Strategic Alignment: The Stars Don’t Have to be Aligned…. But You Do

A classic Russian fable depicts a crab, a pike (fish), and a swan who try to pull a cart. The swan flies skyward, the pike jumps into the water, and the crab pulls back. The fable ends with the question and conclusion, “Who is to blame, who is at fault? We will not judge. But the cart did not budge.”

This lesson applies to company strategic alignment. Some companies get lucky when the stars align in their favor. Most companies must make the best of tough situations. Good things happen when people work together. Bad things happen when people pull in different directions. This is especially true during uncertain times.

Like many aspects of business, strategic alignment is easier said than done. Focusing on key leverage points improves the chances of success. Below are important areas for alignment and ways to strengthen the unity of vision and action.

• Have a strong, coherent, credible strategy. The company strategy is the foundation for the operating plan. Your strategy and values must be stable and consistent. A moonshot strategy is good and inspiring to some, but it must be apportioned into tangible milestones. People get confused by a big gap between the strategy and the operating plan.
• Focus on clients. An operating plan without revenue is not sustainable. Market demand must drive your strategy and operating plan. Most clients care more about the value you can provide them than how clever you are. Cultivate real-time client feedback and listen to what clients buy, not what they say.
• Adapt the essence of the strategic vision to different groups. Use the elevator pitch approach. If you cannot communicate your strategy clearly in 30 seconds or less, keep working to get to that point. Clausewitz famously wrote, "No campaign plan survives first contact with the enemy." This can be updated to, “No half-baked strategy survives first contact with the internet.”
• The different groups and areas for strategic alignment for most companies are the following:

1. Owners (including board members): Strategies need to be integrated into high-level goals and plans. If you are focused on growth and increasing market share, profit projections may need to be reduced. If you are focused on innovative new products and services, your R&D budget needs to reflect the investment required. Set ambitious goals but make them realistic and corresponding to market demand (i.e. customers). Most importantly, focus! Do not expect management and employees to do everything at once. The resources available for each goal and initiative diminish with each new one added.
2. Managers and supervisors: Integrate strategies into division and team goals. Everything in the above owners’ bullet point applies to managers and supervisors even more. Give your divisions and teams incentives to work together. Create win-win situations, to counter intercompany rivalries. Managers and supervisors are translators between employees and owners. It is the managers’ responsibility to communicate strategic priorities to employees. Also, managers must facilitate upward information flows from the front lines to owners, especially when the information is unpleasant.
3. Employees: Most people do what they are told to do and what they get paid to do. Job descriptions and performance goals must support high-level strategies. It makes sense on paper to hire less support staff and promote multi-tasking. But do not expect front line sales staff to meet aggressive new account targets if they are required to spend half their time completing reports and ad hoc management information requests (see HERE for an earlier post on this topic).
4. Distributors and suppliers: Very few distributors and suppliers will bankrupt their business to make yours successful. Communicate your strategy to distributors and suppliers and make sure you have mutually beneficial incentives. Everybody can profit and grow together.

Achieving strategic alignment is a constant and difficult challenge. The best approach is to (1) craft clear communications and (2) align goals, operating plans, and incentives at all levels of the organization. You will have crabs, pikes, and swans on your team. Especially with knowledge workers, people will do their own thing if they think they have better ideas or sense organizational inconsistencies. The stars may or may not align in your favor. Taking control of your own destiny is a better path to success. Aligning everyone’s goals, plans, and incentives is the best way to get everyone pulling in the same direction and ready to face the inevitable market challenges together.