business activity both among executives and much deeper in the organization.

“With this common view and language in place, it should become much easier for leaders to communicate how the company is performing and in which areas the business most needs improvement.”

The DuPont model is a decomposition of shareholder value into a set of financial drivers, each of which is further decomposed into its own set of subordinate financial drivers. The new twist is to attach the DuPont model’s financial drivers (which, as outcomes, are influenced only indirectly through business decisions and activity) to operational drivers (which, as manageable processes, are influenced directly). We have found that putting these decomposition charts, which we call value maps, on a single poster provides a strong, broadly accessible framework for communicating how value is created within the operations of a company. And in much the same way a topographic map provides an objective, geographical context for planning a journey, value maps can provide a logical, concrete and consistent context for business understanding and decision-making.

Once you have established a value-centered, operationally driven value map, you can challenge your talented, diversely skilled people to continuously ask and answer the five key questions posed earlier. Equally important, you can expect them to start thinking, planning and communicating more contextually, specifically considering the shareholder value impacts of what they do and the decisions they make. The CFO of one of our clients explains why this matters:

“When we used to have business planning meetings, the IT people would use technology frameworks to explain what they were doing and why,” he said. “The HR people would use an HR framework and talk in HR terms. The sales and marketing folks would use their own frameworks. Not only was it confusing for cross-functional leaders like me, but it also made it hard for these leaders to understand each other and work together. Now our value map is the accepted business language, and everyone knows they have to overlay their discipline onto the business framework and not the other way around. People know that, if you can’t explain what you want to do and why you want to do it using value maps as a backdrop, you’re probably not thinking from the right perspective — bottom-line business impact.”

When we first started using value maps with clients, we expected and received a positive response from CEOs, CFOs, COOs, strategic planners, program office leaders and other cross-functional, financially focused executives. What we underestimated was how strong the interest would be within individual business units, departments and project teams.

As we began helping leaders use value maps deeper within their organizations, it became clear that these relatively simple, single-page posters were typically more effective in communicating goals, priorities and cause-effect relationships than were multi-page presentations, internal executive memos and annual reports. People throughout the company started to see the maps as windows into the thought processes and priorities of their company’s executives and shareholders. Furthermore, people who had been unfamiliar with business terminology (especially those without formal business training) were frequently surprised by the simplicity of the concepts and the cause-effect relationships.

Not surprisingly, we started seeing value maps not only on the walls of executive offices, but also on the walls of staff cubicles and project workrooms. As the head of customer relationship management for one of our clients said: “[Our value map] certainly enthused a lot of people to really understand how the work they’re doing is going to affect shareholder value… and how the metrics on their programs and projects will roll up ultimately into a financial understanding of the contribution we make to the business.”

Equally important, we started to see value maps used to focus and accelerate pre-existing improvement efforts. By establishing a shared language and a deeper foundation of business understanding across the organization, value maps were starting to help companies realize the full potential of powerful management approaches like Balanced Scorecards, Six Sigma, and Hoshin. While each of these approaches is powerful in its own right, value maps were providing a valuable context and language that both focused and accelerated their implementation.

Keys to an effective value map
Like any geographic map, value maps are intended to provide an objective, agenda-free lay of the land. Preserving the logic and objectivity of the cause-effect relationships is the single biggest challenge in creating an effective value map. Embedding politics and agendas will doom a value map because they can threaten the acceptance of the map (i.e., Executive A sees the value map as a mechanism for promoting Executive B’s agenda) and because they can impact the timelessness of the map (i.e. politics and agendas shift, so the map shifts, too.) Undeniably, politics and agendas have their place, but with this objective, fact-based map as a basis, your people will be more capable of expressing and justifying their assessments and opinions regarding where the company is, where it is headed, and how it should get there.

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