Creating Alignment: Where to Start
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.
In order to create alignment in the organization, the financial plan needs to be translated down through the organization, so that every individual knows how the things that they are doing day in and day out affect the overall goal of the company. To illustrate the point, here is an example.
I ran a division of a large, construction company. When I took it over, we had a goal to increase our revenue by 15%. When I asked our Director of Sales how we were going to get there, you would have thought I had two heads.
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.
You can’t align your business if the people in your organization don’t know where you’re going and how to get there.
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