Today’s Strategic Alignment Journal post in two sentences:
An organization can meet its targets, improve efficiency and execute its strategy successfully while becoming increasingly disconnected from the environment in which it operates. Strong performance may provide reassurance precisely when the organization needs to question whether its strategic direction remains relevant.
Today, I participated in the first round of a doctoral research study examining how organizations can detect early indications of strategic drift. The experience prompted me to consider something that is easy to overlook when evaluating organizational performance.
What if an organization is becoming increasingly successful at doing something it should no longer be doing?
We tend to associate organizational problems with declining performance, missed targets, dissatisfied customers, poor leadership or unsuccessful implementation. These are visible indicators that something may be wrong, and they generally attract attention.
What happens when the indicators are positive?
The organization is meeting its targets. Productivity is improving. Costs are being managed. Employees are developing their competencies. Leadership is executing the strategic plan, and the systems established to monitor performance are reporting encouraging results.
Everything appears to be working, except that the environment in which the organization operates is changing, and the measures being used to assess success may not be capturing the significance of those changes.
When Performance Becomes Reassurance
Organizations establish performance indicators to determine whether they are achieving their objectives. These measures provide structure, accountability and evidence of progress.
But performance indicators are generally designed around decisions already made. They tell us how effectively we are pursuing established objectives, not necessarily whether those objectives remain appropriate.
- A retailer may be improving the profitability of its physical stores while customers increasingly prefer alternative purchasing channels.
- A professional services firm may be delivering its traditional services more efficiently while clients are beginning to value entirely different capabilities.
In both cases, the organization may be performing well against its existing measures and that performance can become a source of reassurance.
When the numbers are encouraging, there may be little perceived reason to question the strategy. When customers continue purchasing, changing expectations may receive insufficient attention. When employees consistently meet their targets, leadership may see confirmation that the organization is moving in the right direction…yet the direction itself may be becoming less relevant.
The Risk of Internal Alignment
We frequently emphasize the importance of strategic alignment, ensuring that people, processes, resources and decisions support the organization’s strategic direction, and rightly so.
But alignment has another dimension that deserves attention.
An organization can be internally aligned around a strategy that is increasingly misaligned with its external environment.
Its people understand the priorities. Its systems reinforce them. Its resources support them. Its leadership makes decisions consistent with them. There may be very little internal disagreement about what needs to be done. The organization is functioning exactly as intended – but what if the intention itself needs reconsideration?
This is where strategic alignment can become problematic when it is treated primarily as consistency of execution rather than continued relevance of direction.
The question is no longer simply whether everyone is moving in the same direction. It is whether that direction still makes sense.
The Questions Our Measures Don’t Ask
One of the challenges with established performance systems is that they can reinforce the assumptions on which they were built.
- We measure what we have decided matters.
- We evaluate progress against objectives we have already established.
- We reward performance that advances those objectives.
Over time, these arrangements can become so familiar that the underlying assumptions receive less scrutiny than the results.
An organization may become exceptionally skilled at answering questions about efficiency, productivity, profitability and execution while giving considerably less attention to questions about relevance.
- What are customers beginning to value differently?
- Which assumptions about our market are becoming less reliable?
- What developments are we interpreting through the lens of our existing strategy rather than examining on their own terms?
- And what are we becoming better at doing that may no longer matter as much as it once did?
These questions do not diminish the importance of performance measurement. They challenge us to recognize its limitations.
Success Is Not Proof of Continued Relevance
There is nothing wrong with improving performance, strengthening capabilities or pursuing excellence. The danger arises when evidence of successful execution becomes evidence, in our minds, that the strategy itself remains appropriate.
Those are two different judgments.
One concerns how well we are doing what we decided to do. The other concerns whether what we decided to do still makes sense. An organization needs the capacity to examine both, because strategic drift does not necessarily reveal itself through immediate failure. It can develop while an organization continues to achieve the very results it has been designed to produce.
By the time declining performance makes the problem undeniable, the distance between the organization and its changing environment may already be considerable.
A strategy can deliver exactly what it was designed to achieve without delivering what the organization now needs.
The challenge is recognizing that strong performance does not necessarily validate strategic direction. It takes deliberate and ongoing examination to determine whether the objectives being pursued remain relevant, even when the results suggest that everything is working.
Strategic Reflection Prompt
What is your organization becoming increasingly good at doing, and when did you last question whether it is still the right thing to do?
I’m Giselle Hudson, The Pre-Fixer™.
For nearly three decades, I’ve worked with business owners and leaders across the Caribbean who carry important decisions largely on their own, often when problems keep returning, solutions fall short, or implementation stalls.
When I ask business owners what problem they can’t seem to solve, the answer is usually “people.” So I ask them to tell me more, because people and businesses are rarely as simple as they first appear.
I help them understand what’s really causing the problem before they spend more trying to fix it. And where needed, I help design the solution and guide their teams to put it into practice.
Get Clarity before the Fix.
What are you trying to make sense of right now?
