When I interview CEOs and other C-Suite executives, one of the first words out of their mouths is “alignment.” It continues to amaze me how important and frequently-mentioned alignment is, but how seldom senior leaders agree on what it means and how aligned their organizations are. Even more amazing is that very few organizations have a good way to measure it.
The most frequent definitions of alignment offered by execs include: “Is everyone lined up behind the CEO?” or perhaps behind the vision, mission, and goals. Others have offered “Is everyone rowing in the same direction?”, particularly important if you are heading to one port. John Lingle, one of my colleagues, has proffered an update of that definition which most leaders immediately gravitate to: “Are we all rowing synchronously in the same direction?” Synchronicity is the major challenge, requiring the coordination of functional silos that all have different priorities at any given instant, despite vowing that they are committed to the overall organizational goals. The work of the Metrus Institute on alignment discussed in Bullseye! Hitting Your Strategic Targets through High-Impact Measurement distinguishes between vertical alignment—everyone having a clear line of sight to the strategy and goals—and horizontal alignment—having interdependent functions and departments synchronously working together.
While alignment seems to be desired, does it make a difference? Alignment is a crucial factor in organizational performance, leading to faster strategy execution because of greater focus, higher financial and operating performance, and less conflict and friction, thereby conserving resources. For example, work done at Jack in the Box, a quick-serve restaurant group, has demonstrated that alignment is a key contributor to productivity, operating performance, sales, and margins at restaurants. When people and processes are misaligned, resources are squandered, work is harder, and the risk of burnout is higher.
The fact that most organizations don’t know how well they are aligned leads us back to the measurement discussion. Few have good measures of alignment—most simply don’t know whether they are rowing synchronously or not. At best, they get a glimpse of whether the oars are broken when they notice customers defecting, employee turnover going up, or goals being missed. This is akin to the way many people diagnose their health—only after it has lapsed! When they have a headache or a temperature, they often take aspirin and hope it will go away. When it doesn’t, panic sets in and they trot off to the doctor to discover what it might be. Is it an allergy or a tumor? Sometimes a skilled doctor can tell you right away, but at other times you need to do additional tests to discover if something more insidious is at the root.
The problem is that most organizations don’t have a doctor to run off to or good diagnostics to identify the root causes or to provide leading indicators of malfunctioning. In the 90s, my colleagues and I did many audits that could get beneath the organizational covers to see where alignment was an issue. The problem was that they were expensive to do and only were undertaken when the organizational ship was listing, or worse yet, sinking. In the last five years, we have found an easier and faster way to uncover many of the same root issues by using surveys coupled with interviews and a modest review of processes. These quick assessments uncover some of the insidiously hard-to-see problems—units that are working hard but not smart, silos that are inhibiting progress, interdepartmental conflict, rewards that incentivize A when you need B to be done, and lack of alignment of goals and measures.
Our experience is that too often alignment is assumed because of the way organizational planning is done. Most organizations set their corporate goals at the top and then expect (perhaps hope) that everyone will connect goals, effort, and resources accordingly. The reality is that budgets are the only ‘official’ connector for many. And sadly, budgets are built on many assumptions that often change during the course of the fiscal year. Units can be budget-connected and still not work together synchronously. Individuals can put their best efforts forward, but it may be towards outcomes they prefer to do rather than what might be the highest priority for the organization.
Regardless of the method you use today, it is important to investigate beneath the covers to find out where and how alignment can be increased, leading to more efficient and effective performance.
Bill Schiemann is a thought leader in the human resources field, having published scores of articles and six books on strategy, measurement and human capital management. He has worked with hundreds of companies during his leadership of Metrus Group and founded the Metrus Institute, an organization with a mission to promote learning, knowledge sharing and research on talent management best practices. Among Bill’s accomplishments is his pioneering work creating the People Equity (ACE) talent optimization framework, as well as making many contributions to current thinking about strategic performance metrics and scorecards.