A CEO of a large technology company was confident that their senior leaders had a clear understanding of the company’s strategic priorities, as is the case for 84 percent according to Howwe Technologies analysis tool Assessment™. However, a subsequent survey performed by MIT revealed that only one-quarter of the managers could list three out of five strategic priorities, with one-third unable to list even one. This issue is not exclusive to a specific company, as a study of 124 organizations showed that only 28% of executives and middle managers could list three of their company’s strategic priorities.
In order to improve strategic alignment throughout the organization, there are three critical steps that leaders must take:
1. Recognize the problem
Top executives often assume that the entire company is aligned with the strategy. However, this is usually not the case, as surveys show that executives rate their company higher on strategic alignment than managers lower down the organization.
2. Establish agreement at the top
A lack of strategic alignment often starts at the top. The top team should agree on a single set of objectives for the business, rather than each leader pursuing their own agenda. Many top teams fail to agree on company-wide priorities, resulting in misalignment throughout the organization.
3. Engage the second level
Strategic misalignment often starts at the top, but it doesn’t end there. Alignment continues to drop as you move further down the organization, with the sharpest decline occurring between the top team and their direct reports. Top executives should focus on ensuring their direct reports understand the company’s overall strategy and how their function fits into the bigger picture.
By acknowledging the problem, establishing agreement at the top, and engaging the second level, top executives can increase the odds that their strategy is understood throughout the company, leading to more effective execution.