Does it sometimes seem like everyone in your organization is doing their own thing and not aligning on strategic objectives? Are there members of your leadership team who openly disagree with decisions that are made? Strategic disagreement has a cost. Not only is there a financial cost to a lack of alignment on organizational strategy, but it also creates confusion and frustration, results in conflicting goals, and can paralyze progress when leadership is unable to make clear decisions to move forward.
BMW, for example, experienced the high price of misalignment, which cost the German manufacturer approximately $10 billion. While not every organization will have such a hefty price tag for strategic disagreement, it can cost a company up to 25% of its revenue. The hidden costs of strategic disagreement include confusion in the organization, conflicting goals that decrease internal resources, and tension within executive teams.
The emotional cost of tension within executive teams can result in goals being sabotaged by leaders who work against strategic objectives. To make matters worse, without a clear business strategy, you can't develop a talent strategy. The 2022 State of Talent Optimization Report found that only 38% of companies have a talent strategy. Imagine you're on a sports team with the goal of winning. But what happens if you don't have a plan for how to use your team to get there? Without a talent strategy, you leave business results to chance.
Talent strategy impacts how you develop employees, make new hires, establish and maintain company culture, and structure your organization to support your business strategy. But without a clear business strategy in place, none of these important people decisions can be made. As a result, your talent may not be aligned with your business strategy, and your objectives may fall flat.
The 2022 State of Talent Optimization Report also found that senior leaders spend an average of 61% of their time on people problems. Imagine the progress that could be made if that time were allocated to more strategic work.
So, how do you align leaders on strategy?
In our experience, executive teams, before we help them get to alignment, agree on no more than 70% of the strategy, sometimes only 50%. Before any strategy can be implemented, it must be agreed upon. You can't solve strategic disagreement until you measure it. Using simple tools, such as our PI Strategy Assessment, you can measure the degree of agreement on strategy among any team. It's critical to use data to drive this consensus. That data should consist of two things: which strategic activities senior leaders believe should be priorities, and how confident leaders are in the organization's ability to execute that strategy.
Once you have the data in hand, you can start to look at where there's disagreement and where leaders are aligned. A combination of analytical software and experienced facilitation can bring the executive team together to systematically and thoughtfully get to agreement on strategic goals. In addition to alignment on strategic objectives, you also want to be mindful of confidence levels. If leaders are aligned on strategic initiatives but have low confidence in their ability to achieve those goals, you must create a plan to address that gap before you can execute.
With a clear strategy, results can more easily be achieved. Call Straightline Consulting Group, an expert on strategic alignment, to help your organization achieve alignment and avoid the cost of strategic disagreement.