The Power of Strategic Alignment
No matter what the goal and what the strategy to reach it, the better you and your team are aligned and working together, the more likely you will succeed. We call this the power of strategic alignment and it accounts for 31% of the difference between high and low performing teams in terms of revenue growth, profitability, customer satisfaction, and employee engagement.
The group of trekkers pictured above follows the lead in almost perfect synchrony. Each one carries their own pack, each must take steps on their own, and each understands the power of the team effort in reaching their destination. They are aligned in plan, skills, abilities, and behaviors.
Ideally, leaders set and communicate a clear, believable, and implementable plan and then select team members with the right skills who commit to the goals and the way to get there in a way that makes sense. Right?
But in the real world less than half of corporate organizations make it to the “top.” Indeed, IBM found that less than 10% of well formulated business strategies are effectively executed. Our alignment research found that team members are half as clear as their leaders about the team’s goals, roles, success metrics, and operating norms.
And this high level of misalignment causes churn, dysfunction, and underperformance.
The Organizational Alignment Research
We believed from experience that aligned companies and teams consistently achieve higher performance — and the data supports us. Our strategy, culture and talent alignment research, based upon 410 companies across eight industries, showed that highly aligned companies grow revenue 58% faster, are 72% more profitable, and retain customers 2.23-to-1.
To significantly outperform your peers, companies and teams need to align their culture (how the work gets done) and talent (the needed skills in the right positions) with their strategy (the overall plan.)
The First Critical Step — Strategic Alignment
First, you must create the power of strategic alignment by having a direction and plan that is clear and compelling, understood, agreed upon, and believed to be achievable in your specific situation. Only then can your strategy for success gain the commitment and resolve you need for it to be translated into actionable items and effectively implemented across the organization.
How to Measure the Power of Strategic Alignment
After your next strategy retreat, you will know your strategy is clear enough, believable enough, and implementable enough when your key stakeholders agree that they:
The Bottom Line
High performing companies begin the path to success with a clear, believable, and implementable strategy. Ideally that strategy would be articulated on one page strategy map and include your own version of the big strategic drivers and the critical few optimizing strategies required to succeed. Once you have harnessed the power of strategic alignment, you can then focus on lining up your culture and your talent to perform at your peak.
To learn more about avoiding the traps associated with unclear business strategies, download 7 Ways to Stress Test Your Strategic Clarity
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