The Leader’s Guide to Strategic Alignment

Hi Reader, it’s Don Culpepper writing here today. Having worked in the field and as an executive in the upstream oil and gas industry for 34 years, I recognize the importance of a strategic plan. Leadership is best described as vision with clarity and it is up to the leaders of any organization to provide a clear vision and line of sight to their organizations.

A good strategic plan should reflect and encompass the essential building blocks of a successful business, meaning people, product and/or service, processes and technology enablement. Knowledgeable business consultants, especially those that have inside industry experience, can be invaluable to executives. 

A boot room to the board room perspective is critical and in my view, necessary. Cynicism around consulting is nothing new and statistics tell us that 70-75% of transformational efforts fail. Many executives have the perception that the primary concern of business consultancies is “landing and expanding” and not actually solving the problems at hand. In many cases, that reputation has in fact been earned by business consultants.

Don working for Texaco in Kuwait, 1996

That said, business consultants who are most successful, take the time to fully understand the relationship and importance of alignment in the organization. Looking at only one piece, eg, operations elements within tactical execution, is not good enough. You can design or improve processes within that view, but they may not be in alignment with the strategic goals and objectives of the respective company’s executive leadership.

If the execution piece is not in alignment, the strategy will not be as successful as it can be and may in fact fail. Therefore, it is critical to establish if alignment is present. If not, it is important to determine where the gaps do exist. Without that understanding, transformational efforts will not be sustainable once the consultants are gone. 

Partnering With the Right Consultant 

Some things to remember if you want to identify consultants that will be the right partner include:

  • Consultants should start small. Consultants should not over-reach or try to “land and expand”. They should start by solving one identifiable high impact issue.
  • Consultants that embrace your culture. Your business already has the capabilities and answers that you need for the issues at hand, but it is the consultant’s responsibility to help bring them out.
  • Enablement. People do not like to be told what to do. At every stage, the right consultant will create and hand over the tools for you and your organization to go at it alone. That is the only way the transformational effort will be sustainable and there MUST be buy in. 

Let’s discuss something very important to organizations and talk about strategic alignment.

Strategic Alignment Within Organizations 

Aligning strategic goals and objectives throughout an organization can be quite difficult. However, when they are in alignment, companies run efficiently and effectively. There are three main types of organizational goals: strategic, tactical and operational. 

Strategic goals and objectives are those made by the executive leadership team in a company. Executive leadership creates the threshold metric targets they would like the company to accomplish relative to their defined strategic goals and objectives. Tactical goals and objectives are those created by middle management. 

‘Strategy is hard — but it’s worth the effort. Execution is hard, but if the strategy is wrong, at best, it’s not worth the effort.’

Mark Chussil

Those in charge of the tactical goals and objectives piece develop action plans on how they can operationally  meet the executive team’s  strategic goals and objectives. Operational staff workers execute the actual strategy created by middle management. 

Middle Management 

Middle management can be very challenging. You have to understand both strategy and tactical execution; in a middle management role, you are a liaison between executive management and the execution team. You are trying to take the strategy developed in the executive community, and cascade it down throughout the rest of the organization. This requires the creation of an execution plan. Middle managers are typically responsible for aligning the executive team’s strategy with a  tactical execution plan. 

Middle management will look at the existing operational processes and define their critical path. The critical path is the sequence of steps determining the minimum time needed to execute a process fully. The goal in defining the critical path is to compress a given operational process such that the process cycle time is reduced and therefore potentially saves time and resources. 

Communication Breakdown 

A breakdown in communication is one of the main reasons goals become misaligned in a company. There is a lack of examination and follow-up for what tools are being used operationally to align strategy and execution. The importance of strategy and tactical execution cannot be understated and are represented in the graphs below (Exhibit 1, Exhibit 2).  

Exhibit 1

Exhibit 2

A management system consisting of meetings, reports and Key Performance Indicators is paramount to the success of alignment in the organization. The management system is the platform that brings awareness to just how the organization is actually performing against defined targets. It allows corrections in direction to be made on a short interval control basis. Effective communication within the context of a management system is vital to aligning goals and objectives. 

 Because email is the number one way people communicate in companies, there can be a gap between what is written, and what is understood by the receivers of the email. About 90% of messages are conveyed nonverbally, so sending solely textual email/messages leaves the communication open for many different types of interpretations.  An email sent out by leadership that is not followed up on to make sure everyone on the team understands the meaning as intended by the leader, can potentially and quite frequently does lead to problems within the organization. Here are a couple of ways that leadership can help with  communication challenges: 

  • Create  meaningful KPIs. These will help guide you and your teams to make sure you are meeting your goals and objectives. You should also have visibility around these Key Performance Indicators to bring an awareness to everyone concerned. Having a reliable Management System in place addresses awareness and is critical. Remember, you cannot manage what you do not measure. 
  • Use data correctly. Some companies either do not  collect data, use only partial data sets, or are unable to interpret the data in meaningful ways. If you cannot  interpret and relate data patterns that may be present to your strategic goals and objectives, you likely will not have reliable KPIs. Many companies will utilize the help and expertise of business consultants to help them achieve their business goals by coaching and teaching business leaders on how to utilize their own data. 

Strategic Goals

To achieve strategic alignment, executive leadership should create SMART strategic goals and objectives. SMART is an acronym that stands for specific, measurable, attainable, relevant, and time-bound. If any of these 5 elements are missing, you may find your goals are difficult to execute. Upper level management can delegate more power and flexibility to tactical and operational managers by: 

  • Giving more authority  to make decisions (cutting out the red-tape). 
  • Encouraging collaboration between mid-managers and operational leaders by co-creating goals. 

Upper level management must define what resources are available and clearly communicate what the strategic goals and objectives are. If the leadership does not provide clarity, it may lead to operational fatigue. Having a clear strategy can help with this by providing direction, aligning the right workers with the right roles and responsibilities, and clarifying available resources. 

People want to be connected to something they believe in and clearly understand. By giving mid-level managers the ability to define and create their own goals, they will be more familiar with the operational culture of the people they work with daily. 

Meetings, reports and  KPI’s, which are the key elements of the management system, can enable  managers  to communicate early and often with executive leadership relative to  any obstacles and challenges that may be present. These obstacles and challenges can then be addressed in a very timely manner.

When Companies Need Help

Many companies utilize the expertise of outside help. Business consultants, such as GDC Consulting LLC, help businesses reach their company goals. Companies that perform well typically exhibit happy and highly productive employees who are allowed  to be creative and make their own decisions. 

Utilizing brainstorming sessions is a key tool for idea creation. With a brainstorming effort, nothing is off limits, and it will help with employees’ creativity. It will also help with prioritizing value creating opportunities. Initially, you do not need to analyze the ideas generated. This would only stagnate creativity. After all ideas are generated, then you can analyze them based on goals and resources available and prioritize them accordingly.

The Bottom Line

Companies are challenged everyday with aligning strategic, operational, and tactical goals. When these 3 areas are misaligned, it can lead to worker fatigue, inefficient output, and missed opportunities. With the help of  business consultants,  companies can ensure alignment throughout any organization. 

The Energy Transition GDC Consulting LLC Podcast

The energy transition from fossil fuels to renewables is one that will be disruptive and at times chaotic. Read our Energy Transition blog post. 
  1. The Energy Transition
  2. Strategic Alignment
  3. The Great Wealth Transfer
  4. The Bridge to Renewables
  5. Oil And Gas Commodities Market

References in article:

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