Companies don't usually lack goals, objectives or strategies. Getting an entire organization aligned around a strategy and executing effectively is another matter entirely.
"Good business leaders create a vision," celebrated CEO Jack Welch once said, but he didn't stop there. He continued, "[They] articulate the vision, passionately own the vision and relentlessly drive it to completion."
Business leaders might conjure up a vision by putting goals and objectives on a slideshow, the equivalent of putting an 'x' on a map and drawing a dotted line to it. But alignment is far more difficult; it's the exhausting work of getting every member of your party walking in the same direction and making the right contributions at the right times to reach that destination.
Shockingly, alignment is a competency that few companies master. Research shows that nine out of ten companies fail to execute their strategic vision and that 95 percent of employees, on average, are unaware of or do not understand their company's strategy. To say that alignment is rare is an understatement. Indeed, it is a defining element of successful companies.
To understand the real power of alignment, however, you might start by considering what's at stake.
When Alignment Lacks
Study after study confirms that alignment is an essential ingredient in reaching goals. No big surprise here, but the stats still leave an impression. In organizations that combine excellence in tactical project implementation with alignment to strategy, teams knock out projects successfully 90 percent of the time. Those that neglect strategic alignment are successful only 34 percent of the time.
In other words, when alignment is not a primary focus in companies or teams, about two thirds of projects--including the resources invested in those projects--are wasted. Of course, this does not include the inherent opportunity costs of pursuing misaligned projects. With so much at stake, you have to wonder why misalignment persists, even in the world's most notable companies.
Know Visibility, Know Alignment
Teams and departments struggle to find visibility with other teams and departments. This lack of visibility makes it nearly impossible for business leaders to get their arms around the work and projects that are being undertaken and prioritized. This makes it more difficult to determine how well aligned they are to company strategy. Simply put, alignment is rare because visibility into the actual work being done across teams and departments is lacking. On the other hand, increased visibility across teams and departments makes greater alignment possible.
A recent SAP whitepaper proclaimed, "Companies empowered by increased visibility can align business strategies with execution, so managers can continuously plan and monitor strategic, operational, and tactical goals."
The Rewards of Alignment
Companies that have invested in visibility and the alignment that springs from it enjoy a level of nimbleness, efficiency and morale that other companies can only dream of. These companies are actually better at capitalizing on opportunities. For instance, a 2013 Marketo study concluded that companies with alignment between Marketing and Sales were 67 percent better at closing deals and made 209 percent more revenue from Marketing.
Organizations aligned around strategy are, by nature, better at optimizing how they use their resources. Instead of departments pulling resources in opposite directions, resources are deployed on projects that will contribute to the same strategic objectives, deriving maximum value and efficiency from their finite headcount.
Finally, strategically aligned companies are just better places to work. Surveys consistently demonstrate that companies with better alignment also display higher employee engagement, lower absenteeism and higher levels of ownership. This may be the most powerful point of leverage for leaders. Employees become energized when they know that their efforts are contributing to the company's success and moving the vision forward. Discretionary effort follows.
How Your Company Can Get Aligned
Easier said than done, some managers might say, but a few best practices can bring alignment within reach. For instance, companies with excellent alignment tend to take the time to map out their key strategies. They then clarify these strategies with their entire workforce again and again. Finally, they make strict use of alignment scorecards to make sure all projects undertaken contribute to company strategy.
Another common best practice among well-aligned companies is a near-obsessive fixation with reporting. Significant resources are invested in gathering work data consistently from every team and then, in as close to real time as possible, broadcasting the resulting aggregate data back out to the organization.
When it comes to alignment, those companies that make the effort to ensure that everyone is focused on the activities that will move the strategy forward and provide the needed visibility will be rewarded in spades. Those that don't will find themselves frustrated at every turn.