Aligning Employees with Strategy & Success

By Robert W. Bradford

Close your eyes and picture a ship...a Viking ship. Can you see it? The long wooden hull? The brilliant red and white sail? Row after row of oars? Now imagine that ship with all the oarsmen sitting on one side. What would happen? The ship would row in circles! The harder people worked, the faster they’d spin out of control. And what would happen if half the oarsmen faced the bow of the ship while the other half faced the stern? It’s obvious, the ship would go nowhere!

Why isn’t this so obvious in business? Many companies are trying to execute strategies with people who are rowing in different directions. To realize your company vision takes more than great strategy and implementation. You also need to make the strategy an integral part of the very fiber of your organization. You need to create "strategic alignment."

Is Your Organization Aligned?

Are your employees aligned with your business strategy? Try taking this simple test:

1. Ask each of your senior executives where your business is headed in the next three to five years and compare their answers (hopefully you will have alignment at this level).
2. Next, ask the same question to your sales personnel, customer service reps, and receptionists.

Think you’ll get the same answers? Think you’ll get anything close to your company vision? While strategy may be conceived in the boardroom, it gets executed on the front lines. Without the right people in the right places working together in the right direction, you’ll get nowhere.

Creating Alignment

Strategy drives decisions. Decisions drive actions. Actions drive results. To get the results you want, get the people who set the strategy and those who make the decisions on the same page with the people who take the actions. Alignment enables your management team to push the organization in the direction you intend.

How do we get this alignment? There are five basic steps that you must take to ensure your employees are aligned with your company’s strategies.

First, employees must have the conceptual tools required for good strategic thinking about their work.

Second, employees must understand the strategy.

Third, strategic alignment needs to be built around the structure of the organization.

Fourth, strategy must be reflected in the structure of individual jobs—especially those in critical areas.

Fifth, you must have buy-in to the strategy.

1. The Conceptual Tools

   Strategic alignment can only work if the employees already have the conceptual tools required for good strategic thinking. These tools include examples, role models, and training.

   While all employees do not need to be great strategic thinkers, they must be able to understand how their work fits into the success of the organization. They also need to understand how your business makes a profit. Show them how the strategy will make them better off, increase their job security, and increase the likelihood that they get promotions and future pay increases.

   Without these conceptual tools, it will be much more difficult to get buy-in and intelligent support of the strategy from an employee. Several companies with whom we have worked have had well-designed performance compensation systems fail simply because the employees didn’t understand income statements.

2. Understanding the Strategy

   There are three main ways to satisfy customers: price, quality (in the broad sense, including product features, technology, packaging and a host of other value-adding features), and service (again, in a broad sense, including delivery, support, etc.). No successful business tries to be all things to all people.

   Good strategy requires focus, and the more strategically focused the organization, the more decisions must be made in alignment with strategy. For example, companies that supply commodities must offer the lowest prices. They may make investments in efficiency while choosing to sacrifice investments in quality improvement or service. On the other hand, a premium goods manufacturer, like Rolls-Royce, can’t be deterred by customers who object to the prices they charge, and must constantly search for ways to better serve their target clients.

   An organization’s strategy drives its decision making, and without a clear understanding of the strategy, employees cannot be expected to make the right decisions.

3. Organizational Structure

   The structure of your company can greatly help or hinder strategic alignment. For example, it’s very common in larger organizations to find a "silo effect," in which the organization is very effective vertically within one department, yet lacks efficiency and flexibility in activities which require cross-departmental cooperation. While this effect can play in your favor if you create these silos around areas which may become separate strategic business units, it may present obstacles to integrating an acquired company, or tackling organization-wide strategic change in areas like quality or IT.

   Some very successful organizations, such as Hewlett-Packard, have taken this concept into account by creating matrix organizational structures. These structures attempt to break down silo walls by creating reporting structures for both operational function (i.e., manufacturing, accounting) and market or product (i.e., home office printers, banking industry).

Narrow Your Focus. No successful business tries to be all things to all people.

4. Job Structure

   The way you hire, train, compensate and retain the employees must coordinate with your strategies. For example, if you target commodity customers, you would want to follow one of two hiring policies:

   1. Hire highly skilled people whose skills improve your efficiency.
   2. Hire cheap people who simply cost less.

   You would then want to train people to focus on efficiency and eliminating defects while offering pay systems that reward people for controlling costs. Conversely, if you have a specialty strategy, you may want to look for people who are capable of adding value to your product or service. And you may offer incentives for providing exceptional service and delighting customers.

   A big mistake many companies make is the tendency to use specialty people in places where they should use commodity ones—or vice versa. In a commodity company, this drives costs up, and the potential for added value is lost on the commodity customers. In specialty companies, commodity people and commodity job structures drive value out, which devalues your offering and drives away specialty customers. While it may cost more up-front, never hire a person who fails to fit your strategy. The long-term costs of a hiring mistake will be far greater!

5. Buy-in

   Needless to say, no strategy will succeed without employee support. By providing conceptual tools and communication, the strategy will go a long way towards getting buy-in, but there will always be some people who just won’t buy in to some strategies. In a non-strategic position, it might be possible to overlook a lack of buy-in. But in a strategic position, this can be a real problem, especially when it affects front line positions.

   When you see a lack of buy-in, ask yourself: is this objection valid? If so, re-evaluate the strategy. If not, you’d be best off parting company with the employee as soon as possible. Strategic conflict is a lose-lose-lose scenario. The employee loses by working in an organization where he or she feels conflicted and where opportunities will be limited. You lose because the strategy will most likely fail when executed by people who lack commitment. And customers lose as your organization’s performance falters.

   Getting people to buy into a strategy means, in part, you have to get them to believe in it. Ideally, use employee input in crafting the strategy. At a minimum, make sure the strategy offers clear benefits for your employees—in terms of improved working conditions, increased compensation, new job opportunity, and/or increased job security. It’s much easier to create buy-in when you can clearly show people what’s in it for them.

   Probably the most difficult situation is when you’re in a company that has a lot of employees who are paid at the lower end of the pay scale. Often, input from these people is strategically critical and they have a dramatic effect on the way your products or services are created, delivered and perceived by your customers. Typically, lower paid employees will consider anything management says as suspect. It’s hard for these people to believe that management is on their side. If you face this situation, ask yourself, "How could I be happy paying these people a lot more than they’re currently getting paid?" What would it take? And if you can’t offer pay, you need to offer a real and valuable substitute.

Alignment Equals Success

Our experience has been that companies that take these few simple steps to build alignment between their employees and their strategies find greater success. Clearly, you will find better support for implementation of your strategies and more effective day-to-day use of your strategies at all levels of your organization when you achieve alignment. This will make the difference between struggling to make your vision a reality and smoothly flowing into the future you have defined.