Business Strategy Alignment

Creating and measuring growth is key to business success.  But growth requires strategy, and business strategy alignment ensures your strategy is understood and communicated inside your company.

MLA provides strategic planning and execution, ensuring business strategy alignment.  We provide Finance, Strategy, and Solutions through our fractional CFOs and Strategic Advisors.  These services are available through our offices in Dayton Ohio, Cincinnati Ohio, and Virginia Beach, Virginia.

According to Forbes.com:

• 65% of organizations have an agreed-upon strategy.
• 14% of employees understand the organization’s strategy.
• Less than 10% of all organizations successfully execute the strategy.

Every business leader should be concerned about business strategy, but it is natural to wonder if it is worth the effort. Actually, it’s worth your best effort, and here’s an approach that will allow you to beat the odds and maximize your returns.

There is an often-missing component that, if consistently applied, will dramatically enhance the progression of strategy creation, communication, and execution. That critical element is business strategy alignment.

Let’s apply this concept to each step of the strategy process, to help you profitably grow your business.

Step 1—Alignment and strategy creation.

Some companies rely solely upon their internal mission, vision and values when establishing a strategy. “We are who we are!” they declare, “and if customers don’t like it, too bad!”  Other businesses try to accommodate every whim of each potential customer, too often at the expense of organizational identity. Both examples are from opposite ends of a strategic continuum, and neither makes much sense.

A sustainable business balance can only be realized through the pursuit of alignment. At this beginning stage of your strategic quest two questions become extremely important:

What will your customers buy; and, what are you producing?

If these two factors are aligned, strategy communication and implementation will have a viable foundation. Oddly, many strategy teams fail to ask these two fundamental questions, and thus end up neglecting obvious and devastating misalignments.

If misalignments become apparent, you would be negligent in moving forward without making needed adjustments. The objective is to remain true to your core while at the same time making reasonable attempts to satisfy the demands of your target market. You may need to modify one or the other (or both) to achieve the alignment that translates into more paying customers.

Step 2—Alignment and strategy communication.

This is where things start to get complicated, as the statistics at the top of the page suggest. Assuming you have created a sound strategy based on the union of customer desires and company output, you now face the challenge of inserting employees into the mix—in a way that aligns their daily decisions and actions with the strategic direction of the company.

Success rates drop by around 50 percentage points in this phase for a multitude of reasons:

• The message from the top of the org chart can mutate as it cascades down through various layers of management, losing coherence at each level.
• Employees sometimes can’t see what’s in it for them, especially when management fails to connect desired behaviors with meaningful recognition and rewards.
• The workforce may be unaware of the factors that can create misalignments, even as they unconsciously participate in generating them.
• Very few people left on their own, can figure out how their individual job descriptions relate to the overall strategy.

At times the largest challenge is presented by a plan that is too complicated to be easily understood by all. In this case, simplification can be painful for, and resisted by, the executive team due to the fact that their understanding of the plan’s nuances and complexities is crystal clear (and therefore, everyone else in the company should also be able to “get it”).

Step 3—Alignment and strategy execution.

This is the only step of the process that can produce desired business outcomes.

Steps 1 and 2 are merely the means to this end. If you stop short of accomplishing this step you will not only fail to move forward strategically, you will also crush the expectations raised in the previous steps. This is why most organizations end up damaging important cultural components such as trust and employee engagement.

At the end of the day, this step is just hard because the magnitude of change and innovation required to bridge the knowing/doing gap is so enormous. To increase your chances of success, you will need to help your workforce support the following alignment behaviors:

• Make tough choices and difficult trade-offs that will deploy finite resources toward new behaviors, processes, and practices (and away from older, less strategic areas).
• Innovate in ways that are responsive to the market you seek to serve. This customer-centricity is at the heart of alignment, and must become the focus of this change effort.
• Reduce operating costs while increasing sales. This will assure sustainability.
• Recognize and reward those who adopt new behaviors and decision-making approaches based on transcendent priorities.
• Differentiate your company’s offerings from that of the competition, thereby becoming more attractive to prospects while making competitors less so.