Creating Alignment: Where to Start
Align your KPIs and Ramp Up Your Business Results
In order to bring about that often sought after, but rarely achieved, alignment of a business, you need to start by aligning the numbers. Aligning the numbers begins with having a clearly articulated financial plan for your company.
In order to create alignment in the organization, the financial plan needs to be translated down through the organization. Every employee and business leader needs to know how the things that they are doing day in and day out affect the overall results of the company.
To Accelerate Business Performance, Details Matter
I once ran a division of a large, construction company. When I took it over, we had a business goal to increase our revenue by 15%. When I asked our Director of Sales how we were going to get there, I was given a puzzled look to my question.
He said, “What do you mean? We’ve got three new initiatives and our sales people are doing eight sales calls to potential clients every week.”
I said “Can you show me specifically how and when those three initiatives are going to generate 15% more revenue? Or are we going to be more effective and win 15% more bids than last year? Or are we going to raise our price by 15% and keep our win ratio the same? Or is the market going to grow by 15%? Or are we going to do 15% more sales calls than last year? Or is it some combination of all of these that is going to lead to us generating 15% more revenue?”
That same puzzled look crossed his face, but this time it was because he didn’t know the answer to the question, but realized that he should. The Sales Director needed to understand what was going to change in order to increase our topline revenue results.
Now take this scenario and ask yourself: for all of the departments in your organization, can your staff tell you what their individual and departmental metrics are, and how they impact the company’s budget? More specifically, can they say that if they were to do 1% better what that means to the bottom line of the business? I would bet against this being the case every time.
Focus All Teams on a Single Corporate Goal
To align the numbers creates situations where a department feels like they are winning but the business can still be missing its financial plan (or vice-versa). If all departments are not aligned towards a single corporate goal and people in those departments do not understand how their work contributes to this bigger goal, you can create those dreaded silos that so many business leaders spend time breaking down.
Although the company may have departmental goals, they often cannot be achieved without negatively affecting other departments. All the different teams and individual team members need to be rowing in the same direction towards the same singular goal, while not achieving their goals to the detriment of others. This means that teams need to understand how this could happen and ensure that it doesn’t.
You can’t align your business for performance if the people in your organization don’t know where you’re going and how to get there. Your employees need to not only know the goals you’re trying to achieve but also create a plan that creates ownership and accountability.
Want to learn how to create real change in your organization? Download a free copy of our 52 Opportunities for Improvement ebook. It outlines targeted areas to improve performance in any business or industry.
Or book a free 30-minute leadership session with Andrew and learn how to better align leaders in your organization and improve organizational performance.