The goal of strategic alignment is to mobilize an organization to successfully implement business strategy. Mobilizing the organization means mobilizing people. A clear and aligned workforce at every level and from every part of the organization harnesses both the skills of every individual and the collective intelligence of the organization. When people are aligned there is a palpable sense of momentum and the focus needed to address the range of challenges that strategy implementation requires.
Great strategies make great organizations. But without careful attention to aligning people and strategy, the strategy is just words, a set of intentions. While clarity about the collective purpose and the tactics required begins at the top, people at all levels, functions and locations need to understand the strategy and embrace their role in its implementation. That’s the connection to culture, a shared understanding of what the organization is doing.
What is required to align strategy and people? It requires Creation, Communication, Clarification and Reinforcement
Creation of the strategy is the first step. Organizations may take differing approaches regarding the time frame of their strategies, usually looking at least one year into the future and more often thinking in terms of multi-year priorities. A clear strategy articulates how the organization can build a strong connection between the positioning of the firm and its offerings in the marketplace. It defines the systems, structures and required resources needed to execute against that strategy.
Communication of the strategy requires the cascading of the plan throughout the various levels, functions and locations of the organization. Employees need to know what is important and why it’s important. Clear and consistent messaging is important in this stage.
Clarification of the strategy is a critical and often overlooked step in the process. This is where dialog, two-way discussion about the strategy, helps employees gain buy-in and to make connections between their work and how that work supports the strategy. The intent is to shift from understanding the strategy to owning the strategy. Goals are developed throughout the entire organization, creating the link between near-term and longer-term priorities.
Reinforcement of the strategy is accomplished through a combination of decisions, actions and messages. Budget and investment decisions reinforce how resources will be allocated in support of the strategy. Actions taken (and not taken) by leaders throughout the organization reinforce what is important and what is of less importance. Linking the strategy to decisions made and the actions taken moves the strategy from a set of intentions to something tangible.
In working through these steps you begin to create alignment between an organization’s culture and its business strategy and develop answers to some key questions such as:
- Is there a disconnect between those who design strategy and those who are expected to carry it out?
- To what degree do employees believe the strategy is aligned to the needs of the marketplace?
- Are employees, teams and business units coordinating their efforts to maximize organizational impact?
- Do subcultures exist that might be barriers to execution?
- Are employees confident that they (and their colleagues) have the necessary skills and capabilities needed to execute?
- Is there change readiness and a desire to continually stretch the organization?
We’ve seen this alignment of culture and strategy have significant impact on performance. One client example is a global reinsurance company. In one division alone, creating stronger alignment helped business performance to change dramatically over a two-year period in key measures of performance: Premium revenues rose by over 50% accompanied by strong gains in profit results with a marked decrease in expenses.
While the metrics of success of a business strategy will vary from organization to organization, mobilizing your people is critical to successful implementation of your business strategy and the overall strategic alignment of your organization. If you need a team that can support you with a proven, systematic approach to achieve that, please be in touch.