Alignment (2) – ensuring corporate goals are aligned through the organisation

As we head in to the Australian Open it’s worth looking at how alignment of individuals with wider goals requires specific planning and how this sometimes breaks down in a corporate context, where the front line goals get disconnected from those of support services.

The top players will have planned rigorously for the coming year and for players like Murray, Djokovic and Federer winning grand slams will be priority goals.  While the latter two have won multiple majors, Murray won his first last year and is undoubtedly looking for more.  These goals require specific training, with the aim of peaking in January (Australian), May (Frnech), June/July (Wimbledon), August/September (US Open).  Physically the capacity requirements are different for these tournaments than for the rest of the season.  Each major requires that players play best of five set matches and will need to win seven matches over 12 or 13 days to win the tournament.  Regular tournaments during the season require the top players to win four or five best of three set matches over five days (give or take a day).  The physical demands are different and the coaching teams of the top players will be specific in working on players capacity to ensure they reach their peak, physically and mentally, to perform at their best for the majors.  The success of these teams has been evidenced by the number of tournaments that have had the top four players in the semi finals.  Last year Murray made the semis or finals of all the slams except the French, where he lost in the quarters.  Since winning Wimbledon in 2004, out of 34 slams, Federer has never failed to reached the quarters of any and has lost before the semis only four times.

This speaks volumes for the value of the specificity of his training and preparation but what of the corporate world.  Federer and Murray are the ones who have to go out and perform but have significant support from teams behind them.  In investment banking, for example, there are a limited number of revenue generators, principally in trading and origination, with increasing numbers providing  support across technology, operations, risk management, compliance, HR, etc.  To ensure goals are reached these need to be aligned and appropriate capacity provided to ensure performance is met whether it be to address the growth in electronic trading, market data or complex products.  For this to happen business strategy needs to drive capacity in support services like technology and operations appropriately.  For example in the trading world the proportion of structured business to flow business would be a key element in determining technology and operational support capacity – see diagram.

FMStructuredFlow1

 

 

A few years we did some work with a global bank to look at this very issue – analysing how business strategy drove capacity.  Simply put, there was a disconnect in the relationship between the plans of the revenue generating divisions and the largest key areas (operations and technology) that supported them.  Surveying much of the industry at the time this was not a unique or even unusual situation.  Budgets are allocated annually and often seem to have some arbitrary relationship to the previous years numbers, plus or minus depending on the business climate.

For the industry to function effectively there needs to be alignment between those who set business goals and those who support them.  Elite performance is achieved by those who plan and execute rigorously and engage all those involved.

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