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The Best Companies Are The Best Aligned

FLI start upOne question that challenges all business leaders – from multinationals to small scale start-ups is how to create and sustain a winning organisation. The key, according to new research from Jonathan Trevor, Associate Professor of Management Practice at Saïd Business School, University of Oxford is to ensure the company is strategically aligned – arranging all elements of an organisation to optimally support the fulfilment of its long-term purpose.

Working alongside Barry Varcoe, Global Head of Group Services in Group Operations and Technology at Zurich Insurance Group, Professor Trevor found that strategically aligned organisations are higher performing and better capable of achieving their goals. ‘Business strategy receives the lion’s share of attention from senior executives. But it is not enough to have a winning strategy alone,’ said Professor Trevor. ‘Businesses nee

d to have a winning organisation too and ensure systematic management of their organisational culture, structure, processes and people in the pursuit of a company’s purpose.’

In an article published in Harvard Business Review, Professor Trevor proposes a simple way for business leaders to test a company’s strategic alignment by considering just two key questions:

1. How aligned is your business strategy to your organisational performance?

Purpose is what the organisation is trying to achieve. Strategy is how the organisation will achieve its purpose; the products and services offered, the markets served, and how an organisation positions itself against competitors. Using a scale of 1 – 100, ask how well does our strategy support the fulfimment of our organisational purpose?

2. How aligned is your organisation to your business strategy?

Organisation includes all of the required capabilities, resources (including human) and management systems necessary to implement your strategy, and this should flex in step with the strategies served. Using the same 1 – 100 scale ask: how well does our organisation support the achievement of our strategy?

‘By plotting the answers onto a simple framework, we can identify four broad states of strategy alignment that each pose a different leadership challenge,’ continued Professor Trevor. ‘Those that have highly effective strategies for fulfilling their organisational purpose alongside highly effective organisations to achieve their strategies have the very best chance of winning against rivals, while at the other extreme organisations with strategies unable to fulfil their purpose are not long for this world.’

Source: University of Oxford

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