The word “strategy” is widely overused in business today. And while 85 percent of businesses know their intended strategy, only 10 percent of them successfully execute it. Why? Because many managers embark on their business planning process without fully understanding the business as a whole. Or how to integrate their strategy at every step of the process. Put it differently, many managers are not aware of what strategic alignment means.
What is Strategic Alignment
“Strategic Alignment” means that the project goals and objectives align directly with the larger business goals and objectives of the organization. In other words, it means linking a company’s business environment and strategy with its resources and structure. It refers to a state where an organization’s strategies align internally and externally, with its users, marketplace, and customers (Kaplan & Norton, 2006).
But before you immerse yourself in the strategic business planning, creating an action plan, communicating everything to your teams, employees, management and customers. First, you need to understand your business’ mission, vision, values, strategy and goals. Answering something as simple as: “Why did you create your business in the first place?” Or “What was your goal? Or what do you want to achieve?” Will give you valuable insight to strategically align your business.
Many businesses get lost when they grow or expand to other markets. They forget joint objectives and focus only on individual issues that confuse customers. It’s true that you have to adapt to the market, in order to grow or reach more customers, but remember: your business identity is what makes you a brand.
Benefits of Using Strategic Alignment
1. Time Saving
A growing company without strategic alignment could result in employees in different departments spending hours working on projects and creating objectives that leave little to no impact for the greater good of the company. Or managers embarking on activities that are simply not right at the moment. Wasting time on things that are not going to give you results is something that you cannot afford even in business as in real life. Ensure that your business strategies align with your company’s goals and objectives, first.
2. Team Motivation
When your team understands the big picture, it becomes a natural motivation factor. Therefore, strategic alignment helps keep teams motivated by making your strategy clear to them and showing them how it ties to the big picture. It helps eliminate conflicting priorities, so everyone can be on the same page.
3. Helps with Market Maneuverability
We have to find ways to maneuver and stay ahead of the competition. However, to keep up with the various trends, you must be careful to not lose business identity. An aligned strategy helps businesses to focus and maintain the balance between following trends and keeping true to their identity.
Where Things Could Go Wrong
As Akpan and Carter (2007) said: strategic alignment is basically nothing more than “team work.”
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Communication of the strategy at all levels of the organization is a must
Effective communication is the heart of strategic alignment. Ideally, a communication strategy should be developed providing regular and free communication of the organization’s strategy on various channels. Communication is successful when every employee, every team, and every business unit knows what the company’s is trying to achieve and how can their actions help.
- 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. Giving them the opportunity to share ideas and concerns based on their frontline perspectives.
- 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.
- Free flow of information across organizational boundaries
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 and discuss problems together can help.
- Monitoring progress
Regular monitoring allows you to correct the course whenever problems arise. Commonly used tools for monitoring progress are Balanced Scorecard and dashboards.
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.
Strategic alignment is not an easy task in large companies. However, it is essential in order to walk the path successfully.
Don’t Leave Your Strategy to Chance
Leaders, nowadays, are looking to gain the maximum value from their business strategy and bridge the gap between strategy and execution in their organizations. One way to do it is using an innovative approach, like technology. Modern technology has the power to translate a paper-based business strategy into a digital, executable format. Another way is training from external experts. At BGH, we can help you build ownership around the strategy’s vision, cascade the strategy throughout your whole organization, develop strategic agility and explore new technologies fit for your business.
Don’t leave your strategy to chance! For organizations in all industries today, strategic alignment has never been more essential or more challenging to achieve. There’s no time to waste. Contact us for more information.