In this series, we are discussing aligning employees with strategy. Lets review how we get this alignment. There are five basic steps that you must take to assure 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.
Let’s look at the First and Second of these requirements in more detail.
First, strategic alignment can only work if the employees already have the tools required for good strategic thinking
This is because employees must be capable of making decisions with strategic impact in order to be aligned with the company’s strategy. Anything less than this calls for a strategy that treats people as machines. Although these strategies were the foundation of the industrial revolution, they cannot work in places where labor costs are above the absolute minimum. These tools include examples, role models, and training. This does not mean that every employee needs to be a great strategic thinker. Employees, however, must be able to understand how their work fits into the success of the organization.
Make sure your people understand enough of the basics of business
Another thing to do to get people on board is to make sure your people understand enough of the basics of business. Employees need to see how the strategy is going to make them better off, increase their job security, increase the likelihood that they get promotions, and increase the likelihood that they see pay increases in the future. 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.
The second item, understanding the strategy, can only happen if employees have the conceptual tools covered in the previous paragraphs
This is necessary because good strategy requires focus. 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.). In a strategically focused organization, there are fewer ways to satisfy the customer. In simple terms, a company that targets specialty customers will excel in quality and/or service, but will likely be middle of the road or worse at price. Commodity companies excel at price, usually fall down on quality or service, and sometimes both. “Front line” employees – those that have contact with customers – often want to please customers by offering satisfaction in these three ways, but to fit with the focus of the company usually should be willing to leave some customers dissatisfied (for example, a Rolls-Royse salesperson should not get upset that a customer didn’t buy because he/she did not like the price). Without a clear understanding of the strategy, this kind of alignment is impossible, especially when “front line” employees are far removed from the strategic planning process.
Note: This post is the second in a series of posts from Robert Bradford’s article Building Support for the Strategic Plan: Aligning Employees with Strategy originally posted in Compass Points in October 2001. The first post introduced this series. You can read it here. The next post in this series will discuss the Third and Fourth steps.
How well are you aligning your employees with your strategy? Attend the Simplified Strategic Planning Seminar for more instruction on how to improve your alignment as well as all other aspects of Simplified Strategic Planning.
© Copyright 2018 by Center for Simplified Strategic Planning, Inc., Ann Arbor, MI — Reprint permission