Profitability pressures are relentless, and operational leaders are often asked to dig deeper to improve margins. Cost reduction initiatives are perennially high on CEO agendas, and more than three-quarters of global CEOs are planning on transforming their organizations. Yet nearly half believe that their organizations are unprepared to successfully execute. While leadership has confidence in the strategic path forward, far fewer believe that their people understand how to drive the changes required to succeed. Failure to align all business units, processes and functions around a coherent, unified strategy can result in cost inefficiencies, dissatisfied customers, disrupted supply chains, and diminished value. The path to success is often blocked by an alignment gap -- an unclear case for change, inattention to critical capabilities, failure to promote necessary behaviors, and a lack of management information.
Aligning the organization and your people to strategy is the essential starting point in making systemic changes to cost structure and profitability. Achieving alignment is not easy, however -- no matter how savvy the leadership team. But there is a successful model for closing the alignment gap and realizing the full potential of your strategic vision. Leading companies fill the gap by addressing the underlying operating model itself – the people, process, organization and technology. Operating model breakthroughs may involve reconfigured product portfolios, channels, supply chains, suppliers, geographic footprints and organizations. Leading companies also clearly communicate priorities and trade-offs to the rest of the organization informing day-to-day decision making. They tie business and individual performance goals to key strategic success metrics. They account for all risks associated with the strategy and execution of it. And they seek to embed specific behaviors that are most critical to realizing the strategy.