From ambitious start-ups to government agencies to mature corporations, there is a critical element that is often overlooked: organizational alignment. It’s the glue that connects leadership and employees, the organization and its customers, and strategy to the mission. An aligned organization is more agile and responsive to changes in the operating environment and is able to produce better results faster and with less effort, because employees have a clear path forward.
Many organizations spend countless hours and resources building an annual strategic plan, but often the strategy still fails to generate the intended results. According to Harvard Business Review research, most organizations (on average) deliver only 63% of the financial performance their strategies promise. Much of the remaining 37% of strategy-to-performance loss could be avoided through better organizational alignment.
So, what are the pitfalls to gaining organizational alignment?
- Inadequate or unavailable resources – An organization needs a clear vision with date-certain goals paired with a holistic strategy to drive tactical execution. Leaders must drive planning and execution downward, through business operations – while also providing adequate resources to actually execute on the strategy.
- Poorly communicated strategy – Communication is a critical, ongoing requirement to create organizational alignment. Communication must be frequent and two-way at all levels of the organization, using multiple communication channels with a variety of targeted messages. Communication mechanisms should also incorporate customer feedback loops to ensure strategic initiatives result in the desired impacts on customer experience.
- Actions required to execute not clearly defined – There are often large gaps between those that develop strategy and those that tactically execute the strategy. Leaders and managers at every level should have a clear understanding of the strategy so that operational plans and day-to-day responsibilities of front-line employees are aligned with organizational goals. Leaders within the organization should meet regularly to discuss the existing strategy, goals, and any environmental factors that may affect business operations – and should be both encouraged and expected to discuss strategic goals and expectations with employees.
- Unclear accountabilities for execution – It is all too easy for leaders to get into a room, develop a strategy, and walk out into their day-to-day responsibilities without having discussed clear accountabilities for strategy execution. Leaders must identify clear strategic initiative owners, along with expectations and key milestones for those owners in order to stay aligned keep momentum toward strategic outcomes. What is more, leaders must enroll their employees in supporting goals and milestones and clearly communicate accountabilities and responsibilities toward achieving results of the strategy at every organizational level.
- Organizational silos and culture blocking execution – When organizational vision and strategies require change, transformation, or even new forms of collaboration across departments, existing organizational silos or cultural elements can become a barrier to progress. Getting people at all levels and across departments in an organization to get aligned and buy into a new vision and strategy often requires carefully planned change management tactics. These tactics should include a deep look at organizational culture, social dynamics, governance structures, behaviors, and performance expectations that leadership want to build or promote to bring the organization into the future.
- Inadequate performance monitoring – Many organizations tend to measure performance based solely on financial results, which aren’t always of great value when predicting future performance. Additionally, organizations often focus heavily on internal factors since they are much easier to measure and control. This type of inward focus can lead to missed opportunities and threats that could have a much greater impact on performance.
Alignment issues are a natural phenomenon and occur as organizations grow, as technology advances, when new competition emerges, or as a result of any myriad of other causes that shift the operating environment. At The Clearing, we see organizational alignment as both a process and an outcome. Creating and sustaining organizational alignment requires focused action and ongoing attention. Research has found that 85% of executive leadership teams spend less than one hour per month discussing their unit’s strategy. This is one reason why nine out of ten organizations fail to execute their strategic vision.
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