How Does Your Company Align
By Robin Wright
There is no universal or one-size-fits-all prescription for a winning business. But corporate leaders today seem to agree that strategic alignment is high on the list.
Strategic alignment means that all elements of a business — including the market strategy and the way the company itself is organized — are arranged in such a way as to best support the fulfillment of its long-term purpose. While a company’s purpose generally doesn’t change, strategies and organizational structures do, making chasing “alignment” between strategy and the organization feel like chasing an elusive will-o’-the-wisp.
As if that weren’t tough enough, another challenge for corporate leaders is how to make sense of strategic alignment at both the team/business unit level (or division or department, however it is classified) and at the enterprise level.
And yet it is possible. For example, as it grew, Facebook found that its early “move fast and break things” culture had to be funneled into focused technical teams and product groups to make its product development process faster and less erratic, and for it to have a chance of meeting the demands of its new public shareholders following its IPO. The current mantra is “Move fast with stable infrastructure”, which speaks to the organizational design challenge of operating at scale in a fickle and volatile world.
There is a simple test you can perform to start an honest conversation about strategy and organizational effectiveness where you work. Think of your company in its entirety, or perhaps select a strategically important element of it, such as a growth area upon which future success depends or its primary source of income, and consider the following two questions:
- How well does your business strategy support the fulfillment of your company’s purpose? Purpose is what the business is trying to achieve. Strategy is how the business will achieve it. Purpose is enduring – it is the north star towards which the company should point. Strategy involves choices about what products and services to offer, which markets to serve, and how the company should best set itself apart from rivals for competitive advantage. Think of your own business and ask yourself, using a scale of 1 – 100, How well does our strategy support the fulfillment of our purpose? (If you are unclear on your company’s strategic priorities or purpose, then the likelihood is that it does not.)
- How well does your organization support the achievement of your business strategy? “Organization,” includes all the required capabilities, resources (including human), and management systems necessary to implement your strategy. For instance, if your company seeks to beat competitors through superior customer service, is this reflected in the day-to-day behavior of staff and their interactions with customers? If innovation is a key strategic priority, does your organizational structure enable creative collaboration, risk-taking, and knowledge-sharing? To maintain strategic alignment, a company’s people, culture, structure, and processes must flex and change as the strategy itself shifts. The symptoms of poor alignment are often obvious, especially to those who work in the company, but also to customers who do not experience the service they expect from a company’s branding and advertising. Using the same 1 – 100 scale ask yourself: How well does our organization support the achievement of our strategy? If your organization is incapable of delivering its strategy, the strategy is effectively worthless, and your company’s purpose will go more or less unfulfilled.
The very best chance of winning: Alignment manifests itself in more than just superior financial performance. It also leads to a more positive work climate, above-average staff engagement, a strong commitment to values, and few(er) energy-sapping turf wars and in-fighting. There is a buzz, no matter the type of business because people value being part of a company that is winning.
