Applying Net Harmonization Value
- Claas
- Apr 9
- 7 min read
What to do differently
In a previous article, I introduced the idea of Net Harmonization Value (NHV) as a way to look at harmonization from a more balanced perspective. Most organisations approach harmonization as an obvious objective. Standardised processes, aligned systems, and global templates promise efficiency, scalability and control. Especially in large, distributed organisations, this logic is compelling and often justified.
See the previous blog on the NHV concept and definition.
At the same time, harmonization requires significant effort. Aligning processes across regions and functions takes time, coordination and continuous involvement. Decisions take longer as more stakeholders are involved. Changes become more complex because they affect a broader setup. Over time, flexibility decreases, even in areas where local adaptation would be beneficial.
These effects are often less visible than the benefits. Efficiency gains are typically part of the business case, while the ongoing effort to maintain alignment tends to remain implicit.
NHV brings both sides into view. It describes harmonization as a trade-off between the value created through alignment and the effort required to achieve and maintain it. The outcome varies by context. In some areas, the net value is clearly positive. In others, the effort to harmonize outweighs the benefits.
The implication is straightforward. Harmonization should be applied deliberately, in areas where it creates more value than it consumes.
Changing the starting point
In many organisations I have worked with, harmonization is rarely questioned. It is the default objective. Especially in larger organisations, alignment is seen as inherently good and desirable. A common process, a shared system, one global way of working.
The assumption is that more consistency leads to better outcomes, which can be true. But I have seen this pattern often enough to recognise how early the direction is set. When a new process is introduced or an existing one is redesigned, the discussion quickly moves towards how to align it globally. Local variation needs to be explained, deviations require justification and alignment becomes the expected outcome.
At that point, the question of whether harmonization actually creates value is no longer part of the discussion.
There are situations where harmonization clearly makes sense. Traffic rules are a simple example. Having one consistent way of driving on the road creates safety and predictability. The value of alignment is obvious and the same applies to things like financial reporting or compliance processes. Consistency reduces complexity and makes control easier.
But there are also situations where harmonization becomes questionable. Imagine trying to standardise how every household cooks dinner. Or enforcing the same daily routine for everyone, regardless of their needs. The effort to align would be high, and the benefit limited. In organisations, similar patterns appear. Customer interactions that differ by market, local ways of working that fit specific conditions, or processes that change frequently are often forced into one template. This creates additional effort without improving the outcome. I have seen processes that looked consistent on paper, but required constant exceptions in practice. And changes that took weeks because too many parties needed to agree.
Applying NHV changes the starting point. The relevant question becomes whether harmonization creates enough value in that specific context. This shift has practical consequences. It opens up alternatives. It allows for different levels of alignment. It makes it acceptable to decide that full harmonization is not the best option.
In some cases, harmonization remains the right choice. In others, flexibility creates more value. The important part is that the decision is made consciously.
A simple check before you harmonize
Once harmonization is no longer treated as the default, the next step is to make the decision more tangible. This does not require a detailed analysis or a complex model. In most cases, a small set of questions is enough to get a first, useful view.
When looking at a process, it helps to consider:
how often it changes,
how different the requirements are across regions, customers or business units, and
how important speed of adaptation is in that context.
It is also relevant to understand how many stakeholders need to be involved in changes and
what the practical impact would be if the process is not fully aligned.
The answers do not need to be precise. What matters is the overall direction. A process that changes frequently, varies across contexts and requires quick decisions will behave very differently from one that is stable, uniform and rarely adjusted.
This is where the first indication appears. In some cases, alignment will clearly create value. In others, it will introduce additional effort without improving the outcome.
What makes this simple check useful is that it keeps the discussion grounded in the actual characteristics of the process. It shifts the conversation away from general assumptions about harmonization and towards a more concrete assessment of where alignment helps and where it does not.
A simple decision frame
Once the initial assessment is clear, it helps structure the discussion in a more consistent way. A simple way to do this is to look at two dimensions:
1) how stable a process is over time and
2) how much it needs to vary across different contexts.
Some processes are relatively stable and follow similar requirements everywhere. In these cases, harmonization tends to create clear benefits. A shared approach reduces duplication, simplifies systems and makes scaling easier (HARMOZINE).
Other processes are stable in themselves but differ across regions or business units. Here, full harmonization often creates tension. A common structure can still be useful, but it needs to allow for controlled variation where required (CONTROLLED VARIATION).
There are also processes that do not vary much across the organisation but change frequently. In these situations, strict alignment can slow things down. Keeping a lightweight level of standardisation while allowing faster adjustments often works better (LIGHTEIGHT STANDARD).
Finally, there are processes that both change frequently and differ significantly across contexts. Trying to harmonize these globally usually leads to high effort and limited benefit. Local ownership and flexibility tend to be more effective in these cases (LOCAL OWNERSHIP).
This is not about placing every process neatly into a category. The value of this view lies in making the trade-offs visible. It provides a simple structure to decide where alignment creates value and where it introduces unnecessary complexity.
Putting a number on alignment effort
If NHV is meant to guide decisions, the cost of alignment needs to be more than an abstract idea. It does not require a precise calculation, but it needs to be grounded in something that can be observed and discussed.
In practice, this starts with the effort that repeats. Time spent in alignment meetings across regions and functions is usually the most visible part. The number of people involved, the frequency of these discussions and the level of seniority quickly add up. What looks like coordination in isolation often becomes a noticeable share of capacity over time.
Decision cycles provide another perspective. Changes rarely happen in one step. They move through several rounds of discussion, alignment and approval. Timelines extend, dependencies increase, and the effort grows with every additional stakeholder involved.
There is also the ongoing work of maintaining the setup. Global templates need to be adjusted when requirements change, documentation needs to be updated, and changes need to be communicated and rolled out consistently. This effort does not disappear after implementation. It becomes part of how the organisation operates.
None of these elements are exact measures. Still, they can be translated into simple estimates. Time spent, number of people involved, duration of change cycles. Taken together, they give a reasonable sense of the effort required to keep things aligned.
What becomes visible through this is less a one-time investment and more a recurring cost. The more alignment is required, the more coordination is needed to maintain it.
That is usually enough to make the trade-off tangible.
Harmonization was overrated. Now the gap becomes visible.
As discussed earlier, harmonization has often been treated as the safer option. A common process, one system, one way of working. The assumption was that alignment reduces complexity and therefore creates value, and in many cases this assumption was not explicitly questioned.
At the same time, the opportunity cost was rarely assessed with the same level of attention. The effort to align, the time spent coordinating, and the loss of flexibility were part of the setup, but not part of the decision-making.
What is changing now is the context around variation. Process variants can be developed, implemented and tested faster than before. Adjustments can be applied across multiple variants with relatively little effort, integration has become more flexible, and data can still be consolidated without forcing everything into a single process structure. Managing variation still requires effort, but it is no longer the dominant constraint it used to be.
The effort required to maintain alignment behaves differently. Coordination, agreement and governance remain largely unchanged. The number of stakeholders still drives the speed of decisions, dependencies still slow down changes, and the effort to keep things aligned increases with the scope of standardisation. These are organisational effects, and they persist regardless of technological improvements.
This makes the gap visible. The benefit of harmonization is going down in many areas, while the effort required to maintain it remains. What used to be an accepted trade-off becomes more difficult to justify when the underlying assumptions no longer hold to the same extent.
Harmonization is therefore no longer the safe default. In many situations, it turns out to be the more expensive option once the full effort is taken into account.
What to do differently
As outlined earlier, NHV provides a way to look at harmonization as a trade-off between value and effort. The intention here is not to extend the concept further, but to make it usable.
From experience, three things make the difference.
Start with the question, not the assumption
In many cases, harmonization is assumed before the discussion begins. The focus then shifts to how to align, while the question of whether alignment actually creates value is no longer raised. Bringing that question back to the beginning changes the dynamic. It makes alignment one option among others, rather than the default.
Use the dimensions to guide the decision
The dimensions discussed earlier are not meant as a classification exercise. They provide a simple way to understand the conditions of a process. Stable and uniform processes tend to benefit from alignment. Processes that change frequently or differ across contexts tend to absorb the cost of coordination more quickly. Making this explicit helps to decide where alignment is useful and where it adds effort without improving the outcome.
Make the effort tangible
The cost of alignment does not need to be calculated precisely, but it needs to be approximated. Time spent in coordination, number of people involved and duration of decision cycles usually provide enough information to understand the order of magnitude. In many cases, this already makes the difference visible. Even rough estimates are sufficient. If one option requires continuous alignment across multiple stakeholders and another allows local implementation, the direction of the decision becomes clear.
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