The importance of Management Alignment and how to implement it
This article has been released on LinkedIn on 30th December 2020
Photo by Gustavo Leighton on Unsplash
After a highly unusual year 2020 with many new paths and requirements to work and collaborate, 2021 is approaching soon. Is your management team and subsequently your whole organisation ready to move into this new year, to restart ‚normal’ business but to deal with the mid- and long-term aspects of the Covid19 pandemic period?
Are your teams aware of the most important priorities, opportunities, challenges and risks ahead? Is your management team aligned on the company strategy and the goals for 2021 and are they ready to uniformly communicate these through the whole organisation? Are structure, resources, systems and processes in place to support the implementation of the strategy?
All of these questions have to be asked and answered to arrive at the base camp to approach the new business year 2021. The top management should take their time to discuss them thoroughly to reach the needed level of alignment at the upper levels of the company.
"Alignment is the essence of management.“, Fred Smith, Chairman of Federal Express
There are basically two major types of alignment in an organisation. Firstly of all the top management layers, the Executive Board and the operational top management must be fully aligned on the strategy, the derived goals for the company and the main initiatives to execute the strategy in the upcoming business year.
Secondly the assets, the resources, the organisation, the business processes and the supporting IT systems must be aligned to implement the strategy. If one of these two interconnected alignments is not prepared properly the company is acting way below its capabilities and is destroying value instead of reaching its goals.
As one of our clients stated: "I thought my team was perfectly aligned -- until I asked them what our top opportunities and challenges are, and got six different answers from six different members of the team."
Beginning of each business year many employees in larger organisations have severe problems to articulate the most important strategic directions of their companies which leads to uncoordinated actions and waste of resources across the whole firm.
The root cause for these problems are in most cases different perceptions within the management team and the lack of a common plan how to execute the main building blocks in their strategic projects and daily operations.
If the Management team is not aligned - the company will not deliver.
Alignment reflects an active ownership on the part of the team members, not simply the absence of disagreement. Many CxOs fall into the trap of assuming their management team is aligned because of a lack of any active disagreement, and therefore do not give any energy at improving the leadership team's alignment of the business priorities.
What is a well aligned organization?
Imagine how easy it would be to lead an organisation in which every individual knows the business' strategy, goals, and main challenges? "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," according to Patrick Lencioni, Author of "The Five Dysfunctions of a Team".
"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,"
Where would you set the mark?
If you would need to rate a percentage of alignment of your management team in your organisation on a scale of 0 to 10, where would you set the mark?
At the beginning of each business year most management teams are assessing their alignment level somewhere between 4 and 5, which results in a very suboptimal and demotivating start into this new period since it shows that approximately 50% of the companies resources are deployed in areas which will not contribute to the overall company strategy and goals.
Without a clear management alignment process most managers will continue to focus on "their ideas," and this leads to many disjointed projects and the corresponding negative bottom line impacts.
Especially at the beginning of a new business year the management teams need to spend time together to honestly analyse where they stand and what is needed to move the alignment rate from 4-5 up to 9-10. In most organisations this time is not spend due to the important year end closing requirements, the holiday season and individual business unit ‚kick-off‘ activities at the beginning of the year. The current Covid19 „working from home“ situation will add an additional burden to the task of a management alignment but it can and has to be done - alone or with the punctual support of external experts to speed up this process.
How a management alignment can be initiated
1. Executive Board ownership is a must have
Since nobody “owns” the management alignment process and no individual or group is functionally responsible for overseeing the arrangement of the enterprise from end to end the Executive team needs to take the accountability for the management alignment to get rid of the ‚silo thinking behaviour‘ and to define proper cross-company goals to support the implementation of the strategy. And it should not just the CEO or the Managing Directors who should take this ownership since modern enterprises are too complex in their design and management structures to be left to chance or to rely solely on the wisdom and execution power of one individual.
2. Think „Value Chain“ - not „Org Chart“
Many senior executives do not think of their enterprises as connected and coherent value chains. Multiple individuals and groups are responsible for different components of the enterprise value chain, and usually they are not as joined up as they should be. All too often individual leaders seek to protect and optimize their own domains and budgets, rather than align and improve across the entire enterprise. Alignment thinking requires all decision makers to view their enterprise as a value chain, not merely a set of more or less valuable boxes and wires on an easy-to-forget, ever-changing organisational chart.
3. Focus on goals and ongoing communication
The start of the year is the time for resolutions and goals. Management teams should focus on goals which are derived from the strategy and can be easily broken down and explained to each team member. Envisioning what executing and winning looks like is a critical part of achieving goals. Studies in neuroscience show that when we literally picture ourselves achieving a goal, our brain starts to find ways to get us there. A great exercise to go through once a team has defined their goals is to first individually picture what achieving looks like and then share those ideas with the team. There is never too much repetition when comes communicating the goals and how to reach them as a team. Without an alignment on the goals no KPI dashboard nor any OKR implementation will create any value.
4. Regularly follow up to stay aligned
A series of meetings and scheduled communication is key for any team to stay aligned. Priorities will shift over the year and management must be ready to adapt. But all must agree on what the priorities are and how to reflect them in the ongoing strategic initiatives and projects. Otherwise varying directives will be coming from the top and the emerging chaos will deeply affect the motivation and performance of the whole company. These follow-ups should be one of the priorities of the management team and must be consistent.
Get out of the ‚business-as-usual‘ trap at the beginning of the year
The typical trap of ‚business as usual‘ at the beginning of each business year can get in the way of the required in-depth discussions and tough choices that need to take place regularly to lead a strategically aligned enterprise.
The above listed alignment activities require sound judgment, courage, time, and energy to answer to be performed at the beginning of a business year to reach the base camp as a team and not as a distributed group of individuals.
DECOMPLEXITY Europe is a Management Consultancy specialized on organisational complexity reduction, strategic transformation programs and digital regulatory compliance. More information can be accessed on www.decomplexity.eu