Strategic Alignment Demands New Skills
The Pace of Change Is Relentless. Are Your Leaders Ready?
Ed Barrows | July 2018
The world in which many organizations live is shifting so fast that there’s almost no time to adapt key projects. But it must be done. The question for leaders is how?
In July, Sears, one of the oldest and best known retailers in the United States, announced it will start selling one of its flagship brands, Kenmore, online though Amazon.com. A month prior, Amazon announced its plans to purchase Whole Foods. At the same time international discount grocers such as Aldi are driving major share gains that are estimated to rise to half of the overall market. How is it that so much change is happening across so many industries in such a compressed period of time?
The simple fact is the world in which organizations live has become frantically fast-paced, and highly volatile. In a recent CEO survey, 64% note that their businesses are more volatile, uncertain and complex than in the past with 79% noting that complexity growth would increase in the future[i]. This increase might explain the decline in corporate life expectancy. In 1960, a company could expect to spend 61 years on the S&P 500; today it will likely be gone in just 18[ii]. Senior leaders are all too aware of the challenges they are operating in today and of the need to constantly play catch up. This might explain why 96% of organizations are currently engaged in some form of corporate restructuring[iii]. Falling behind competitively has truly become a matter of life or death.
But unlike ongoing operations which require management of established processes, transformations are driven by wide scale change. Change of this kind is powered by strategic projects. Strategic projects typically cut across many functions and units within an organization. They require clear alignment between the projects, many deliverables and the company’s overall strategy. It is up to the various project teams and project leaders to maintain this alignment at the same time the project plan is being executed efficiently. Unfortunately many senior leaders don’t have confidence that their project teams have the skills necessary to successfully complete these initiatives. In fact 81% note leadership skills as most important for the successful navigation of complex projects but they worry these skills aren’t resident in their mid-level leaders[iv]. It’s true that managing projects will always require mastery of fundamental project management skills. But what’s needed are the leadership skills critical to driving progress and maintaining alignment while being flexible to changing conditions surrounding the organization. How can top leaders ensure their work force has the right skills they need today to be successful? The answer lies in helping leaders of projects improve the ways they work vertically and horizontally within the organization.
For most leaders alignment means the way corporate priorities are communicated and translated vertically through the organization. This entails taking strategies and breaking them down into component parts that can be passed down and understood by each successive level within the organization. An important process to be sure. But often the cascading process stops once the information is passed down to lower levels. What’s missing and what confounds project alignment is communication back up to senior leaders telling them what’s working and what isn’t on the front lines. Project leaders need to not only be able to see where strategies are not working and what’s causing the problems, they need to be able to provide feedback to top leaders in a way that improves upper management’s understanding of execution. This requires project leaders possess the skills to manage critical stakeholder relationships. Mid-level leaders must communicate with candor and sensitivity all while driving project progress and maintaining strategic alignment. This kind of diplomacy can be learned but for many managers it’s not something they focus on in their leader development.
In addition to vertical alignment—top down and bottom up—organizations can improve project performance by understanding how well they create alignment horizontally across the organization. When surveyed, over 80% of managers say they can rely on their bosses or direct reports in accomplishing tasks central to project execution[v]. However only 9% of managers say that they can rely on peers in other functions and units all the time. In major strategy projects like a transformation, much of the work is cross-functional in nature. Thus low levels of efficacy in creating horizontal alignment will hamper execution at a time when it is needed most. To be effective horizontally in organization, mid-level leaders need to be able to persuade and influence their cross business peers when they do not have direct authority. Similar to diplomacy, influence and persuasion skills can also be learned with practice and their importance to project and organizational success cannot be overstated.
The pace of change is unlikely to relent any time soon. What’s needed to drive strategy project, transformation and organizational success isn’t more focus on creating and cascading clearer messages from the top. What’s required is a cadre of leaders with the skills and mindset needed to manage critical relationship and effectively influence their peers. Maintaining vertical and horizontal alignment necessitates it. Like today, in tomorrow’s turbulent world, success will accrue to those firms who have a cadre of leaders ready to adapt and accelerate the organization.
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[i] IBM Global CEO Study, Capitalizing on Complexity, 2010
[ii] Innosight, Richard N. Foster, Standard & Poors
[iii] KPMG Transformation Study, 2016
[iv] IBM Global CEO Study, Capitalizing on Complexity, 2010
[v] Sull, Don, et al, Why Strategy Execution Unravels—and What to Do About It, Harvard Business Review, March 2015