More than 30 years of Harvard Business School research has shown that aligned and integrated companies outperform their nearest competitors by every major financial measure. The organizational effectiveness that derives from alignment is a significant competitive advantage.

What do we mean by alignment?

Alignment is that optimal state in which strategy, employees, customers, and key processes work in concert to propel growth and profits. Aligned organizations enjoy greater customer and employee satisfaction and produce superior returns to shareholders. Aligned companies focus employees and their work on key goals. They de-emphasize hierarchy and distribute leadership by apportioning authority, information, knowledge, and customer data. In an aligned organization, every employee -- from the executive suite to the loading dock -- understands not only the strategy and goals of the business, but also how his or her work contributes to them. Everyone can articulate what the needs of customers are and what his or her unit must do to satisfy them. According to Fred Smith, the chairman of FedEx, "Alignment is the essence of management."

Admiral Vern Clark, the chief of naval operations (CNO) for the U.S. Navy, concurs: "Better alignment enhances mission accomplishment and reduces costs through organizational and process efficiencies. ... When an organization is aligned, everyone from junior to senior shares an understanding of the goals and purposes of that organization, allowing them to contribute to their fullest. ... Aligning our organization is an ongoing effort that involves continual assessment of processes and systems."

World-class companies facing today's challenging business environment are recognizing that they, too, need to focus on organizational alignment to achieve their objectives. Exhibit 1 shows the four competencies necessary to attain alignment. First, the organization must be able to rapidly deploy new strategies (with an emphasis on "rapidly"), because goals and priorities are always changing. Second, it must achieve total organizationwide customer focus. Third, it must align and improve core processes to meet customer requirements and drive strategy. Finally, it must train, develop, and manage employees to foster innovation, productivity, and growth.

Why Emphasize Alignment?

Alignment isn't a new idea or way of looking at organizations. Rather, it's one of the fundamental characteristics of organizational life that businesses perennially rediscover. This is clearly one of those times in which it's resurfacing.

Throughout the last decade, we have seen both commercial and noncommercial organizations concentrating on a variety of strategy-related concerns. But we now find that alignment itself, for many organizations, is taking center stage. That's because after organizations develop a coherent way of working, succeed in getting closer to their customers, refine their processes, and engage their employees, they're finding that the payoff isn't as great as they had hoped. The reason is that unless managers constantly ensure that the parts of the enterprise are working in concert, in an ongoing cycle, with one another -- that customer input is linked to strategy and process improvement and that strategy is deployed to employees capable of executing it -- their efforts to improve efficiency will fall short. Efficiency initiatives will also miss the mark unless managers eliminate cultural barriers (such as a turf-driven mentality) and develop leaders who can continuously create the alignment that is needed.

A focus on alignment, however, doesn't denigrate actions related to strategy, customers, employees, and processes. Just the opposite: A focus on alignment enables organizations to more fully capitalize on strategy. What must also be kept in mind is that alignment, like any kind of health, isn't a state of static perfection -- it's a constantly changing condition. What is perfect alignment in one environment is misalignment in another. Since the environment changes often and unpredictably, alignment is a constant process. In their book "Built to Last," Jim Collins and Jerry I. Porras note, "Attaining alignment ... is a never-ending process of identifying and doggedly correcting misalignments that push a company away from its core ideology or impede progress." That's the context in which organizations need to understand the measurement and assessment of alignment.

The Power of Measurement

The old axiom that you can't manage if you can't measure is never truer than in the context of alignment. The center of the alignment model is leadership and culture -- and underlying culture is measurement. Measurement drives behavior and behavior, in turn, creates culture. New Web-based technologies now exist that enable senior executives to quickly and frequently assess the state of alignment within their organizations. Using easy-to-understand graphic displays, managers can identify areas of best-demonstrated practice and pockets of misalignment.

The U.S. Navy, for example, has used alignment measurement extensively both in battle groups, as they deploy for combat, and shore-based operations. Their experience shows that providing leadership at all levels with information on the state of alignment within their areas of responsibility permits them to take action in a focused and targeted way. The Navy's Web-based alignment-measurement system was developed by ODI and Genesys Solutions LLC. It combines data-analysis capabilities with tools that can create colorful, easy-to-understand graphics and incorporate video presentations. It also permits the capturing of responses to open-ended, qualitative questions from any or all segments of an organization's population.

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