How Organizational Alignment Creates Growth

Organizational Alignment Creates Growth Curve

What Does It Take To Create And Sustain High Growth?
Organizational alignment creates growth – the alignment of strategy, culture and talent…just like the three cartoon characters above pulling together to keep that arrow pointing onward and upward.

Organizational Alignment Creates Growth
While most businesses strive for profitable growth, aligning all the critical factors to achieve consistent and highly profitable growth is not easy.  But organizational alignment is worth it.  Based on organizational alignment research of 410 companies across eight industries, highly aligned companies:

  • Grow 58% faster
  • Are 72% more profitable
  • Significantly outperform their unaligned peers in terms of customer loyalty, employee engagement, and leadership effectiveness.

Strategy Perspective – How Organizational Alignment Creates Growth
First let’s talk corporate strategy. Strategy accounts for 31% of the difference between high and low growth companies.  An effective business strategy provides direction, focus, purpose, and inspiration.  It defines where to play and outlines the critical few collective actions required to win by answering 7 key strategy questions:

  1. How will you grow quickly and profitably?
  2. How are you defining success and failure?
  3. What is your organization’s core purpose and direction? Is it inspiring?
  4. Is your strategy well understood by your employees?
  5. Do they believe that it will set them and the company up to succeed?
  6. Is your ideal target customer clearly defined and agreed to by all key stakeholders?
  7. Are your offerings unmistakably differentiated from the competition?

Culture Perspective – How Organizational Alignment Creates Growth
Once your business strategy is clear enough to act, you need to think about what kind of corporate culture you need to create to best execute your strategy.

The Definition of Corporate Culture
We define culture as how things truly get done in an organization. It can be measured by understanding the way people think, behave and work. Organizational cultures exist by design or by default. And, regardless of their origin, some strong cultures help companies perform (e.g. Southwest Airlines) and some strong cultures hurt performance (e.g. VW, Wells Fargo, Uber).

Culture Accounts for 40% of the Difference
One thing is certain-as a leader, if you do not understand, shape and align your culture and strategy, you will not perform at your peak. Our organizational alignment research found that cultural factors account for almost 40% of the difference between high and low growth companies.

  • For example, if innovative and cutting-edge offerings will be crucial to your strategic growth plans, you need to encourage a climate where open communication, creative thinking, off-the-wall ideas and collaborative teams thrive.
  • On the other hand, if your strategy depends upon a tried-and-true product that already has solid name recognition, you want a more “traditional” culture with a supportive structure of processes that ensure you are able to maintain market position, strengthen your brand and yet be able to adapt and scale to changing market conditions.

When it comes to workplace culture, it is not about right and wrong.  It is all about creating the right organizational culture for your unique business strategy and marketplace.

Talent Perspective – How Organizational Alignment Creates Growth
Once you have aligned your culture with your business strategy, it is time to find the top talent that will get you where you want to go.  To set them up to succeed, make sure you have effective new employee onboarding, employee development, engagement and retention programs in place to help them thrive.

The Definition of Talent
We define talent as the workforce that leaders must build and manage to get work done – ideally in a way that creates a unique advantage that their competitors cannot replicate. Talent accounts for 29% of the difference between high and low growth companies.  One good indicator of success is observing that people who are a good strategic and cultural fit are most likely to be high performers within your strategy.

The Bottom Line
All three organizational factors – Strategy, Culture and Talent – need to be aligned. If even one of these three pillars is weak, your company’s health and performance is at risk.

  • Your strategy must be clear, believable and implementable by your entire workforce.
  • Your culture must be understood, consistent and aligned with your strategy.
  • You must be able to attract, develop, engage and retain talent that thrives within your culture to execute your strategy.

To learn more about how organizational alignment creates growth, download Organizational Alignment Research Findings- The Missing Ingredient

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