Alignment is defined as a position of agreement or alliance. Business alignment means that all elements of a business are organized and functioning at the highest level. Alignment is important to the execution of your strategy and in creating momentum in your organization. Alignment helps produce an energy within your leadership team, an energy that that can propel you from being good to being great. Just like a car when it is not aligned, things go wrong. Also like a car, it does not take much for an organization to lose their alignment. It creeps up on you without any warning and slowly takes a firm hold on the organization and becomes the new normal. In my work as an executive coach, I know that CEO’s care about alignment, but have a difficult time even knowing that alignment does not exist.
To solve the alignment puzzle and to be performing at the highest level, there are three alignment areas that you need to bring attention and focus. Resource Alignment, Strategic Alignment, and Business Alignment.
“The most empowering condition of all is when the entire organization is aligned with its mission, and people’s passions and purpose are in synch with each other.” – Bill George, Professor of Management Practice at Harvard Business School and former CEO of Medtronic.
Resource Alignment. Moving your organization from misalignment to alignment starts with resource performance. In his book Advantage, Patrick Lencioni begins with this premise; organizational health trumps everything else. We have also heard that culture eats strategy for lunch (attributed to Peter Drucker). Resource performance gauges your effectiveness of your leaders and managers, team dynamics and collaboration, and allocation of resources. Strong resource performance leads to better employee engagement, a distinct culture, enhanced team collaboration, and organizational alignment.
- More leaders less managers. A Gallup study suggests that US workers hate their bosses. The study reveals that about 50% of the 7,200 adults surveyed left a job to get away from their boss. Talk to a friend, neighbor, or a co-worker about their bosses and you will confirm this study. A manager focuses on control, positional authority, and tasks. A leader focuses on inspiring trust, developing others, and motivation. Employees want to know that their work is important and part of something bigger. Organizations need more leading, less management. A strong leader focuses on people first and metrics second.
- Annual reviews hinder not help. Can you think of a business practice that is more widely adopted than the annual review process? How on earth can a process that is so antiquated, still be thriving in most organizations. Studies suggest 95 percent of employees say they hate their company’s annual review process and 90 percent of HR heads believe annual reviews do not yield accurate information. The review process in many cases is more about the person doing the review. We suggest ongoing reviews that focus on a few core areas. This process is less about a review and more about caring about your employees at a deeper level. Employees who understand how their work impacts the overall success of an organization are more likely to take actions that align with the organizational goals.
- Culture and hidden behaviors. You and your leaders shape the culture of your organization through your behaviors. Behaviors that add to the wellness of the culture and others that break down the fabric of the organization. Behaviors that erode trust. Companies spend thousands of dollars on leadership training, but never address their own behaviors that are getting in the way of success. One of the hardest lessons we learn in life is that we cannot change other people. Organizational transformation begins with looking inward at the leadership level. What are those hidden behaviors that are getting in the way if your success. We are focused on projections and projects and spend very little time on improving our behaviors
“The way management treats associates is exactly how the associates will treat the customers.” Sam Walton
Strategic Alignment. How would you answer the question, what is your strategy? Strategic performance answers the question, what is your strategy to win. It’s interesting to hear strategy guru’s like Peter Drucker and former CEO A.G. Laffley of Proctor and Gamble say that most organizations do not have a strategy. Organizations may have a vision statement and a mission statement, but not a strategy. Studies suggest that only 7% of your employees truly understand your organization’s strategy. Leaders are often confused about the strategy as well.
- You may not have a strategy What is your strategy? One of the exercises we do with leadership teams is to poll the group anonymously and have each leader write down the strategy. Try this exercise in your own organization and you more than likely find confusion about your own strategy. You will find some believe the strategy is the mission or vision statement, some believe it is objectives and action plans that you have established for the year, and others will make a list of goals that have been identified. Strategy is not a plan or a set of tactics; those are only elements of strategy. In my work with organizations, I engage the leaders in exercises to better understand strategic alignment. I routinely see where leaders do not have a consistent answer on their own strategy. Even more revealing, they do not have a consistent answer on what strategy means in general.
- Growth as a strategy. Doing better than last year or better than your competition is not a strategy. Working with divisional leaders or product leaders I find that in many cases the strategy and focus of the team is growth. All efforts, attention, and decisions are focused on the growth target. This becomes the strategy, leading to the wrong decisions being made at the wrong time.
- Business planning is confused with strategic planning. Many organizations continue the tradition of “business planning”, but miss the mark on “strategic planning”. The so called strategic planning process has become an annual event when leaders get together to make decisions about the future. This is where leaders confuse business planning with strategic planning by reviewing accomplishments of last year, preparing a budget and forecast, and then listing out in detail the key objectives for the upcoming year. This so called strategic plan is then put on a shelf until next year. Your plan should be a “live” document. See discussion on the One Page Strategy Dashboard below. What is your framework for strategy?
One of the best books on strategy is Playing to Win, How Strategy Works by A.G. Laffley and Roger Martin. A. G. is the former CEO of Procter & Gamble, and in close partnership with strategic adviser Roger Martin, doubled P&G’s sales, quadrupled its profits, and increased its market value by more than $100 billion in just ten years. This book is about how a strong commitment to strategy, at every level, and in every part of the organization made this possible. A strong commitment to thinking about not just a corporate strategy, but a division, department, and product level strategy using a consistent framework. The ideas in the book will change your mindset on strategy. Many organization play to participate. Playing to win change you and your teams mindset towards winning. How to win with your customers and against the competition. Move your leadership team away from projects and financial goals, but on strategy. Strategy is about making choices.
“Strategy is a coordinated and integrated set of five choices: a winning aspiration, where to play, how to win, core capabilities, and management systems.” A. G. Laffley, Playing to Win
Business Alignment – Companies go out of business because they run out of cash. Companies fail because of poor leadership, bad decisions (rapid expansion, all things to all people approach, etc.), bad business/financial model, no real strategy (as discussed above), and no real focus on employees and the customer. Business alignment means that the organization is performing financially, politics are squashed, the teams are focused on the important, and a decision framework is in place.
- Communicating the important. Organizations small, big, and large have hundreds of projects that are going on at any one time. Staff meetings are dominated with project updates and status of budgets and forecasts. Leaders and managers are more focused on projects than they are on customers and on strategy. Managers lead by project objectives and financial forecasts. There is much focus on the urgent and less focus on the important. CEO’s often believe there is clear communication, but employees are generally focused on their urgent projects and their urgent financial targets. So, what is the most important? Everything cannot be important. Patrick Lencioni says leaders need to define a rallying cry. A rallying cry is defined as a single, qualitative goal that is stated unambiguously and will be the primary focus of the leadership team for a specific period of time. Defining a rallying cry will bring alignment, especially at the leadership level.
- Decision management. Decision making is a process to help leaders solve business issues and create opportunities to win in the marketplace. What is your framework for making decisions? What is your process to improve your odds of winning? In a typical approach to decision making, leaders use the consensus building approach. They gather information, identify alternatives, weigh alternatives, build consensus, and then act. Building consensus includes personal biases and insecurities that get in the way. Concessions are made that create tension and ultimately impact enthusiasm and alignment. In their book Playing to Win, authors by A.G. Laffley and Roger Martin, discuss the importance of having a decision management process. Their reverse engineering framework asks an important question; What must be true? Choices are framed, possibilities are created, and then the what must be true question is asked. This process takes away biases, consensus building, and leads to better decisions. A formalized decision management framework will take away decisions being made in the corner office, based on gut and intuition.
- Power of consistency. Most of us recognize that consistency is important in business. Leaders need to be consistent with their emotions and behaviors (as long as they are the right behaviors), the strategy needs to be consistent, consistency with our brand and our customer value, and consistency with communicating the few important and critical objectives. Consistency build trust, engagement, and consistency earns respect. To many leaders get engaged in the latest and greatest management concept or product innovation. They react to situations instead of responding in a confident professional manner. Be consistent with your message, your employees, and your customers.
I motivate players through communication, being honest with them, having them respect and appreciate your ability and your help. – Tommy Lasorda
While alignment must begin at the leadership level, if it doesn’t extend to the resource, strategic, and business elements of the organization you will continue to struggle to hold your direction and likely suffer unnecessary long-term wear and tear as a result.
Contact Chuck Gulledge to learn more about solving the business alignment puzzle.