Wednesday, 17 December 2014

Alignment Has Not Been A Cheap Investment

Authored by Mickey North Rizza

Organizational alignment isn’t as easy as it sounds. Businesses are made up of functions, in theory, all working to meet the business objectives of increased shareholder value. “In theory” is at the heart of alignment. While the Board and C-Level executives are focused on increasing shareholder value, the organization may not respond in a synchronized fashion to meet the objective. Herein lies the problem: alignment to the overall business goals.

Alignment is simple to understand but hard to achieve. Business strategies and plans are typically great tools for companies to align around, however different leaders and functions may have different drivers and needs to meet the goals, may use different data or even have different definitions; all reasons for misalignment.

Companies have struggled for years to break through the alignment issues to bring more value quickly to the business; however, it has not been a cheap investment. Recent conversations with Procurement executives found an initial consulting investment of just under a million to several million dollars to secure a baseline assessment of the businesses’ alignment problems, and several million dollar more per year for several years to improve from the established baseline.

The point is alignment hasn’t been cheap. The assessment can be expensive and alignment remediation efforts and starting down the path towards greater value contribution can be just as much money. However, the return on investment is worth it for the business to pursue. So how does one pull cost out of alignment and achieve true business value? To optimize the business processes to achieve alignment.

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