How to Achieve Strategic Alignment?

Wednesday, 05. September 2012

Bridging the gap between strategy development and execution is one of the biggest challenges many organizations face. Studies repeatedly show that, regardless of the quality of the strategies, companies find it difficult to successfully implement them and, therefore, to realize the competitive advantages they were aiming for. Probably the most important driver for successful strategy implementation is "strategic alignment," that is the systematic process of bringing the actions of each business unit and employee into line with the organization's strategic objectives. The challenge is to make them all work together towards a common goal, thereby improving the overall performance of the company. As Akpan and Carter (2007) have aptly put it, strategic alignment is basically nothing more than "team work."

How can this kind of cooperation best be supported? Here are some of the success factors that can help you in aligning your staff with a new strategy:

  • Communication of the strategy at all levels of the organization
    Effective communication lies at the heart of strategic alignment. It pretty much goes without saying, that staff members can implement a new strategy successfully only if they are able to understand it and accept it. Ideally, a communication strategy should be developed providing regular and jargon free communication of the organization's strategy on various channels. This way employees will be constantly reminded that the organization is heading into a new direction. Communication is successful when every employee, every team, and every business unit is able to answer the following questions:

    In simple words, what is the organization's strategy?
    What actions can I take to support strategy implementation? What do I need to do different from what I have done so far?
    How will it be measured if the goals have been achieved?
    Which are my personal goals? How will my performance be measured?
    How will the achieving or exceeding of goals be rewarded?

  • Employee participation 
    People are easier to motivate and mobilize when they have the feeling that they are involved in decision making, rather than when decisions are being imposed on them. Employee participation is one of the most effective ways to create strategic alignment. Employees should be involved both in strategy development and in decisions on how to implement the strategy in practice. Giving them opportunity to share ideas and concerns based on their frontline perspectives will not only provide employees with a sense of ownership over the strategy and the implementation process but also helps to improve their quality. Crowdsourcing, for instance, is one method for staff involvement that is becoming increasingly popular.

  • Linking individual performance goals to strategy
    Another way to motivate people is by providing financial incentives. Individual performance goals should always be linked to the strategic goals of the organization. This way, employees are encouraged to constantly make a personal contribution to the achievement of corporate goals. Good and outstanding performance of teams and departments should be recognized and rewarded as well, for instance by organizing parties or group getaways.

  • Human resource management must reflect strategy
    Hiring, training, and retaining the right people is another important factor for achieving alignment within your organization. You want to make sure that your staff has the skills and capabilities required for best possible implementation of your strategy. For instance, if you follow an R&D strategy, make sure to provide appropriate resources for hiring highly qualified professionals and offering them an attractive work environment.

  • Roles should be clearly defined
    Everyone involved in strategy implementation should be aware of the decisions and actions he or she is responsible for. In small companies with a manageable number of employees, this may still be rather obvious. In global corporations with many different divisions, however, the situation looks quite different. In this case, there must be a central point of ownership for the strategy implementation as a whole and responsibilities for the various strategic initiatives must be clearly defined.

  • Free flow of information across organizational boundaries
    Silo thinking is one of the greatest stumbling blocks for strategic alignment. Free flow of information both horizontally between teams and departments and vertically from top management all the way to front line employees and vice versa is key. Holding regular meetings to report on progress made and discuss problems together can help. Also important is that information on changes in the external business environment that could affect the organization's strategy gets passed on quickly. Strategy software can help to facilitate efficient communication within the organization.

  • Monitoring progress
    Regular monitoring allows for making quick course corrections whenever problems arise. Commonly used tools for monitoring progress are Balanced Scorecard and dashboards. The latter reflect the current performance status at a glance, and, therefore, are very suitable for making quick tactical decisions.

 

Aligning business units and staff members with the organization's strategy is not a one-time deal but an ongoing process that requires constant leadership, communication, and monitoring. Moreover it requires diplomatic skills in dealing with different types of personalities. This becomes even more important when a new strategy brings disadvantages for the staff (e.g., when closing branches and laying off of employees). This requires sure instincts and good change management. Strategic alignment is not an easy task particularly in large companies. However, it is indispensible in order to walk the chose path successfully.

 


Literature

Akpan, E.O., & Carter, R. (2007). Strategic alignment: The business imperative for leading organizations. Mustang, OK: Tate Publishing.