Strategy misalignment is subtle and sometimes difficult to spot. Yet without a properly aligned corporate strategy, you are likely to introduce a serious dose of chaos into the organizational environment.
Corporate strategy is the blend of strategic goals that support the mission and vision of an organization. When a corporate strategy is aligned, the key outcomes (strategic goals) of the organization are united with operations and execution tactics. In other words, all parts of the organization’s eco-system (the sum of internal and external functions of an organization’s environment) are moving in the same well-defined direction. When strategy is misaligned operational initiatives are out of sync with the strategic goals of the organization, mission drift occurs within the operations of the business,
It is critically important to identify strategic misalignment early since misalignment can lead to chaotic reactions. Uncorrected, problems compound quickly and lead to serious issues within the organization.
How do you know if your corporate strategy is aligned?
Look for these symptoms:
Financial Projections are Missed
While missed projections can be traced back to an array of different issues, often the root cause is strategic misalignment. Why? Remember that strategy alignment is the union between operations/execution and strategy. If misaligned, you can imagine the types of non-strategic efforts that can occur at a grass roots level in the organization as managers and workers attempt to find their own direction. Over time you’ll find deadlines are not met within operations, product launches or service lines are delayed, and all of this directly impacts projected revenue streams.
Growth is Stalled
When organizations begin to misfire due to misalignment, initiatives required to support and sustain profitable growth get into trouble. It’s not that the leadership and rank-and-file employees don’t want to see growth occur. It is that, despite their best intentions, they cannot sufficiently coordinate efforts on their own to right the ship. Unfortunately, spotting this symptom is difficult in situations where governance is already lax or missing altogether. Righting the course of the business requires the efforts of all parts of the organization, but they must be working in concert together to do it. Such a feat requires the ability to align strategy and execution through and through.
Reactive Spending and Duplicity of Initiatives Occur
When strategy is misaligned, company divisions can drift into a self-directed mode that stray further and further from corporate goals. Reactive spending and duplicity of initiatives might occur as a result of lackluster quarterly or annual results being posted. In other cases, it could be part of a chain reaction, due to inter-dependent initiatives fighting for limited resources. These unsynchronized initiatives begin to impact each other and desperation sets in, creating a vicious cycle of time and resources being consumed.
Cultural Erosion and Morale Problems Appear
We’ve already mentioned the chaos that occurs with strategy misalignment. This chaos takes a toll on leaders and workers of the organization who share in a profound dislike of organizational chaos. As a result, morale suffers. If you notice an erosion of the corporate culture and morale problems, consider that your strategy may be misaligned.
Revenue and/or Profitability Decline
The bottom line impact of strategy misalignment inevitably falls to the bottom line. While revenue and profitability can decrease for a variety of reasons, most of these reasons trace back to misalignment. Profitability suffers as a result of any of the symptoms presented here, such as when new services or products are delayed in roll-out because the initiatives to bring them to market are unsuccessful.
How to Address Strategy Misalignment:
Just as it takes time and effort to see results from strategy, re-instilling strategy alignment and correcting misalignment requires time, work and discipline. The situation didn’t occur overnight, and won’t disappear overnight either.
Bi-directional planning (bottom-up and top-down) and appropriate plan governance can align corporate strategy and prevent the symptoms that can negatively impact an organization. We will discuss in greater detail how to address strategy misalignment in articles.
by Joe Evans