Achieving Strategic Alignment.

21 Nov

The main goal of strategic alignment is that every person in the organisation is making choices that re-enforce each others decisions and that everyone is pursuing a common value proposition- “a common way of gaining competitive advantage”.  Maintaining this common view for each strategic scenario can be very challenging to present in traditional formats such as Word documents, PowerPoint or Excel worksheets. Strategy trees, strategy maps and scorecards can assist with this challenge by presenting large amounts of data at once by using visuals.

One way of achieving strategic alignment is though feedback mechanisms such as strategy trees, strategy maps, scorecards and dashboards. These can be useful as they can quickly identify areas that are under performing.

A strategy tree lays out what you are trying to achieve and how you are planning on achieving it. They show strategic objectives, critical success factors and the actions for each critical success factor. This allows everyone to see what the strategy actually is.

Strategy maps have also become popular. These are made up of a subset of objects from the strategy tree. They have become so popular as they only include objectives and the relationship between them.

Scorecards can be critical in successful strategic alignment as they “bind the users to the strategy itself.  They can be very useful as they give visuals of the key performance measures, their direction, key responsibilities and what actions may be necessary. Scorecards can show users how their actions or inactions can effect the alignment of strategy. However just using scorecards will not solve the alignment issue. Failures may occur if the wrong technology is rolled out or if it does not have the support from management. It needs to be as part of a “wider performance management platform” this is so the data will be relevant, consistent, accurate and available when needed. One of the biggest advantages of scorecards is that they can help to support change in an organisation another is ability for enquiry and analysis. This drill down should show the relationship between the performance indicators and measurements such as projects, objectives and goals. It should start to indicate how performance in one area of the business may be affecting performance in another. This can help to show users how their own goals and objectives can support the all over strategy.

The exact layout of the scorecard is usually user definable but as stated by pm1083 (https://sopinion8ed.wordpress.com/2012/11/21/strategy-maps-and-aligning-it-with-strategy/ ) scorecards are usually made up of the following headings: financial, customer, learning and growth and internal business processes.

A dashboard can be very beneficial to a company due to its ability “to instantly communicate performance” for a specified amount of measures in an attention grabbing way. A dashboard should be easy to understand so employees can see straight away the relevant performance measurements to their role to they can assess if the performance is at the necessary level.

A dashboard is often compared to a dashboard inside a car. On it you can see the important information necessary for driving the car e.g. speed, fuel and rpms etc. Similarly to scorecards the information shown is user defined. Usually the dashboard is frequently refreshed to allow for adjustment to the strategy as the external environment changes. Dashboards can be very useful for tactical decision makers and managers that are unused to the hard data such as spreadsheets that are used for most information systems. The ability to view current performance at a glance can be hugely beneficial to an organisation. Dashboards however do not indicate the importance of the mission (as a scorecard would).

In my previous posts I hoped to point out the importance of strategic alignment and here I hope to show different ways that this may be achieved.  I think thestrategicbloggers post on Outsourcing and Alignment (https://sopinion8ed.wordpress.com/2012/11/21/outsourcing-alignment-conundrum/ ) shows the additional difficulties that may be incurred. Some of the items (such as strategy maps, strategy trees, scorecards or dashboards) outlined in this blog may help to try and prevent or correct those difficulties.

Anyone have any thoughts on this? Please leave any comments below!

 

Source: “The Challenge of Strategic Alignment” The role of Scorecards and Dashboards in Strategy Execution. A FSN & Oracle White Paper.

http://www.oracle.com/us/solutions/business-intelligence/064027.pdf

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One Response to “Achieving Strategic Alignment.”

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  1. Recap on the Business IS Strategic Alignment. « So Opinionated … - November 26, 2012

    […] it was still a relevant issue I then laid out possible ways to achieve this strategic alignment (https://sopinion8ed.wordpress.com/2012/11/21/achieving-strategic-alignment/). I then proposed the possible arguments for […]

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