As businesses muddle out of the recessionary hangover, the fundamentals management matter more than ever. For multi-national enterprises and small businesses alike – it is all about the results. With the pressure to perform ratcheted up to an all time high, corporate strategy and crisp execution are top of mind with business leaders. Crisp execution requires business strategies to be aligned with methodically planned actions. This article addresses five of those key areas where alignment to corporate strategy are essential to business effectiveness.
1. Strategy and mission alignment
If organizations cannot succinctly explain what they do, how will their marketplace consumers understand it? An organization’s mission statement must be defined broadly enough to allow room to maneuver, yet be direct and purposeful in defining the market(s) served, the products and / or services provided by the firm and the distinguishing characteristics of those offerings.
Let’s look at Target’s mission statement as an example and then break it down into parts.
Target’s Mission: “Our mission is to make Target the preferred shopping destination for our guests by delivering outstanding value, continuous innovation and an exceptional guest experience by consistently fulfilling our Expect More. Pay Less.® brand promise.”
What are the key elements?
- Market Served: economy and quality minded shoppers
- Contribution: exceptional guest experience
- Distinction: outstanding value, continuous innovation and an exceptional guest experience by consistently offering more for less
This same information must align with the strategy of the organization. Strategies are broad in scope, but should also be capable of being summed up in strategy statements that employees will understand and embrace. A strategy statement, while being simple in structure, must also anticipate the need for adaptability. Too much specificity in the statement will undermine flexibility down the road.
At a minimum, for strategy to yield competitive advantage, it must address three key questions:
- “What do we do?”
- “Who are our customers?”
- “How do we do what we do better than our competitors?”
The aligned strategy statement “shell” for one of Target’s brands might be stated as follows:
“Our strategy is to _____ by offering _____, at a cost that brings value to our customers unmatched by our competition through ___ and ____.”
Note the alignment of elements in the mission and strategy:
Contribution = “What do we do?”
Market Served = “Who are our customers?”
Distinction = “How do we do what we do better than our competitors?”
2. Strategic goals and core values alignment
Strategic goals and organizational core values are both extremely important aspects any business, so overlooking the alignment of these elements is a serious mistake.
Strategic goals should define the outcomes the organization desires to accomplish in measurable terms.
Core values serve as the compass to help steer strategic decision making. Businesses should know what these values are and state them in no uncertain terms.
If a core value of the organization is to respect employees and promote quality of life, then setting goals that are unrealistic and are sure to drive employees into the ground is a violation of that core value. Such a violation represents an alignment issue. While super-human feats may bring about short-term benefits, sustaining them over time is not realistic – therefore, no long-term advantages will be gained.
3. Strategic goals and operational capacity alignment
The best way to ensure alignment between strategic goals and operational capacity is to face realities during planning and do not allow over zealousness projections to take over. Ask questions.
- Do our internal systems have the ability to support goal achievement?
- Will suppliers, distributors and partners be able to keep pace in support of goal attainment?
- Can our managers and employees step up to the added workload an pressure we will be asking of them?
4. Strategic goals and core competencies alignment
Strategies should follow a simple alignment rule related to business core competencies. Compete where you have an advantage, otherwise do not. Do the skills and knowledge exist in the right levels within the organization to accomplish the strategic goals? In strategy development, the question of “what should we do” is a corollary to the “what we do” question. This perspective relates to building competitiveness in your offering and exploring tangential markets that might be exploited, provided that the barriers to entry are not too high and organizational capabilities match the opportunities being evaluated. Truly gauging core competencies is key to ensuring alignment exists in this area.
5. Strategy and operational execution tactics alignment
Operations-level planning describes the tactics of execution, correlating strategy to action. Misalignment often occurs here, primarily because companies skip over operational planning altogether or do a poor job of paying attention to details.
The goal of the operational planning is to create realistic and comprehensive work breakdown structures (project plans) for the work entailed in all identified initiatives related to the strategic goals of the client. Additionally, accountability and responsibility structures get established at the initiative and project levels when operational planning is done correctly. This activity has an important alignment to budgets, as it affects resource plans, infrastructure and schedules that might have downstream consequences to sales, marketing and other functions.
It is critically important to build alignment into strategic plans as they are constructed and each time they are refreshed. Alignment refers to sensibly attaching strategies to actions while remaining true to the organization’s mission, core values, actual operational capabilities and core competencies along the way.