Company Alignment: The CEO's Roadmap to Business Alignment
Alignment can be elusive for even the smallest start-up companies, never mind mid-market companies that have multiple divisions, departments, or business units, different locations, new acquisitions, or remote employees. The more successful you are in growing your company, the more complex your organization becomes, and the more challenging it is to communicate effectively and attain alignment. And, as the CEO, aligning your company to succeed starts with you. You need to have a company alignment strategy so that all levels of the organization know what is expected of them. According to an article in Harvard Business Review by Oxford University’s Jonathan Trevor and Barry Varcoe, "Large, diversified, and geographically dispersed enterprises, in whichever sectors they compete, require the greatest amount of strategic effort by their leadership to be aligned.”
What do I mean by alignment? An article in IndustryWeek quotes Fred Smith, Chairman of Federal Express, as saying “Alignment is the essence of management,” and goes on to say that “Alignment reflects active ownership on the part of team members, not simply the absence of disagreement… Alignment is an agreement on the goals of the organization and on the process of allocating resources to achieve these goals.” The HBR article I mentioned earlier describes alignment in this way: winning through a tightly managed enterprise value chain that connects an enterprise’s purpose (what we do and why we do it) to its business strategy (what we are trying to win at to fulfill our purpose), organizational capability (what we need to be good at to win), resource architecture (what makes us good), and, finally, management systems (what delivers the winning performance we need).
4 Types of Corporate Alignment
- Strategic Alignment - the company’s goals and efforts should be aligned to achieve the company’s long-term strategy and purpose. Your 3-5 year plan should get you closer to your BHAG, for example.
- Personal Alignment - the company’s employees should be aligned to the company’s culture. Each hire should be a good Core Values fit in addition to a good performer, and should be committed to achieving the company's Core Purpose. The employee needs to understand their part in the company's strategic vision for complete company alignment.
- Vertical Alignment - departments and individual contributors should be working toward the company’s goals. They need to understand and align their efforts to achieve organizational alignment.
- Horizontal Alignment - departments should be aligned with each other around how resources will be shared and which cross-functional projects are top priority.
All kinds of alignment are critical to your organization’s success through all levels of the organization. Nevertheless, it is really challenging to align horizontally across teams/locations/departments AND vertically, from the top-level company strategy all the way down to each front-line employee. Each person needs to align his/her work to the company’s goals, and your departments need to be aligned with one another so you don’t create unintentional silos, miss cross-functional project milestones, or create competition for shared resources. The executive team needs to be aligned around the company’s strategy and the right way to execute it. So how do you get your company to function as a well-oiled, fully aligned machine? The best way is to align employees with company goals and create a plan to execute it - from the executive team down to the customer service team and everyone in between.
CEO's Roadmap to Company Alignment: Start with Why
Aligning your organization begins with establishing and articulating a compelling Core Purpose. According to Trevor and Varcoe, “ Purpose is the loadstone upon which every enterprise is built.” An article in Forbes describes the dangers of skipping this step: “Without establishing the ‘why’ it is difficult to built and protect a great organizational culture… If everyone isn’t totally aligned, the employees will eventually receive mixed messaging and start to lose faith in the mission.”
Bottom line: Your Core Purpose and Core Values are the glue that holds everything together. You should be abundantly clear about why you are doing what you are doing (Purpose) and how you should go about doing it (Values) because you need these fundamentals to make the right strategic decisions, to hire the right people, to build the right organizational processes and capabilities, to attract the right customers and employees, to implement the right systems, and to help your employees make the right decisions every day about how to spend their energy and effort most productively. This is the foundation on which your aligned organization is built. Without a shared purpose to anchor back to, people will have nothing to guide their decision-making or knit them together.
Having a compelling purpose is essential but it is relatively meaningless unless you’ve communicated it effectively. Here’s a great video example of one of our clients sharing the story of his company’s purpose in a compelling, memorable, and impassioned way. Think about how you can communicate your Core Purpose in a way that your employees will connect to it.
Company Alignment: Visualize Your Strategy and Execution
Next, create an aligned strategic plan - your BHAG (Big, Hairy Audacious Goal) that aligns with your Core Purpose, your Winning Moves (3-5 year revenue generating strategies) that get you close to your BHAG, your Brand Promise that helps you attract the right customers, and your Core Competencies that help you build out the organizational capacity to support your growth strategies and differentiate your company from the competition. Trevor and Varcoe describe the importance of business strategy in this way: "If purpose is what the enterprise exists to achieve and why it matters, then business strategy is planning for what the enterprise must win at to fulfill its purpose.”
Creating a strategy that’s aligned to your Core Purpose and Values is only half the battle… you must also execute that strategy. According to Trevor and Varcoe, "It is a reckless leadership team that commits to a business strategy without knowing whether they can achieve it.” You have to be able to align the energy of your team and the capabilities, systems, and processes of your organization so that everyone is rowing in the same direction and focused on executing toward your strategic goals, and create a culture of transparency.
Company Alignment: Intentionally Structure the Right Culture and Hire the Right People
You must have the right values, beliefs and attitudes in place to cultivate alignment. Having an environment where people are transparent about their goals and willing to work hard to move the company forward doesn’t happen by accident. You have to strategically design the culture you want - one where alignment can thrive. According to Forbes, "Leaders must create experiences that enforce cultural beliefs. And those beliefs must lead team members to proactively take decisive action to achieve specific results.” In order to do this, you must intentionally hire people who are naturally aligned to your Core Values and compelled by your Core Purpose. You also need to align team members' skills and strengths to each particular role so that you get the right people in the right seats.
A powerful tool that can help you ensure alignment in the hiring process is a Job Scorecard. If you create a Job Scorecard for each position as you fill it, you can also use that Job Scorecard to help the person in the role stay aligned to the purpose of their position, their key responsibilities, and the results expected of them in their job.
Corporate Alignment: Use a Collaborative Planning Process
Once you’ve got the strategy and people figured out, you still have to build the right processes and rhythms in your company for alignment to flourish. Using a collaborative planning process is the best way to ensure that you get all the right information from the right people prior to creating your annual and quarterly plans and enforced during your weekly meetings. Company alignment is a skill that you acquire. You may need to do some trial and error, but we’ve found that this is a good place to start for your collaborative planning process:
- Collect Start-Stop-Keep pre-work from all the departments and teams in your Company. The executive team leader can filter through his or her direct reports’ inputs and compile a list of the top Start-Stop-Keep items to discuss in planning.
- Customize an agenda so that you have the right discussions in your Annual or Quarterly Planning session at the executive team level.
- Discuss, debate, and agree the top initiatives for the year and quarter. Consider the Start-Stop-Keep inputs from the teams and alignment to your long term strategic goals. Don’t leave the room until you can all agree to support the company’s plan - if the executive team isn’t on the same page about the top priorities, then you’ll never have alignment throughout the rest of the company. Bringing in an outside facilitator is a great way to ensure that you’re using the time to have the right strategic discussions for alignment.
- Share your executive team plan (top initiatives for the year and priorities for the quarter) with your departments and teams. Each executive team member should have a planning session with their teams to create quarterly priorities that align to support the company’s plan.
- Have the departments and teams come together to share their plans. If there are any shared resources or dependencies involved, work out those details. Have the tough conversations needed to ensure that each team’s plan can actually be implemented successfully.
- Communicate the plan to every person in the organization. Each person should be able to articulate the top goals for the company and share how they are contributing to those goals.
If you follow these steps, you should be able to “close the communication gap” and create alignment around your company’s plan and stay focused on both your short term and long term goals.
Business Alignment: Be SMART and Transparent
To get the results you expect, you have to go a step further with each of your goals: all of your Annual Initiatives, KPIs and Priorities should have one person who owns them and clear success criteria. We recommend a simple Red-Yellow-Green process to ensure that all of your goals are SMART (Specific, Measurable, Attainable, Realistic, and Timely). You need to be aligned around this success criteria in order to achieve the results your business needs. Picture this: You are the CEO and you bring on a new controller. You are in agreement that his goal is to “Collect 98% of outstanding receivables.” If you don’t take the time to set Red-Yellow-Green success criteria together that you are both aligned around, the controller may think that collecting payment in 45-60 days is success, and you may think that anything short of 30 days is failure. Yikes! Skipping the conversation required to Red-Yellow-Green each goal can lead to costly misalignment.
In addition to making sure each goal is SMART, your team will be more aligned if you all have visibility into progress on each goal. Set up a dashboard where you can see everyone’s Priorities and KPIs and monitor the execution of those items throughout the quarter. Each person updates the status of their goals weekly and everyone is able to see what’s going on - you get real-time information about how the goal is progressing so that you can remain aligned.
Business Alignment: Establish the Right Communication Rhythm
Finally, to ensure organizational alignment, you need to establish the right communication rhythm. According to Forbes, "A rhythm of meetings and scheduled communication is key for any team to stay aligned. Priorities shift and leaders must be ready to adapt." Here’s our recommended best practice:
- Have weekly team meetings to review any Priorities and KPIs that are not on track. Spend time working together on adjustments to achieve your goals.
- Sync up with daily huddles so you can celebrate victories and understand each person’s top priority for the day. This will help the team stay aligned and accountable to their priorities and with each other. You can also drive strategic alignment by using a Daily Question in your huddle to keep the company's top goal for the quarter or year top of mind for your team.
- Collaborate with the team on an on-going basis. When in doubt, over-communicate rather than under-communicate. If you are using the Rhythm software, make Comments on your Priorities and KPIs to keep the team well-informed.
- Have ongoing performance conversations. Don’t rely on Annual Reviews to check in on those Job Scorecards you created. Ensure alignment, role clarity, and goal clarity by having real-time performance conversations and offering consistent feedback regarding performance and progress toward achieving expected results.
If it sounds like a lot of work, it is…. but it is worth it. Achieving alignment in your organization can have a powerful impact. IndustryWeek quotes Patrick Lencioni, author of The Five Dysfunctions of a Team, saying, “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.”
See how Rhythm Systems cloud strategy execution software helps keep your company aligned and accountable.
Interested in more information on Organizational and Team Alignment?
Leadership Meetings: Align Your Team and Engage Employees Monthly with this Agenda
Company Alignment: The CEO's Roadmap to Organizational Bliss
Virtual Alignment for Your Team in a Work from Home World
Focus and Alignment: 4 Questions to Ask Your Team
Leadership Team Alignment: When Less Truly Is More!
Aligned Planning: Getting Aligned Cross-Functionally Throughout the Quarter
Align People: Getting Everyone on the Same Page to Drive Team Performance
Team Planning: How to do Team Planning for Team Focus & Alignment
Why CEOs Find it Hard to Align Teams When Scaling their Companies
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