Picture this: You’re the CEO of a midsize firm, and also you simply returned from an costly, multi-day technique retreat together with your total administration workforce. You spent hours discussing the ins and outs of your technique, and it left you and your staff feeling extra aligned than ever. But are you really on the identical web page?
Our new examine suggests that you simply won’t be — and that this type of strategic misalignment is each extra widespread and extra dangerous than you may suppose.
Specifically, as a part of our ongoing analysis, we requested greater than 500 frontline staff, center managers, and senior executives throughout 12 totally different organizations to point how aligned they thought their firms have been with respect to company technique. And we discovered that the individuals have been largely optimistic, on common reporting that they felt strategic settlement inside their firms was 82%. But once we analyzed detailed written explanations from those self same staff round what their firm’s methods have been, we discovered that precise alignment (as measured by the linguistic overlap within the ideas and phrases they listed) was, on common, simply 23% — two to 3 occasions decrease than perceived alignment.
Unsurprisingly, this disconnect creates actual issues. We discovered that in organizations with bigger gaps between precise and perceived strategic alignment, staff have been extra skeptical concerning the effectiveness of their firm’s technique and its implementation, they usually reported that their firm’s makes an attempt to implement its technique have been each slower and decrease high quality.
For instance, staff at an ed tech firm in our examine rated strategic consensus inside their group at 77%, however an evaluation of their written responses confirmed that their precise alignment was solely 26%. Upon reviewing the outcomes, the CEO — a 25-year trade veteran — was stunned: “I’ve had a feeling that we were not completely focused, but the level of discrepancy and disagreement surprised me,” he shared. “Everybody seems to be interpreting strategy based on their functional silos, even members of our strategy team.”
Similarly, center managers and senior executives at a recruiting agency reported that they believed strategic alignment throughout their group was 90%. Yet we discovered that precise alignment was simply 30%, with staff itemizing priorities as unrelated as product diversification, including worth to the neighborhood, and constructing a strong platform as the corporate’s major strategic goal. In some instances, totally different staff’ understandings of their technique have been in direct battle: One respondent described a method of specializing in complicated, more-expensive companies, whereas one other described a method of investing in higher-volume, easier tasks that may be simpler to ship rapidly.
Too usually, executives and staff alike discover themselves in an echo chamber, assuming that everybody shares the identical understanding of the corporate’s technique whereas really pursuing divergent and even clashing targets. This inevitably results in politics, firefighting, unproductive conferences, and interpersonal challenges, all of which distracts everybody from their jobs and hinders precise worth creation.
That mentioned, true strategic alignment is the truth is potential. Our analysis highlighted three key steps leaders can take to foster alignment and get everybody (really) marching to the identical tune:
Focus your technique on driving buyer worth
First, we discovered that the CEOs in our examine who defeated strategic confusion, remodeled perceived consensus into precise strategic alignment, and succeeded at attaining their targets targeted nearly solely on prioritizing their prospects.
This pattern is in keeping with prior research. A 2023 overview of 245 educational papers discovered that corporations that prioritize buyer satisfaction carry out higher throughout all kinds of metrics, together with gross sales, earnings, money flows, inventory value, and extra. Another latest examine confirmed that firms that construct strategic consensus round supporting their prospects’ wants have decrease prices and better revenues, earnings, and valuations. When senior executives, center managers, and front-line staff are all aligned round a customer-focused technique, they’re much less more likely to find yourself spending wastefully or investing in disparate initiatives that devour sources with out driving buyer worth.
For instance, in 2020, precise strategic alignment on the Houston-based provide chain companies agency ITI Manufacturing was lower than 20%. Three years later, we discovered that alignment was as much as 82%. Sales have been additionally up 23%, and staff reported spending greater than 50% of their time on customer-focused duties.
What occurred? ITI shifted its technique to explicitly give attention to the one issue it decided was most essential for driving buyer satisfaction: giving prospects weekly standing updates on their orders. This new method enabled ITI to forge strategic consensus throughout the group and scale back the period of time individuals spent on internally targeted actions. As CEO Joshua Robinson defined, “Starting from customer value helped focus me and my team on the one thing that mattered most to our customers: providing weekly updates. It seemed so simple, even trivial at first. But today, the results speak for themselves. We can differentiate our pitch to new customers and prospects, and current clients love to provide testimonials on our behalf.”
Weave your technique into frontline staff’ each day work
Next, when you’ve reoriented your technique to focus as solely as potential on buyer worth, take steps to make sure that this new mindset permeates everybody’s each day actions. A technique can not merely be overlaid on high of staff’ day jobs — it should change into their day job. After all, it’s on-the-ground staff and managers who create worth for purchasers, and so it’s their each day work that’s most important to implementing a customer-focused technique.
Another enterprise in our examine, auto elements distributor Swagelok Southeast Texas, tried repeatedly to handle its strategic alignment concern. President Chris Jones described the various internally-focused initiatives his workforce had undertaken: “We were doing everything in the name of strategy — except for improving customer value,” he mirrored.
In 2021, the group recognized fast quoting as a essential buyer want, and absolutely refocused its technique round this objective. “We paused or deferred most of our internal initiatives, focusing our attention, effort, and energy on rapid quoting. [We] provided our customer service reps with an updated and streamlined computer interface, more training, and everything else possible to support their work. It was a series of difficult conversations with my senior executives to stop or defer unrelated initiatives,” mused Jones. “But we really made rapid quoting the centerpiece of our strategy implementation. Today, we have decreased average quoting time from 18 hours down to five hours, and more than 95% of our customers are satisfied with quoting time.”
Deborah Carpenter, Director of Strategy and Development at Swagelok Southeast Texas, added that this enchancment to the client expertise additionally had inner advantages: “Previously, sales team members spent more than 30% of their time following up on quotes — instead of doing their day job,” she defined. “It created a vicious cycle: Customers went elsewhere if they did not get a quote on time, and sales could not sell because they were chasing quotes instead of sales.” Weaving a customer-focused technique into the day-to-day operations of the enterprise enabled staff, managers, and executives to remain aligned, finally creating worth for each prospects and the corporate.
Implement technique by dialogue — not top-down directives
Finally, executives should do not forget that technique will not be carried out by senior executives, however by center administration and frontline staff. Leaders can not merely announce a method and assume it has permeated the remainder of the group. Instead, they need to proactively solicit enter and suggestions from throughout the org chart, really listening to lower-level staff and interesting in significant dialogue. After all, top-down communication from leaders to frontline staff might drive perceptions of strategic alignment, however it gained’t enhance actual consensus.
“Listening — not talking — to employees was the key,” defined Margaret Seeliger, Global SVP of Strategy at Sodexo’s Energy & Resources division, when describing how her workforce visited greater than 50 websites everywhere in the world to attach immediately with frontline groups. Through these conversations, her workforce found that to spend extra time serving to purchasers, staff wanted extra help on sure duties, and so the group carried out a method that was immediately knowledgeable by this enter to unburden frontline staff. These initiatives led to a 24% enhance in revenues, a 5% discount in bills, and a two-point increase to buyer satisfaction.
Reflecting on how impactful this dialogue-driven method to technique had been for Sodexo, Seeliger commented, “Senior executives can measure outcomes, create initiatives, and do town halls. But the real work of implementation — creating value for customers — happens at the front lines.” She continued, “How can we unburden frontline employees to focus their day jobs, on creating customer value? This is the essence of strategy implementation — and it all happens at the front lines. Senior executives have only two options: support them or get out of the way.”
Building strategic alignment throughout a corporation is at all times difficult, however a big hole between precise and perceived alignment makes it that a lot tougher to get on the identical web page and implement a method successfully. To foster true strategic alignment, leaders should focus your entire firm on driving buyer worth; weave that technique into everybody’s each day work; and develop strategic priorities not in a vacuum, however by collaborative dialogue with senior executives, center managers, and frontline staff.
