As highlighted in Viable Vision, using the Theory of Constraints (TOC) most companies today do not seem to have the right roadmap to their vision, which means their vision is not viable and precious resources are wasted.
We believe that the true viability of a vision demands that every human, organizational, technical and financial resource increasingly supports and contributes to achieving corporate goals in a fashion that is: verifiable, measurable, efficient and effective, and in compliance with the company’s principles, policy directives and constraints.
GAP™ is an innovative yet pragmatic methodology and software tool that offers a simple means of achieving viability through the development, implementation and sustaining organizational focus in the middle of all the complexity. It guides management using a disciplined approach within the full business context to focus their change efforts. GAP™ creates ongoing goal alignment of all business unit objectives, resources, performance measures, capital projects and budgets objectively and consistently at all organizational levels – all within the context of the board and enterprise goals.
TOC and GAP™ share the foundation of cause and effect logic. The relative contribution of each linkage between the entities is determined. GAP™ uses the organizational structure as a metaphor and considers the structure regarding “tiers.” Each tier represents a single level of organizational purpose units. “Tier 1” is considered as “Enterprise.” ‘Enterprise” goals are typically those of Board of Directors. These goals usually express enterprise goals and priorities and constitute the accountabilities of the Chief Executive Officer. “Tier 2” encompasses the next reporting level, e.g. “Vice President” or “Executive Vice President” units. “Tier 3” represents the next reporting level, e.g. senior managers and “Tier 4” represents the lowest operating levels of management.
What to change?
The first step in the process is to capture all the objectives and measures that are documented for each position. A series of personal confidential meetings are held with the directly responsible person (DRP) to find and record the objectives and measures that are in place. All links, contributing directly to and in parallel with, are assigned an intensity based on their relative contribution. Once the model is constructed in GAP™, the model provides an enhanced and dynamic Current Reality Tree.
The GAP™ software then identifies:
- opportunities to achieve better alignment
- synergies that exist, providing opportunities to remove duplication/overlap
- the misalignment of budgets
- the “weakest” contributors
- the “best” contributors
- the degree of alignment unit performance metrics with enterprise goals
- impact on goals of performance achievement (or lack of)
- projects prioritized by business priorities and risk assessments
- additional dimension
What to change to?
From the above analysis, using additional TOC tools, board interaction, etc. a vision for the organization is created and defined regarding strategic goals. Using the GAP™ software, a new structure is created based on the organization’s essential purposes, which are broader than critical processes. Management is then engaged in working from the top down in a series of discussions conducted in an informal, Socratic, collaborative fashion. These discussions find and validate objectives, organization structures, accountabilities and players, related to goals and performances and the relative contribution levels of the ”Tier 2” units’ objectives. Once a tier has been completed all DRPs meet collectively with their sponsoring executive and together confirm the goals, measures, linkages and relative contributions. This process is repeated for the subsequent tiers.
This process promotes organizational transparency, facilitates communications and builds consensus. Once the model has been completed, objective, verifiable and measurable goals and supporting performance measures exist for each organizational unit - across all levels of the enterprise.
With the above completed the organization has a fully functional interactive Future Reality Tree. The GAP™ software facilitates a process of ongoing improvement:
- Corporate Modeling – refining the organizational structures and unit goals to achieve continuous alignment with corporate goals as they are modified for emerging issues
- Assignment of resources to business priorities – where the organization’s best performers, assuming they have the necessary competencies, are assigned to the goals with the highest contribution to corporate goals
- Identification of the “weakest” contributors and strengthen them
- Assessment of the synergies providing opportunities to remove duplication/overlap
- Alignment of budget allocation to organizational goals, Contribution Based Budgeting
- Prioritization and risk assessment of all projects to corporate goals
- Measurement of the individual’s contribution to corporate goals.
- Other desired additional dimension assessments.
GAP™ creates a closed-loop system to drive ongoing improvement: strategic plan -> the business plans -> action planning -> implementation -> measurement -> strategic plan. This creates a complete, integrated methodology that integrated functions and processes. The management team revisits the cycle would quarterly.
As in Viable Vision, GAP™ provides the correct, tested frame of reference that drives people in companies to work willingly and happily together, the CEO and senior management no longer need to be the referees between the silos in their organizations, and everyone’s agenda is fully aligned to achieve the corporate goals.
- Analysis — week or two of set-up time depending on the size of the organization
- Complete restructuring — accomplished within three months.
As a tool for ongoing improvement -- management currently sets goals, manage performance, budget, assign resources to budget priorities, and selects capital projects; GAP™ integrates these function into a single model and consistently assess each using the same priorities achieves superior results in a fraction of the time. It also eliminates the time spent promoting an organization unit’s interest, as DRP quickly recognize, accept and appreciate that the decisions will be based on fact and logic for the greater good of accomplishing organizational priorities.
Size of Organization
Like TOC, the process is applied to all sizes of organizations. The prerequisites for installation are:
- a sponsoring executive at the top
- a strong desire to have goals aligned to the top
- a strong commitment to having a process of ongoing improvement
GAP™ Software Capabilities and Limitations
- Accommodate 12 “Tier 2” management, 144 “Tier 3” management, and 1728 “Tier 4” management.
- Alignment initiatives can be undertaken at any level (e.g. The sponsoring executive can be a Tier 3 manager interested in aligning all his or her “Tier 4” management.)
- Limit to 6 objectives per function units – an intentionally defined limit to ensure focus on what is important
- Identification of efficiency, effectiveness and organizational contribution measures for each objective
- Over 200 built-in reports
- Exporting of all report into Excel format
- Contribution Based Budgeting to up to 6 resource types (i.e. $$, headcount, vehicles, etc.)
GAP™ anticipates the emerging complexity of today’s enterprise structures and operations. It’s alignment protocols have the built-in ability to recognize, align and integrate:
- Committees and Task Groups
- Third party suppliers
- Holding companies and organizations
- Affiliated organizations and units
Our governance alignment program is essential to ongoing good governance at your organization. Our post Goal Alignment Program – A Breakthrough in Governance Analytics provides you with insights on GAP™ and how it can optimize your organization.