The best performing companies are often the best aligned. But who in your company is paying attention to how well aligned your strategy is with your organization’s purpose and capabilities? In my research and consultancy with companies, I observe that, oftentimes, no individual or group is functionally responsible for overseeing the arrangement of their company from end to end. Multiple different individuals and groups are responsible for different components of the value chain that makes up their company’s design, and they are often not as joined up as they should be. All too often, individual leaders seek — indeed are incentivized — to protect and optimize their own domains, and find themselves locked in energy-sapping internal turf wars, rather than working with peers to align and improve across the entire enterprise.
Most executives today know their enterprises should be aligned. They know their strategies, organizational capabilities, resources, and management systems should all be arranged to support the enterprise’s purpose. The challenge is that executives tend to focus on one of these areas to the exclusion of the others, but what really matters for performance is how they all fit together.
Consider McDonald’s. What does it take to be able to serve over 1% of the world’s population — more than 70 million customers — every day and in virtually every country across the world? Fanatical attention to the design and management of scalable processes, routines, and a working culture by which simple, stand-alone, and standardized products are sold globally at a predictable, and therefore manageable, volume, quality, and cost. Maximizing economies of scale lies at the heart of McDonald’s product-centric business model. Efficiency is built into the design of its winning organization in