Aligned teams win
At the 2000 Sydney Olympics, the British rowing team unexpectedly won the Men’s Eight Rowing gold medal. Apparently it did so by obsessively asking one simple question over and over again: “Will it make the boat go faster?” They asked this question when choosing the next meal, choosing what to drink, how much time to sleep and so on.
Alignment is a powerful concept when it comes to combating inertia. Teams that are not aligned focus on hitting on the minimum target and then spend the rest of their time in non-value added activities.
It should be of no surprise that the best companies have their purpose, strategy and organizational capabilities in sync. Aligned teams make decisions and actions such that they support the achievement of strategic goals.
In order to understand how it can be measured and optimized, we propose a simple framework that looks at the qualitative and quantitative elements of alignment.
Qualitative component of alignment
We propose a framework to measure the qualitative aspect of alignment based on three key pillars: purpose, strategy and organizational capabilities. Our work and research has shown that these are the foundational elements of any organization. Each pillar needs to be deeply understood and internalized by leaders of the organization. The roots of misalignment can be traced to an uneven understanding and linkage between each pillar.
Let’s break down each one in turn.
Purpose | Why do we do what we do
What is the enduring purpose of your enterprise? Why would it matter if you went out of business tomorrow, and who would care?
Is your purpose clear enough that your investors, employees, partners, and customers could articulate it?
Strategy | How are we trying to win in order fulfill our purpose
Strategy involves choices about what products and services to offer, which markets to serve, and how the company should best set itself apart from rivals for competitive advantage.
What are your offerings to customers, in the form of products and services, and are they consistent with your purpose? What’s missing? What do you do or offer that you shouldn’t?
Who are your customers, and what are they demanding of the products and services you offer, now and in the future?
Who are your competitors, and what are they capable of offering that you aren’t? How do you need to be different to compete and win?
Organizational capabilities | How well does our organizational capabilities support the strategy
If your organization is incapable of delivering its strategy, the strategy is effectively worthless and your company’s purpose will go unfulfilled.
Organization,” as we’re using it here, includes all of the required capabilities, resources (including human), and management systems necessary to implement your strategy.
To maintain strategic alignment, a company’s people, culture, structure and processes have to be adaptable and change as the strategy itself shifts.
In terms of measurement, the simplest form is to survey the leadership team and key stakeholders. A quarterly survey will help the CEO and board understand the level of alignment and adjust accordingly. Another novel way is to track alignment during execution, this can be done via software platforms.
Quantitative component of alignment
Alignment needs to be measured constantly in order to identify gaps and address the situation.
Here’s an example of an output of such a measurement:
Here are a few key metrics to look at:
- Is your team capable of liberating time to focus on strategic initiatives? Measure your team’s completed vs. committed ratio on strategic initiatives. If the score is too low, your team is too focused on operations.
- Are you focusing on the right priorities? In other words, is your team prioritizing the right items inline with your strategic plan?
- Are you focusing on the right Epics (Strategic objectives)?
Implications for leaders
With this research, we hope to prevent two cases that may arise. Teams that have the best of intentions but are incapable of executing due to lack of capabilities or teams that are executing towards the wrong objective – aka called boldly going nowhere.
Best of intentions, but incapable: Companies that score highly on purpose and strategy alignment scale, but low on strategy and organization capabilities, are more or less incapable of implementing their strategy as intended. The performance penalty manifests itself with poor customer attraction and retention, higher-than-expected costs, organizational dysfunction, or simply financial underperformance.
Boldly going nowhere: Businesses that have strong alignment between their strategy and organization, but weak alignment between strategy and purpose are classed as “boldly going nowhere.” In our experience, there are many capable businesses with great people that lack a coherent, overarching purpose that guides shifts in strategy. The result is a company that becomes less and less capable over time as customers move on and talented employees depart for greener pastures.
By having the strategy aligned to the purpose and the capabilities aligned to the strategy, companies stand the very best chance of winning in their competitive field. Alignment manifests itself in more than just superior financial performance. It also leads to a more positive work climate, above-average staff engagement, a strong commitment to values and few(er) energy-sapping turf wars and in-fighting. No matter what the type of business, people value being part of a company that is winning.
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