Strategic Alignment Concept  

Achieving Strategic Alignment

The key to execution is that all the constituents of your business are aligned to your strategy, and are working in the same direction along with the same priorities. The constituents include monies, shareholders, people, processes and external partners.


Strategic Alignment Concept


The strategic alignment includes alignment around the financials, processes, people, external partners and shareholders. Strategic alignment does not mean that your constituents are focused only on your strategic priorities. It looks for a right balance between your key strategies and the 'keeping lights on' agenda.

In the Strategic Planning section we covered on how we establish strategic priorities and targets from long-term (strategy Blueprint) and short-term (Strategic Business Plan)perspective. As we get on to delivering to our plans, one has to have people, processes, technology, finances and other stakeholders fully aligned to the plans. Organization strategy defines certain priorities. Every aspect of the organization should orient itself to these focus areas.

Strategic alignment is achieved along the following aspects:

  • Financial Alignment: When organization's pool of monies is re-evaluated ruthlessly to ensure that more (not all) money is spent on the strategic priorities. This includes monies spent on new initiatives, existing initiatives and to run business as usual.
  • People Alignment: When the skill definition, hiring, training, rewards and incentives are aligned to the strategy.
  • Process Alignment: When the organization's business processes, quality definitions and measures are aligned to the strategy.
  • Shareholder Alignment: While the Board signs-off on the strategy, they need to be aligned to support the strategy on the ongoing basis, in-spite of not having 100% consensus.
  • Partner Alignment: Your distributors and service providers need to understand your strategy and re-orient themselves.

Imperatives of a good Strategic Alignment

Foundation is throughout the planning stage

All the above listed alignments are not achieved post planning. Through-out your planning phase, you lay down the foundation of achieving this alignment:

  • Information gathering: During external and internal information gathering, one will ideally talk and get inputs from your stakeholders like employees, suppliers and customers.
  • During developing strategy blueprint and your business goals in your strategic business plan, you will be sharing these proposed targets with your key stakeholders, who will make it happen. For example, if you plan to have lower cost, higher volume production, you may be discussing these goals with your strategic manufacturing partners.
  • Keeping share-holders in loop during your strategic planning.
  • As you finalize your business plan, you will be allocating budgets to different functions and initiatives. This will be a good stage to have the financial alignment.
  • The functional heads and their key people will be involved throughout the planning process. They will be the ambassadors to drive alignment during execution stage, as they perhaps best understand the strategy.

You cannot work only on strategic priorities

While your resources, people and technology should be aligned with your strategic priorities, but it should not be monopolized by the same. An organization has much work to do apart from strategic priorities. These include:

  • Keeping the lights on: Strategic priorities typically focus on going beyond the status quo. However, a significant piece of an organization's resources need to be deployed on running the current level of performance. For example- your IT systems, your sales networks, your order fulfillment logistics. In other words- everything which is business as usual.
  • Working on achieving hygiene items: The hygiene items are those performance benchmarks, services and product features, which enable you to survive. These are the items which do not add value to shareholders, if they are done. However, if they are not done, one will loose shareholder value. For example, having fuel efficient cars, could become a hygiene factor soon, given high cost of fuel and awareness on global warming.
  • Working on functional level WIP priorities: We do profess to have a zero based re-visit on existing initiatives and processes to see, if they support the strategy. However, one need not eliminate all the non-strategic initiatives. Some of them could be having an indirect linkage to your priorities or could be having a long-term positive impact on the function.

Communication

Communicating a strategy well is the best driver for alignment. One needs to articulate the strategy to the stakeholders in the following terms:

  • What is the strategy blue-print and how is it linked to his role?
  • What it the business plan and how is it linked to his role and goals?
  • What are his goals and what will be considered as being successful in meeting that goal?
  • What the stakeholder needs to do differently, what she needs to stop doing and what she needs to start doing to meet her goals?

An active communication, delivered in the specific context of the stakeholders, will pave the way for easier alignment. This communication needs to be delivered also after planning stage is over and during the execution phase. Any change in the strategy and priorities should also be cascaded down.

Inspiring and Encouraging

Strategic alignment, as we get stakeholders engagement, needs to be primarily achieved by leveraging the emotional quotient of people. Most of the employees at lower levels of organizational hierarchy do not want to understand the details on 'why' of the strategy (and you may not also want to share those details to all the levels). One should be able to:

  • Link the strategic priorities with the company's vision and mission.
  • Build confidence in the people that they can make it happen.
  • Make people take pride in the strategy blueprint and feel ownership towards it.

Process Based

Much of the strategic alignment can be achieved by robust management processes. Some examples are:

  • Business-case process, whereby you can include linkage to 'strategic priority' as one of the key evaluation parameters. You can also have a process, whereby all initiatives (in-spite of having an excellent cost-benefit argument), which are not linked to strategy, should be whetted by the CEO.
  • Build measures related to the strategic priorities in the business processes. For example, if customer satisfaction is a key strategic priority, one can include more questions in the customer survey, and make the customer survey more frequent.
  • You can attach greater weight to the strategy linked goals in the goal-sheets of the employees.
  • You can have your rewards and incentive calculations linked with strategic priorities.

Need not be earth shattering

Unless an organization is significantly changing its strategic direction (for example what HP did when it moved away from test and measurement equipment as their core business and got into computing), one need not make too big a noise on the alignment. One can use people and processes to drive that alignment.

It is a leader's day job

Beyond processes and communication, a leader needs to drive the alignment on day-to-day basis. A leader should:

  • Be the role-model in terms of focusing on the strategic priorities.
  • Reinforce the strategy and its link to an employee's actions and goals.