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Strategy Alignment Experience

by Sep 29, 2020Co-creation, SDG Strategy0 comments

Where is your organisation heading to, and are your people bringing it there?

Every so often, the leaders of an organization build new strategies. They aim to guide and develop its activities, seize new opportunities and manage potential risks. On the road to success, the strategy is a map that gives directions to all departments and their respective employees. It helps to reach their common destination together.
But is it enough to have one? When people in the company do not put it into practice, even the best-formulated strategy becomes worthless. Therefore, strategy alignment is very important.

“The strategy is a map giving directions to the whole organization. Without it, we’re all lost.” says Mia Negru, Co-founder of 2030 Builders

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Every company must work on an aligned strategy.

Why is strategy alignment a problem for so many organisations?

In 2016, a study showed that 67% of these thoroughly prepared strategies are not implemented properly. Therefore, fail in reaching their objectives. Up to 95% of an organization’s workforce can be entirely disconnected from its strategy, neither understanding it nor knowing about it at all (Kaplan and Norton, 2005). The thought of such a large portion of employees investing their energy without knowing about their goal is dizzying. And unsurprisingly, this keeps companies from reaching their objectives and therefore weakens their financial results

For Lauren Hrebiniak, from the University of Pennsylvania, the problem with failed translation from strategy formulation to implementation lies in the lack of concrete planning between the two.

“it should not be a question of developing a strategy and hoping it works, but of developing a strategy and following a logical plan to reach it”. According to Lauren Hrebiniak, Professor Emeritus, The Wharton School of the University of Pennsylvania, quoted in “Why good strategies fail, Lessons for the C-suite” report, By The Economist’s Intelligence Unit, 2013, p.5

A lack of key resources and management skills

Several factors can make following a plan more difficult for an organization. One of them is the lack of resources and time dedicated to cascading the strategy to the employees and working on their engagement. Another is that companies fall short of employees with sufficient management skills. In result, not many employees help align the rest of the workforce on the strategy and lead its implementation successfully.

Middle and lower-level managers are particularly important in that regard. According to Ateş et al., they are the ones working closely with the employees. They must convey the strategy from the top management to their teams, ensuring their understanding and commitment. In that way, they play a key role in translating the strategy to the context of daily operations, communicating the strategy to the team and coordinating their efforts in that way.

“These managers are critical in resolving resistance or complacency in their teams and in ensuring team strategic commitment.”. From Ateş et al., 2018, “The Dark Side of Visionary Leadership in Strategy Implementation: Strategic Alignment, Strategic Consensus, and Commitment”, In Journal of Management Vol. 46 No. 5, May 2020, p.639

Differences in interpreting the strategy

However, a frequent issue is that these managers view the strategy and its implications differently. Essentially, because they are closer to and directly involved with a team’s daily operations, they might interpret the strategy in their own way. Consequently, they communicate it to team members in a manner that aligns more with their and the team’s interests than with those of top management.

Transparency is therefore a requirement for strategic alignment. It ensures the information is communicated in the same way to all employees can help avoid costly misalignment. Then, with middle and low-level managers holding the right leadership skills, the strategy can become a factor of motivation for these employees: by connecting their tasks to the company’s objective, they see the importance of their role. Seeing that their work matters to the bigger picture helps employees remain motivated and engaged to reach the organization’s target. 

From strategy to operations

Correctly translating the strategy into corporate operations is key to alignment for 77% of successful companies. Assessing and reorganising resources to best fit its strategy keeps a company from spending unnecessary time and money. Together with avoiding having to make employees or divisions redundant, going through this process helps attributing the right resources to each project. It encourages teams and people to work in an agile, adaptable way, using the right energy in the right sectors.

In addition to this reorganisation, setting clear tasks and KPIs for teams and departments is important, not only for them to remain motivated, but also to ensure their work contributes to achieving the targets delimited in the strategy. By structuring their activities and workforce around the new strategy and by monitoring progress daily, these businesses give their workforce the means to achieve their objectives.

Organizational Strategy Alignment
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The general strategy is only effective as long as all employees and procedures are aligned with the strategy. The outer arrow represents the general strategy while the inner arrows represent the inconsistencies of employees and procedures with the strategy alignment.

Strategic alignment and employee engagement

Finally, strategic alignment can help give a voice to every employee, so that they can take part in shaping the organization they work for. At 2030 Builders, we believe that employees are the changemakers in every company, and we want to hear what they have to say. As such, in our Strategy Alignment module, we adopted a two-way communication set-up. We help top-level managers clearly communicate the corporate strategy while giving employees the space to share their views and departments’ insights with their superiors. Being heard and respected makes employees engaged, and motivates them to go to work every day.

You cannot win a battle with only five people

When it comes to successfully implementing a sustainability strategy, if all the above applies, engaging the whole workforce is exceptionally important.  According to KPMG’s CEO 2019 outlook study, as many as 98% of sustainability programs fail. If other factors such as the lack of a business case and robust processes come into play, the importance of putting sustainability on the agenda for all employees is crucial. Many organizations’ sustainability initiatives are solely based on the work of their CSR manager or department. Therefore, they fail to properly deploy because they are prioritized and do not involve each and every employee in the process.

You cannot win a battle with only five people, companies need to involve everyone in the sustainability quest! says Mia Negru, Co-founder of 2030 Builders

References

https://journals.sagepub.com/doi/pdf/10.1177/0149206318811567

https://www.billgosling.com/blog/what-is-strategic-alignment-how-can-your-business-benefit-from-it

https://disruptorleague.com/2020/01/07/strategic-and-systemic-alignment-why-they-really-matter/

https://lsaglobal.com/blog/why-strategic-alignment-is-important/

https://cmoe.com/need-for-strategic-alignment/

http://www.trissaconsulting.com/articles/strategy-execution-statistics-6-steps-to-successful-strategy-execution

https://hbr.org/2017/11/executives-fail-to-execute-strategy-because-theyre-too-internally-focused

https://www.pmi.org/-/media/pmi/documents/public/pdf/learning/thought-leadership/why-good-strategies-fail-report.pdf

https://pubmed.ncbi.nlm.nih.gov/16250626/

https://cmoe.com/need-for-strategic-alignment/

https://www.shr

m.org/resourcesandtools/tools-and-samples/toolkits/pages/sustainingemployeeengagement.aspx

Strategic Alignment: Why is Essential for your Business

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