It is an all-too-familiar scenario. ABC Company misses badly on its commitments several quarters in a row. The owner becomes frustrated with the company’s management and their lack of alignment to a corporate vision for growth. Management and staff start to set their own agendas and to waste efforts on non-priority opportunities. The bottom line stagnates or starts a downward spiral.
Every year the news is inundated with such reports. Even in large organizations where top-level executives are recognized for their vision and have articulated what seems to be a sound business strategy on paper, results fall short of expectations.
We have all been there at one point or another in our careers. The leadership team spends long hours agreeing on a 3- or 5-year business strategy. Management teams work equally hard to come up with supportive annual plans. Both teams generate PowerPoint presentations and exhaustive spreadsheet files. Not much happens in terms of actual deliverables and then people start to write off the value of strategic planning.
Why do these events occur so often? Certainly you need to assess the specifics of a given situation. However, based on my experience, a key element that needs to be addressed is strategic alignment.
What is strategic alignment?
Strategic alignment is the linkage between the goals of the business and the goals of each key contributor. Key contributors include divisions, business units, departments or individual employees who have an interest in the continued success of the corporation. When all of them row in the same direction the likelihood of flawless corporate execution becomes stronger.
Strategic alignment has several advantages once it is properly implemented and practiced. Benefits include:
- ensuring efficient use of scarce resources,
- increasing speed of execution,
- focusing team efforts towards common goals, and
- improving employee motivation, especially since they have a keener sense of how they contribute to the results as a whole.
What are the key elements involved in implementing strategic alignment?
- Communicate, communicate, communicate. Everyone in the organization needs to understand the elements of the vision and of the key strategic directions. Relentless repetition by the leadership and management teams at every opportunity, including sales meetings, company meetings, and operational business reviews, allows each employee to understand vividly how he/she can contribute to the overall progress in their day-to-day jobs.
- Link the results of each employee’s job to the progress of the entire corporation and do it clearly and simply. This is best accomplished by using simple key performance measures (KPMs), which can be connected to the employee’s annual performance review.
An excellent practice is to use a cascading set of goals that quantitatively measure the progress of the strategic implementation. This waterfall effect starts at the very top of the corporation and cascades down to all levels of the organization - from corporation to business units, from business units to departments, and from departments to employees. For example, if the company goal is to increase sales, the division goal becomes an increased customer base, the sales department sets goals for a specific number of new customers in each area, and the sales rep identifies specific prospects to convert to customers.
As the strategic cascade reaches the employees, the objectives are incorporated into their annual performance targets. This ensures both focus and alignment as the employees deliver on their daily objectives. Results are rolled back up in periodic reviews of goals at all levels in the organization.
Implementing strategic alignment requires strong commitment from the top leadership and a focus on relentless communication at every opportunity, using simple management principles of focus, clarity and reinforcement.
Vision and effective execution of strategic alignment are a leader’s top priorities to ensure that goals are met and success achieved.