Strategic Alignment: Making it Matter

First, a refresher. We discussed the concept of Alignment as part of the strategic planning process in our Fall 2005 Newsletter (click this link to read more about Making the Strategy Stick). In our experience, most strategic planning efforts miss the mark in connecting the overall strategy to each individual leader, and their personal goals and strategies. Or, they strive to align the leadership team through “teambuilding” exercises that are disconnected from the business. These are the strategic planning off-sites where activities to develop strategy are separated from those intended to “develop” relationships. The theory seems to be that the team will “magically” integrate the strategy and relationship work, on their own, after the planning efforts are complete. In practice, though, it rarely seems to work this way.

In our view, Strategic Alignment must occur at three separate but related levels — the individual, the leadership team, and the organization as a whole. True alignment of these components can only happen as a tightly linked part of the business vision and strategy, and goes deeper than individual performance plans, executive teambuilding sessions, or traditional OD initiatives. So while most would agree that the need for strategic alignment is fairly self-evident (and that the term has become somewhat trendy of late), what we have found less clear are the practical levers available to leaders in making it happen — or in this case, “making it matter.” In the paragraphs below, we’ve provided some of our own insights into how this can happen.

At the individual level, we have found the key lever to be the alignment of personal and business strategies. What does that mean? Consider that every executive has a “personal strategy” — a business plan, vision, strategic objectives, etc. for their own career (and for their life, for that matter). How well does the organizational strategy mesh with this personal strategy? Performance objectives, incentive plans, and the like get at the surface of this issue, but are difficult to tune so that they effectively merge the two. This is partly due to their static nature, and the difficulty in keeping them relevant with the rapidly evolving pace of today’s business. As just one example, consider the linkage of an Executive Coaching program as part of the regular strategic planning process. Many organizations have hired coaches, but very few have programmatically linked them to the strategic planning process. This combination provides executives with a real-time (and dynamic) avenue for open and frank discussion about the business strategy, and how it contributes to their own long- term objectives. Alignment is not a point-in-time; it’s an ongoing process. Doing this right is no simple task, but when properly structured, we have seen organizations create significant competitive advantage through this level of individual alignment.

Alignment within the executive team is often considered synonymous with the concept of high performing teams. From our standpoint, these are teams with a shared purpose and values, a strong strategic focus, aggressive objectives, meaningful measures of success, and high-quality communications. Much has been written on this topic, and we won’t repeat all of it here. But think about the time that your leadership team spends in active pursuit of increased alignment. And not just at the “we’re on the same page” level, but true alignment to the critical, complex, and often contentious core strategic issues facing the group. Ask yourself these questions: How often does the entire team actually meet? How often do they meet with a third party in the room, who can drive the group to have conversations and deal with issues that wouldn’t get raised otherwise? And, how often do you leave leadership team meetings knowing that an important topic, just under the surface, did not get addressed? As models mature for measuring and benchmarking the performance of teams, these kinds of questions also become more relevant for leaders that want to make alignment matter.

For the organization as a whole, increased alignment often means addressing culture and human systems. We believe that a critical component of leadership is the ability to adapt and develop the organization’s culture in support of the business strategy. Great leaders don’t just influence the culture; they leverage the strength of their personality, beliefs, and value system to shape the culture towards the strategy. Today, in fact, a wide range of studies, tools, and methodologies exist to link specific leadership competencies with culture and strategy, so that leaders can understand how best to make these cultural transformations happen. If you don’t know exactly how (or whether) your leadership culture supports the business strategy, and where strengths can be leveraged (and gaps filled) to accelerate performance, we would recommend taking a closer look. There are enormous opportunities to be realized when alignment happens on this scale.

Summary
Without question, we believe that Strategic Alignment can be a true and lasting source of competitive advantage for the business. In part, this is because so few firms really have it. The ability to accelerate execution of the strategy, quickly shift directions to take advantage of new market dynamics, and retain key talent are just a few measurable outcomes for organizations with strong strategic alignment. In this context, “Making It Matter” means that people see this as tightly tied to critical business outcomes — in other words, that the organization needs this kind of alignment to achieve the most fundamental aspects of the strategy.

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