By Max Leone     

Business Alignment: A True Success Driver for Your Company

• What is Business Alignment
• Why Business Alignment is Important To Your Company
• Signs of Business Misalignment
• Various Types of Business Alignment 
• Internal & External Benefits of Business Alignment and Your Employees
• How to Incorporate Business Alignment into Your Company

What is Business Alignment

Business Alignment is a strategic ongoing process which helps organizations move from a contrasting set of priorities and goals to a total company shared vision and common unified direction.

The goal of business alignment is to increase the efficiency or effectiveness of an organization's business model. If alignment is not present, the organization's objectives may be in jeopardy of not being met and its performance will suffer as a result.

When the owner, CEO or president of an organization decides to embark on an effective business alignment initiative for their company, they will need the effort and commitment of the entire management team to embrace this process.  This commitment is paramount as it may also require new strategic adjustments of current processes, policies and incentives currently in the organization. 

Once a clear strategy and team buy-in is in place, the implementation plan will need the undivided efforts of the focused team to bring this new direction to the entire company and be part of the positive cultural trajectory that real strategic business alignment will reward.

Business alignment ultimately defines how your organization works together and how it aligns its valuable workforce around a verifiable common strategy.  The strength of an aligned unified group can be incredibly powerful for your company and is unleashed through a multimodal & clear intercompany communication system to boost comprehension and understanding.  However, business alignment is not a side effect of communication but ultimately a primary outcome of the systematic process that has been put in place.     

Why Business Alignment is Important To Your Company

When evaluating the decision to go down the path of solid business alignment for your organization, it’s fascinating to see how multiple groups, research data and studies have all defined the importance of alignment, its value and the potential game changing impact it may have on your company.

Here are just a few outstanding business alignment highlights for you to contemplate:

- Highly aligned companies grow revenue 58% faster and are 72% more profitable than misaligned counterparts – Source: LSA Global

- Aligned companies churn 36% fewer customers each year – Source: Cerius Executives

- Companies that regularly exceed revenue goals were 2.3X more likely to report high levels of Alignment – Source: InsideView

- Alignment of sales and marketing can result in 209% growth in marketing revenue – Source: Marketo

- Highly aligned companies have 36% higher growth than poorly Aligned companies – Source: Sirius Decisions

- Poorly aligned companies have 50% lower returns on investment capital and 18% overall in EBITA – Source: McKinsey & Company

Signs of Business Misalignment

Businesses are often said to be out of alignment when they lack focus or have conflicting objectives, goals or values.

Misalignment will evident when it is not clear which company objectives are most important and what the relative priority should be for each objective.  Another sign of misalignment is when the company's vision and goals are not aligned with all its resources and the full comprehension of their entire workforce.

Furthermore, a company will demonstrate signs of misalignment when its top-level mission does not reflect the current daily operations at each level of the organizations work instructions and structure. For instance, a company may have a grand vision of creating 100% on-time delivery for their customers but it has no clear plan to achieve that vision in its day-to-day operations.

Finally, an organization may have focused on a particular product, market, or customer segment but have not yet made the necessary investments to support its strategy.

Other indicators of Business Misalignment:

• Decisions that take too long to make
• When decisions are made, they don’t match the companies values and purpose
• Loss of competitive edge because innovation is difficult
• Silos form around departments, teams and individual employees
• Unproductive and excessive meetings
• Low morale in the workplace creating negative impact on performance
• Reduced customer satisfaction due to lack of attention
• Employees are reactionary and always putting out fires instead of being proactive
• Difficulty in recruiting and retaining talent

Types Of Alignment In Organizations

I firmly believe that business alignment is the key factor or can possibly be the one thing that will enable any organization to substantially improve its short term and long term performance. 

Some companies incorporate basic business alignment elements to their strategy and simply improve within a short period of time.  Other companies prefer to go much deeper and incorporate many sublevels of alignment within the total value chain of their organization to strive for deeper optimization.  

The 7 types of alignment below give a brief overview of the general elements within each one.

1. North Star Alignment – structured around a singular goal or purpose, vision or mission

2. Strategic Alignment – a strategic plan outlining what individual contributors work on

3. Functional Alignment – alignment between organizational functions - example: (sales & marketing) or (product engineering & accounting)

4. Incentive/Performance Alignment – incentive structures and behaviors - example: (commission based compensation) or (bonus based compensation)

5. Employee Role Alignment – alignment of specific function(s) that employees perform

6. Company Role Alignment – the suitability and value specific roles of the complete organization

7. Customer Alignment – assessment and execution of being able to deliver real value that the customer unquestionably wants

Internal & External Benefits of Business Alignment & Your Employees

We’ve defined how a business alignment process helps in aligning the company's strategy with its operations and culture, ensuring that all aspects of the company are working towards achieving a shared goal. This confirms that the company is now strategically and operationally aligned within key aspects such as its strategy, operations, sales, culture, employees, suppliers, customers and community.

When you consider all of the physical resources within your company, the value of your human resources stand out.  Your business family of employees can in most cases, make or break your organization. 

Before we outline the internal & external benefits of business alignment, there are some alarming survey data points that directly impact those valuable human resources “your people”, and may help drive the decision to refocus your current business alignment position.    

• 33% of employees don’t feel they are reminded of their company’s mission often enough – Office Vibe

• Only 56% are inspired by their company – Modern Survey
• Only 14% of employees understand the organization's strategy – Harvard Business Review

• 22% of employees don’t understand their companies values or don’t even know what they are – Spark Hire

• 57% of employees wouldn’t recommend their organization as a good place to work – Office Vibe

• Only 37% said they have a clear understanding of what their organization is trying to achieve and why – Harris Interactive

A key factor and the positive consequences and benefits of implementing successful business alignment within your organization, is that your entire workforce understands, shares and supports the company’s vision, mission and goals as well as their direct role in accomplishing these. Real business alignment can help drive your employee’s satisfaction in their position and in the success of your organization.

I believe it was best stated in Patrick Lencioni’s New York Times best-selling team leadership book Five Dysfunctions of a Team as follows:

“If you could get all the people in an organization rowing in the same direction, you could dominate any industry, in any market, against any competition, at any time.”

Internal Benefits of Business Alignment

• Increased focus on high value projects and activities

• Less confusion by the entire organization on the direction of the company

• Teams will perform with higher efficiency

• Decrease employee turnover as a result of understanding the mission of the company and the relationship of their position

• Increase current employee engagement and morale and increase "new talent" acquisition

• Less wasteful spending on projects and activities that don’t align with the company objectives

• Faster time to market

• Increased operating margins

• Higher quality and greater agility

• Employees feel appreciated in highly aligned companies and naturally give more to the organizations purpose

External Benefits of Business Alignment

• Customers are more likely to rank their experience as positive and are definitely more likely to offer referrals and testimonials that can be utilized to further gain position within your target market

• Customers perceive a well aligned organization favorably and this allows for greater trust and confidence - a big factor in growing its business with you

• Suppliers have fewer issues with well aligned organizations and are more willing to offer additional incentives as well as referrals to organizations that can utilize your services

• The market segment you work with will better understand what your company does and grasp your unique value proposition therefore enhancing your positive brand recognition

• As a result of better performance, growth and reputation of your brand due to successful business alignment, industry publications in your market segment will want to promote your success in their professional and social distribution network  

• Your ability to get external funding (if needed) will be easier with a consistent financial track record and a proven well organized aligned company

• Your focus on the structure of business alignment in your organization may also clarify target key acquisitions or strategic partners that would be a natural fit for your aligned growth and stability 

How to Incorporate Business Alignment into Your Company

1. Brutally Honest Assessment and Analysis

The first step in this process is to understand the company's current state and then identify what needs to be done to make it strategically aligned.  Sometimes it’s very difficult to see voids in the organization during this assessment phase because you are “living” in the organization each day.  Recruiting a professional outside view with a non-biased perspective will expedite this process for you and make it much more defined and productive.  

2. Roadmap

The next step is to create a roadmap for achieving business alignment by identifying not only what needs to be done but when it needs to be done, how it will be done, and who will do it.

3. Detail Plan Review

The third step is to communicate the plan by sharing it with all stakeholders in the company and getting feedback from them. This is done in order to get buy-in from all parties involved, as well as make sure that any problems or issues with the plan are corrected before moving on to the next step.

4. Execution

The fourth step is finally executing on this plan by setting up specific milestones and monitoring progress against these milestones.

Conclusion

With your acknowledgment that implementing a strong business alignment structure is important to your organization, and knowing just how crucial it is to have a well-defined alignment strategy, you will have taken the first step to securing the performance, longevity and stability of your company now and in the foreseeable future!

Optimize Your Business Now!  Are You READY?

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