When John Lingle and I, a decade ago, wrote our book Bullseye: Hitting Your Strategic Targets, we were addressing an age-old, but growing concern—Alignment. Today, CEOs continue to lament “How can I align the organization behind our vision and strategy?” Managers struggle to find ways of aligning effort across functional silos. Leaders want their teams aligned with department goals. Teams want individuals aligned with team goals. Individuals want rewards aligned with their performance.
It is clear that there are many types of alignment out there, but most alignment issues fall into two buckets—vertical alignment challenges and horizontal alignment challenges. The former is captured in the line of sight from the vision and mission to executives, managers, employees, and even customers. Horizontal alignment refers to how synchronously internal functions mesh together. How well a factory or service worker understands the vision of the organization is vertical alignment. How well departments play together is horizontal alignment.
Why all the fuss? And why do we always seem to have misalignments?
The fuss is a legitimate one in that it is impossible to survive in today’s marketplace without pinpoint execution of a good strategy. The market is fast moving and execution is king, assuming you know where you want to head. What has been surprising to us at the Metrus Institute over the years is the level of misalignment even within the C-suite itself. In previous polls we have done with managers, nearly one-third of VP’s reported that members of top management in their firms were not on the same page. Wow! Think about that for a minute. If they aren’t on the same page, how can anyone else be?
If you are interested in alignment, the first organizational check has to be whether the top of the house has coalesced around a clear vision, mission, goals, and most importantly, the strategy for how to achieve them. Often, top teams arrive at consensus on the vision, mission, and goals—at least at the 30,000 foot level. Alignment around the strategy is where things go awry. Strategy is often formulated at too high a level, allowing functional chieftains to march to their own drummer when taking it down to a more granular level. Strategy implementation often becomes a stylistic couture, reflecting the individual leader’s style rather than part of a coordinated whole. Let’s face it, most function heads didn’t get there by being bashful or wall flowers.
The other confounding factor is that the marketplace today is changing close to the speed of light, even on hazy days. Many organizations are headed toward black holes that will engulf their ship because they do not have the agility to rapidly change and realign themselves as customers, competitors, and their employees change. We call this alignment agility (or lack thereof), a critical capability in today’s environment. Today’s world requires that organizations develop the competency to realign constantly, while maintaining focus at the same time—a challenging paradox.
How can organizations develop alignment agility?
Successfully get aligned once. If your organization’s top management does not yet agree on the vision, mission, goals, and strategy, begin there. For example, in one organization surveyed by Metrus Group, we found that senior management gave the least favorable ratings on the question “I believe that the company’s current strategy and goals are the right ones for the company at this time.” A year later, after focusing on breaking down silos and increasing emphasis on a shared vision, results for senior management moved from the lowest in the organization to the highest.
Drill deeply to gain agreement not only on goals, but on the drivers (the critical success factors essential to achieving the vision, mission, and goals). This means agreement on priorities, resources, and timeframes. A half-day strategy mapping exercise involving the leadership team can quickly surface areas of disagreement and identify gaps to be closed.
Build tools to manage alignment. The balanced scorecard was an excellent tool created in the 90s to balance short- and long-term goals, multiple stakeholders, and leading and lagging indicators of success. Unfortunately, it was often poorly designed or under-utilized in practice. Too seldom was the scorecard, and process for managing it, adapted to today’s pace of change. Many organizations overemphasized lagging financial indicators, while missing many of the important drivers of future success such as people, culture, and processes. Another problem was that scorecards were often never fully cascaded throughout the organization. Worse yet, in three quarters of organizations we studied there was no or little accountability for achieving the scorecard targets.
Convert the scorecard and tools into a dynamic operating model. If you can learn to become aligned, then you can learn to realign continuously without it becoming overburdening. Larry Marsiello, the former president of a major financial services group, saw the scorecard not as a “thing,” but as a continuous learning process he labeled “scorecarding.” In his early foray into scorecarding, he invested time and resources to help his top fifty influencers learn how to convert an aligned vision into a working set of scorecard tools used to prioritize resources, revise structure, and change processes. He established a quarterly review and renewal process that enabled the organization to regularly make changes to the scorecard—and hence their priorities—as conditions changed. They became quite adept using this process to change the culture, speedily acculturate new acquisitions, and reduce client defections by 50%.
After a decade, it is time to stop talking about alignment and start doing something about it!