Strategic Alignment: Decoded
Did you know that you don’t have to be friends with (or even like) your team members to create a high-performing team? I certainly didn’t. Through my work with executive team clients at FMG Leading, I have learned what makes – and doesn’t – a healthy, effective leadership team, one that produces a great company culture and great financial results.
My biggest lesson:
Executive teams have to be both clear and aligned on who you are, where you’re going, and how you’re going to win for your organization to thrive.
This is strategic alignment – the extent to which all leaders share a consistent perspective about, and commitment to the organization’s stated mission and vision, its goals, and its strategies for achieving success.
In search of a perfect strategy, I often see executive teams stall, fail to choose a direction, and resent each other in the process. Or, they will feign alignment for the sake of avoiding difficult conversations (and choices). I call this “spinning out,” and it is what you’d expect: messy, frustrating, and disengaging.
Luckily, there is another way to build strategy and team simultaneously.
First, focus. Developing a focused strategic plan that enables you to win in your market is critical. Quick tip: if your strategy doesn’t cause you to say “no” to something (even something you love doing), it’s not clear enough. Lack of focus will kill your company’s ability to scale, especially in the early days.
A major trap my clients fall into is the desire to do all the things, all right now. Or, the leaders are siloed, only interested in their own success metrics. When asked what the strategic priorities are, the COO says, “Profit margin!” the CFO says “EBITDA!” and the Sales leader says, “New client acquisition!” Or, their strategic priority list covers 10-20 items, with three sub-bullets each.
Really, they’re ALL priorities??
When I ask them if they think they are aligned as an executive team, they tell me, “Yes, of course!”
A great example of brilliant focus is the premium motorcycle company, Harley Davidson. In 2009, they successfully navigated the global recession and an aging customer base by adopting a single differentiation strategy. ONE. As of their 2014 Annual Review, Harley topped $6B in revenues for the first time since 2006, with a net income jump of 15% year over year. For Harley, their disciplined approach to strategic focus not only worked, it fueled transformative performance in a very challenging economic environment.
You can believe Harley’s executive team struggled to stay true to their focus over the years that followed their declaration in 2009. It’s not easy but it’s worth it, as they proved.
Second, discover your brilliance. Once you have focus, then you’ll need to know your distinctive capabilities. Learn where you have inherent talents and collective genius. Many executive teams I work with fail to recognize the unique strengths of individuals, their team, and certainly the business as a whole. In pursuit of bright and shiny new targets, they can lose sight of what made them great in the first place (and what makes them great now). Knowing your organization’s unique capabilities is key to leveraging the areas in which you’re already winning, then building from there.
Third, collect enough of the right data. This involves both internal and external evaluation mechanisms that let you know how you’re delivering on your strategy, such as net promoter scores, product quality measures, industry analyses, and even measures of employee engagement and leadership performance.
How will you select the right data? Someone (anyone!) needs to have fresh market intelligence that makes its way to the top and throughout the minds of all key decision makers. Constantly scanning your environment for trends, gaps, and risks enables you to quickly match/align your current offerings (or new ones), as well as talent and structures, with those smart opportunities.
You need both lines of sight (internal pulse checks and market intelligence) for a strategy to win. Specifically, all members of the executive team need access to those inputs and mature dialogue skills to ensure you are on the same page about what the future looks like. That’s another place I’ve seen leadership teams fall down. One or a handful of executives see the big picture, while others are caught in the details of day-to-day fire fighting – and they can’t connect all the dots.
A strategy that keeps the wheels on the tracks is good, but it won’t have you thrive unless all data points are shared and understood by all members of the leadership team.
Fourth, everyone needs a clearly defined role. If you can’t answer the question, “How are you working to grow the business in support of our strategy?” your role is not clear enough. If someone on your team can’t answer that question, it is not because they are incompetent or a poor fit. More likely, you’ve neglected to help them clarify precisely the scope of their role. At some point, it is not about personality or smarts or commitment. Structures like clear role definitions really, really matter.
Finally, all of your organization’s leaders (beyond the executive team) need to know what success means EXACTLY. Specific metrics – and only a handful so they’re memorable – will enable you to meet all of your goals, not come in half-effective across the board.
Promise less; clarify more. Do less; achieve more. And, focus, focus, focus.
If you know your executive team is misaligned about what’s most critical to your business…
If you think your leaders are aligned on a strategy but are compliant, not committed…
If you are afraid to admit that you don’t actually know what your strategy is besides to “stay alive”…
Let our team help. We’ve seen it, we’ve lived it, and we know it. Let us help you get clear on where you are, where you want/need to go, and how you’ll get there (by when and with whom).
If you aren’t clear how your Executive Team stacks up, here is the checklist for strategic alignment*:
We have a formal strategic plan that enables us to “win.”
The executive team is aligned with and committed to the strategy.
All leaders understand the organization’s strategy and their role in executing it.
All leaders understand their most critical priorities.
Organizational goals, initiatives, budgets, and operating plans are aligned with the strategy.
We have the right metrics in place to measure performance in relation to our strategy.