Two years prior to being elected President of the United States, Abraham Lincoln spoke before the Illinois Republican State Convention. During that speech he echoed a sentiment found in the Bible. He declared, “A house divided against itself cannot stand.” Lincoln, of course, was talking about the country which, at that time, was part free and part slave-holding. Whether you are talking about a country or an organization, that aphorism holds true — which is why corporate alignment is so important. Reed Deshler, the Organization Design and Change Leader at AlignOrg Solutions, explains, “By definition, an aligned organization is one that optimally syncs the work, structure, metrics, people, rewards, culture, and leadership to strategy. It seems intuitive enough, but those who have spent any time trying to align or realign organizations realize that alignment work can be time-consuming and politically-charged, yet exhilarating and fulfilling.”[1]

The Importance of Corporate Alignment

Andy Rice, a Principal and Lead Strategist at Black Box Consulting, likens an unaligned enterprise to the molecules that make up solid objects. He explains, “Molecules are always moving: rushing around, slamming into each other, changing directions constantly. Even an object that appears completely still contains chaos inside of it. But all of that random motion cancels itself out, leading to the stationary surface we see.”[2] Without corporate alignment, he insists, “A company can mirror this all too closely. Employees are working away, but there’s no alignment to direct all that energy. They wind up bumping into each other, doing the same thing two different ways or even working against each other. There’s a lot of kinetic energy, but no net result.” On the other hand, Deshler insists there are at least ten benefits enterprises can enjoy if they are aligned. They are:

1. Increased speed in decision-making.

2. Better employee engagement.

3. Fewer wasted resources.

4. Improved self-governance.

5. Less customer confusion.

6. Increased leadership credibility and respect.

7. Greater resource visibility.

8. Better optimized talents and skills.

9. Safer risk-taking.

10. A more dynamic culture.

Corporate alignment starts at the top. If you can’t get executives aligned, you have no chance of aligning the rest of the organization. Yet, according to Boston Consulting Group (BCG) analysts, getting executives aligned can be difficult. They write, “For many companies, uniting leaders to carry out the organizational agenda is a struggle. Even before COVID, management had a hard time getting on the same page and pulling in the same direction, and leading remotely only made things more difficult. … To drive performance and innovation, leaders across the organization must be crystal clear about strategic priorities — and about translating them into action in a coordinated way.”[3] Alignment is especially important when transforming Industrial Age organizations into Information Age digital enterprises. They report that a survey of 3,000 senior leaders found, “Transformations in which leaders were unified on the rationale and goals were 77% more likely to be successful than those in which leaders had less cohesion.”

Improving Corporate Alignment

Lora Cecere, Founder of Supply Chain Insights, insists that corporate alignment is often overlooked, regardless of how important it is. She insists the larger the company the more difficult alignment becomes. “My observation,” she writes, “is that large companies have a more difficult journey to drive organizational alignment, than smaller companies. This gap grew over the last decade. Companies became less clear on the definition of supply chain excellence and how to implement decision support technologies. As a result, planning teams and functional organizations became more insular and self-serving. In my research, I find that the lack of alignment has a direct impact to value (operating margin and market price to book value).”[4] To improve corporate alignment, executives should start by improving their planning processes and their decision-making.

As Cecere notes, planning teams can often become insular. As I noted in a previous article, “Planning and optimizations can be done in many departments within a business, such as supply, manufacturing, distribution, warehouse, transportation, budget, labor, and so on. Often, departmental planning functions are disconnected from one another and may have conflicting goals.”[5] Cognitive solutions, like the Enterra Revenue Growth Intelligence System™ (ERGIS™), can perform holistic optimization incorporating an enterprise’s strategic revenue components into one comprehensive optimization. This unique approach balances the goals and constraints of an organization’s strategic revenue goals and business strategies into a global objective function and optimization.

When it comes to decision-making, Cecere observes, “Now is a great time to … improve organizational alignment and the organization’s capability to make decisions effectively in times of demand and supply variability.” Deshler adds, “Indecision can cripple productivity, cause missed deadlines, and create ripple effects across an organization. Organization alignment provides greater clarity around who holds the decision rights in the organization for each work activity. Aligned organizations result in quicker decisions and reduced time to execution. Organization alignment also allows employees to focus on performing work rather than on figuring out who is supposed to do what and who needs to be consulted when making decisions.” In fact, in an aligned enterprise, some routine decisions should be made autonomously. Which is why Enterra Solutions® is focusing on advancing Autonomous Decision Science™ (ADS®). ADS is the next step in the journey beyond data science. Using ADS, the machine plays the role of the data scientist or subject matter expert to help optimize decision-making and help enterprises run at the speed of the marketplace. As a result, enterprises can make decisions that take advantage of market opportunities as quickly as possible.

Concluding Thoughts

The Center for Management & Operational Effectiveness (CMOE) staff emphasizes, “The importance of organizational alignment can’t be overstated. When leadership teams and business functions are effectively tuned in to the same frequency, they become a collective force of motivated, accountable individuals who are capable of significant increases in business results.”[6] On the other hand, they note, “Without organizational alignment, the infrastructure of the company can become misguided, chaotic, and aimless. Even when long-term goals are present and clearly defined, the operational challenges and problems of how teams and departments go about obtaining those goals can easily become siloed, flawed and counterproductive.” Cecere agrees. She notes, “In the absence of alignment, organizations face chaos and political gaming.”

Pursuing corporate alignment is a constant challenge. Deshler explains, “It is difficult to achieve perfect organization alignment; however, the better aligned the organization the more [benefits] you can realize.” BCG analysts add, “Competing today calls for greater agility, less bureaucracy, and more-distributed decision-making. To realize these strengths, company leaders need to row in the same direction, anticipating and navigating rough seas and shifting currents. This can only happen when they are unrelenting in their efforts to unify leaders and spur them into action.” In Lincoln’s “house divided” speech, he concluded, “I do not expect the house to fall — but I do expect it will cease to be divided.” CEOs should adopt that sentiment as a motto.

Footnotes
[1] Reed Deshler, “10 Benefits of an Aligned Organization,” AlignOrg Solutions, 15 December 2020.
[2] Andy Rice, “How to Use Strategic Alignment to Harness Your Company’s Full Power,” Betterworks,
[3] Robert Werner, Henning Streubel, Deborah Lovich, and Joseph Halverson, “When Leaders Say They Are Aligned—But Aren’t,” Boston Consulting Group, 8 December 2021.
[4] Lora Cecere, “Organizational Alignment: Overlooked, but So Important.” Supply Chain Shaman, 15 December 2022.
[5] Stephen DeAngelis, “Supply Chain Planning in a Post-S&OP Era,” Enterra Insights, 11 October 2022.
[6] Staff, “Organizational Alignment,” Center for Management & Operational Effectiveness.