As we’ve already gone over, organizational alignment is the leading indicator of the speed of growth in a business. However, surprisingly, many companies do not possess this important element. In order to know if you have it (and subsequently obtain it), there are six different points to measure in every company. I’ll take you through each of them one by one.
Organizational Alignment Measure #1: Motivation of the Stakeholders
Alignment starts with the motivation of the stakeholders. Let me give you an example of what that could mean… I was in a situation where a private equity company had taken a company private that had been a public company previously and they put in a new CEO.
The investment window was three to five years for the private equity company, so the time horizon of the CEO and his motivation was quite short where the next layer down had the intention of working for the company for 10 to 15 years. There was a lack of alignment in their motivations. So that’s one example of the first phase that must be measured.
Organizational Alignment Measure #2: Strategic Initiatives
The second one is what are the strategic initiatives? I guess I should say one more thing about motivation, which is that also encompasses why we’re doing it. If someone’s more driven by financial return and someone else is more driven by a mission or purpose, then they are out of alignment.
The mission or purpose has to be aligned with your strategic initiatives. If your initiatives are all about revenue and your stakeholder motivation is mission driven, that lack of alignment will halt growth.
We haven’t found conclusive data yet that faster growing companies are correlated with more clearly articulated initiatives. I don’t think that’s true. It’s not important that they’re clearly articulated. It’s important that they’re in alignment, whether the initiatives are explicit or implicit.
Organizational Alignment Measure #3: Relative Investment
That next piece is what’s your relative investment? How are you investing your time and money against those initiatives? I’ve worked with a lot of companies that were struggling to grow in the area of their most important strategic initiative. One in particular that I recall was a software company. This company’s initiative got all the air time, and had the attention of all of the executives. But they only had 3 software developers out of 750 working on the initiative.
If the number one thing that’s going to save the future of the company has less than 1% of your development force on it, then that’s out of alignment.
Organizational Alignment Measure #4: Capability
Capability goes after investment. Are we invested appropriately? When this is really tightly aligned, you’ve created a strategy where the leverage point in the strategy is the capability that you’re the best in the world at. That’s bulls-eye.
For example: you’ve created a strategy that depends on solving really difficult analog optimization algorithms – and 5 of the top 14 scientists in the world in analog optimization work for your company.
Capability goes wrong when you end up with “it’s a good idea for us to make an adjacent move into the mobile market, but we have nobody in the company who understands that market. Nobody who’s ever done mobile.” So you hire a consultant or maybe some guy who was a bystander in a mobile company that did something impressive in the past. In this case, you have no drivers that have driven that capability before in your company.
Organizational Alignment Measure #5: Market Forces
The next thing is that those initiatives have to line up or sync up with market forces or customer demand. If your customers are all Rob Egan and your strategic initiative is to deliver pizza to them, then that lack of alignment is going to halt your growth.
Organizational Alignment Measure #6: Product/Service Delivery
The last is the actual product or service delivery, which could mean quality. It could be a quantitative or qualitative alignment, but the idea is that the product actually keeps the promise that was aligned with the motivation in the first place.
Organizational alignment can be tough to achieve on your own, because you may not give your company a fair, objective close-up. You may have a skewed perspective of what’s going on. Having a mentor to guide you and give honest feedback is another important element for keeping your business on track, and your company aligned. Mind Money Meaning is a simple, straight-forward mentoring system that will help you answer the tough questions and take a close look through an honest lens. Check it out right here and see if it’s the change you need in 2014.