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7 Dragons

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Cheung Yan: China's paper Queen: Alignment -7 S's

The alignment of the Nine Dragon's strategy

Alignment of internal organisational elements with the new strategy is critical for success. Alignment means that successful strategy must be formed around a coherent and reinforcing set of appropriate practices and structures. The 8 S's of alignment are based on the McKinsey 7S. Modifications were made to replace Skill by resources and Strategic Performance has been added to the model to help focus the strategy execution effort. The basic premise of the model is that there are seven internal aspects of an organization that need to be aligned if it is to be successful.

-Alignment of organisational structure-Organisational structure can influence communication, coordination and decision making. With new strategy in place, the new structure must be aligned with the desired goals from the new strategy. The structure of the company might need to change in order to provide a more transparent management style to the stakeholders and avoid the risk of been seen to be making subjective decisions.

- Alignment of Staff / Resources: Everyone in the firm is involved in implementation. Senior management has a responsibility to communicate strategic intent to employees, mid to lower managers have to translate the intent to other employees. Selecting and retaining the right people to execute the strategic direction is not simple. Cheung claims that she is critical of heavy-handed family-style management, and has tried to run her company professionally but she has been accused of nepotism when she appointed her son as a non executive member of the Board of Directors.

- Alignment of incentives: Reward is a big part of the people side of implementation. Have you ever worked in a situation in which there were few incentives to work toward key goals? To successfully implement strategy, every unit and every employee should have measurable performance goals with clearly stated rewards for goal achievement. The reward should be appropriate to elicit the desired level of employee effort. The reward can be a balance of extrinsic and intrinsic, depending on the need of the individual. The performance-linked incentives remuneration packages at Nine Dragons are aligned with the pursuit of competitiveness; the lowest-paid worker earned between about US$220 and US$350 a month last year (2007), in addition to pension and other benefits, compared to the average monthly income of about US$140 for workers in the same city.

- Alignment of shared values (culture): Organisational culture and leadership must be supportive of both the strategy and the day-to-day work that implement it. Cheung Yan still runs



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