Updated January 2021
Widespread and industry-specific economic issues underscore the value of strategic alignment.
In situations where revenue is scarce and competition is on the rise, a business that emphasizes alignment between its core components is better positioned for effective response. A carefully developed and properly executed plan for strategic alignment mitigates waste and ensures resources are dedicated to the right areas at the proper time.
The enduring value of strategic alignment
A harmonious relationship between the foundational aspects of a business is highly valuable in all situations. During periods of economic uncertainty, it’s even more important to have lean operations that support company goals and help maintain business continuity.
The Harvard Business Review defined strategic alignment as having all elements of a business organized to support its long-term purpose. This may seem like an obvious goal. However, as companies grow larger and more complex over time, they can lose sight of overall alignment as different opportunities, needs and issues arise within specific areas of the organization. Bringing all of a business’s different parts together, and developing a holistic view of alignment between core elements like structure, resources, strategy and operational environment, is vital for success.
It’s important to note that strategic alignment isn’t a static concern, a project that can be started and finished with no additional attention necessary. Regardless of size, experience or the industry in which they operate, change is a constant for modern companies. An effective strategy for alignment means regular assessment. Two key questions highlighted by the HBR can help:
- How well is company strategy aligned with long-term purpose?
- How well is company strategy aligned with organizational capabilities?
Businesses that can provide positive, confident answers to both of the above questions are in the best position for positive growth in a normal economic environment. When they face a less-positive economy, strategic alignment is even more important.
The power of strategic alignment during an economic downturn
Issues such as conflicting priorities and a lack of strategic focus are never beneficial. However, in a robust economy where a business performs well despite the lack of strong strategic alignment, companies may have the luxury of addressing these concerns on a more relaxed timetable. That’s simply not possible during a period of uncertainty or a widespread economic downturn.
The best time to start focusing on strategic alignment is right now. Short-term efforts to stabilize operations, if necessary, must be balanced with longer-term goals for strong strategic alignment. But only companies that understand the importance of strategy alignment and act on this need in a purposeful, targeted fashion will stand the best chance of weathering the storm. Such enterprises will also position themselves to react to the eventual economic upswing in the best possible manner.
Alignment is absolutely critical to the success of transformation projects. When all stakeholders, from executives to individual staff members, understand the connection between front-line initiatives and higher-level strategic objectives, there is less uncertainty. When everyone understands their role, they can be more confident when taking specific actions involved in supporting broader goals of their organization.
McKinsey & Company highlighted several keys to success in digital transformations, which can be especially valuable during uncertain economic times. While the right technology and operational changes are indisputably vital, so is organizational alignment in terms of keeping staff empowered and informed. Important factors include developing clear reasons why changes are needed and sharing them with staff and enabling staff to think critically about established workflows and processes. Giving employees the power to identify areas of opportunity in relation to a digital transformation – and therefore take more ownership in the process – is also an important consideration.
Strategy portfolio management supports strategic alignment
Strategic portfolio management provides a pathway for businesses to realize enterprise wide strategy-execution alignment with a high degree of oversight and visibility. A strong SPM or SEM solution uses technology to enable the execution of critical business initiatives, no matter what they may be. There are four key qualities to keep in mind when it comes to finding the right platform to support your organization’s strategic alignment efforts:
- Focusing on outcomes: The solution will not only allow for tracking progress and expenditures but emphasize the results as well.
- Combining data, process and culture: Combining program data and process governance enables real-time visibility, accountability, and transparency across the entirety of your program. Accurate, immediate data provided by a single source of truth enables better, faster, data-based decision making. In turn, this maximizes program results
- Supporting unique methodologies: No single formula is effective for SEM. Businesses need the option to build their own framework for success.
- Enabling agility: SEM is an ongoing, long-term concern. An effective solution supports additions and adjustments to this effort.
Shibumi supports strategic alignment through an effective, purpose-built SaaS platform designed specifically to maximize the return of SEM efforts. To learn more, schedule a demo today.