Misalignment: The Wrong Execution of the Right Idea

Over the past 30 plus years in the medical device space, I have had the privilege of working for some of the best Fortune 50 companies in the world. Because of this, I’ve been blessed to work under some of the best leaders the device space has experienced. Bill George, now teaching at Harvard University, was instrumental to Medtronic plc’s success in the 1990s.

Another key leader at Medtronic, Robert (Bob) Guezeraga—now managing partner at RMG—was one of the brightest turnaround experts I’ve encountered. Of the many leaders I have worked under, I single out George and Guezeraga because—whether intentional or organic—their approach to leadership is a very supply chain- (alignment-) minded approach.

Coming from the opposite direction, I believe that Tim Cook of Apple Inc. has become a successful leader because of his supply chain lineage. Not because part of his career was supply chain-oriented, but because successful supply chain leaders, as well as successful presidents and CEOs, have what I believe is an inherent wiring toward the concept of alignment.

In order to successfully configure your supply chain, care chain, value chain, or company, you must create a culture of discipline around alignment. And my definition of alignment isn’t a term or a collection of words, but a methodology for ensuring success—the Oleksy Enterprises OE-Tier5 alignment methodology. The OE-Tier5 isn’t rocket science by any means, and the simpler you keep it, the more effective it becomes. Additionally, in my view, the OE-Tier5 journey is as valuable as the destination itself.

In prior articles I have written, as well as those upcoming, you will see a constant and continual thread—alignment. If you fail to align your care/value/supply chains with the direction in which you need to head, you will simply implement the wrong execution of the right idea. You may have had the best of intentions, but you failed to align your configuration and actions correctly, and therefore, did not succeed. As I briefly unpack the model, I will provide examples of the use of alignment; and as importantly, I will point out the ramifications of not using the concept.

Tier 1: Business Direction
Determining your business direction takes a lot of work and soul- searching within your organization. Companies that have their business value proposition nailed down tend to be superior in their industry because the proposition drives the balance of their alignment. Simply put, if you do not understand where you are trying to go, you will never be able to map out (align) your care, value, and supply chains. Many models exist to help an organization determine its business direction. I’ve used many. Regardless of which one you choose, make sure it helps your organization determine where you are heading—not how, but where is the most important question in Tier 1. Your organization should be asking itself, “In order for our organization to be successful, we need to be headed to _______ (where)?”

Tier 2: Configuration
“Configuring” or aligning your care, value, and supply chains is dependent on your business direction, not the other way around. For example, if your organization’s business direction is being the lowest-cost provider of a certain product with no frills, you had better configure your chains with a relentless focus on cost, cost, cost. You need to be looking at every aspect of your chains worldwide to determine the lowest-cost approach to delivering that product. Simply put, if your business direction is cost, you might want to pass on buying that new corporate jet with all the bells and whistles.

Tier 3: Actions
After you have determined your business direction and determined how you wish to configure your care, value, and supply chains, the next step is to determine who, what, when, where, how, etc. The most common mistake we as humans make is always jumping to action without first determining Tier 1—Where are we heading? and Tier 2—How are we going to get there? As you read this article, ponder how many times your organization has taken action on items that were not configured to a business direction, such as launching a new product and cutting your inventory to the bare bones; or trying to take cost out of a new product line, yet allowing engineers to select one of the most expensive materials on the market. Jumping to action and not having the discipline to follow a tiered approach of alignment is human nature more times than not. Discipline is key. We need to constantly be asking, “Are we simply jumping to action here?”

Tier 4: Metrics
There are numerous books available on the subject of metrics. Thus, the only advice I will offer now is to ensure your metrics are aligned to allow proper feedback, which in turn ensures your actions are aligned to your configuration and your configuration is aligned to your business direction. The old cliché, “you get what you measure,” is true—trust me. Measuring something of no value is counterproductive. I always cringe when I see metrics that have nothing to do with Tier 1, 2, or 3. For instance, take an organization whose Tier 2 and 3 are heavily dependent on the use of outsourced suppliers but the metrics are monitoring supplier price reductions instead of supplier performance, where price may be one of the least important elements.

Again, take a look at your own organization’s metrics. They should provide feedback that:

• Our actions (Tier 3) are aligned with our configurations (Tier 2);
• Our configuration (Tier 2) is aligned with our business direction (Tier 1); and
• Our business direction (Tier 1) is being accomplished.

Tier 5: Talent
Over the years, I have become more outspoken on this Tier than ever before because I have come to realize that if you don’t have the appropriate talent and “mojo” within your organization in all functional areas, you will fail. Appropriate talent of all types needs to execute the Tiers from the C-suite to the shop floor. This is usually where much iteration takes place between the Tiers. Additionally, I have come to the realization that true supply chain talent is wired toward the ability to think in an alignment oriented, multi-tiered manner and possess the leadership mojo to drive it home. Execution is everything. When I think of Bill George and Bob Guezeraga, I think of aligned execution. The care, value, and supply chain talent leading your organization’s OE-Tier5 methodology should be strong leaders with the mojo to execute. I know of many organizations that have excellent supply chain leaders that possess these talents. I also know of many that do not have such leaders, and what a difference that makes.


Iterations
Notice in the graphic, to the right of the tiers, there are feedback loops. These loops are checkpoints to determine whether or not tiers need to be adjusted or not. For example, let’s say that our business direction has been set. We move on to configuration and realize that in order to create the configuration that ensures success of the Tier 1 direction, we need to purchase new equipment, but we are concerned that we cannot afford the investment required. We then return to the stakeholders of the Tier 1 direction and ask whether or not we should challenge Tier 1, find an alternative configuration at Tier 2, or simply make the investment. Another example is talent. We may find that when we get to Tier 5, we simply do not have the appropriate talent to execute the actions in Tier 3 and therefore, we need to revisit other Tiers for guidance or confirmation. It’s important to realize that you should not do this in a vacuum and that revisiting multiple tiers in an iterative fashion is healthy and, more often than not, required.

Focus vs. Alignment
Many leaders believe that focus is the most important attribute. I’ve seen many an organization focus, but end up with the wrong result because they were focused on the wrong configuration. Focus is all about attention. It’s a discipline, not a methodology. As I have mentioned in previous articles, I am gravely concerned about healthcare’s focus on cost vs. patient alignment—a subtle difference with huge ramifications.

I recently spoke to a caregiver who told me, “My vocation and calling in life [alignment] is to take care of patients. In reality, I’ve been told my new vocation [focus] now needs to be on how much money I can save.” As I dug deeper into this situation, I asked for an example. She said, “I am not allowed to use therapies that require capital if a single-use disposable is available—even when I know that the capital-driven therapy is better for the patient.” I probed further and said I thought the business direction should be finding what the best patient outcome is, and then setting the best possible price; rather than setting a price and then figuring out the best patient outcome at that price level. She said, “Our business direction is patients. Our configuration and actions [focus] unfortunately is on cost.”  This is a classic example of supply chain focus vs. care chain alignment. I said to her, from now on, I’m calling you “Miss Alignment” because you’re misaligned!

In an attempt to understand the caregiver industry a bit further, I talked to another caregiver who said, “We do not use single-use disposables if a better capital-driven therapy is available.” I asked why. She said, “We’ve had issues with the single-use disposable causing infections and when the individual gets re-admitted to the hospital, it can cost as much as $10,000 per day, which we do not get reimbursed for. And that cost trumps, by a large margin, the savings on single-use disposables—not to mention the care of the patient.” I was relieved! In this case, this hospital did an analysis of the total care chain and implemented a configuration that minimized the total value chain cost with an alignment toward the patient, which accomplished this hospital’s business direction. I encouraged her to call Miss Alignment for me.

Alignment of configurations and actions (focus) is of utmost importance in order to ensure success. Focus without alignment can lead to unintended results. Your organization’s supply chain leaders should be directly in sync with your C-suite leaders because the thinking is so similar. It’s not an accident that organizations like Apple are turning to their supply chain leaders to also run their organizations. I created the OE-Tier5 model as a methodology and approach to help organizations successfully execute their business models.

Many of the best intentions have gone astray, forcing one to ask, “How did we get here?” More times than not, it’s because Miss Alignment was running the show. 

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Chris Oleksy is Founder and CEO of Oleksy Enterprises and Next Life Medical and can be reached at [email protected] or [email protected].