Stategic Alignment Business Cases

The impact of strategic (mis)alignment is demonstrated by the striking difference in performance between some of the largest corporations in the world. The market in which they compete is the same, their chances are the same, and still some thrive and others don't. Read more about why that is...

The Rise of Southwest Airlines

 

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Southwest Airlines is probably one of the most striking examples of a company that (a) defined a very clear and simple key business purpose, (b) chose the right business model to support the business purpose, and (c) consistently demonstrates the core values and behaviors derived from that key business purpose.

The brand promise of Southwest Airlines is 'Dedication to the highest quality of Customer Service delivered with a sense of warmth, friendliness, individual pride, and Company Spirit'. Every single employee of the company is aligned with this brand promise, and in spite of the current economic turmoil in the airline industry Southwest's performance in 2008 was among the best in the industry. Staff morale is exceptionally high. Read more...

The Demise of Northwest Airlines


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Northwest Airlines is the striking opposite, and an example of a poorly aligned organization with low staff morale, occupied in a constant struggle against bankruptcy. Northwest's brand promise is 'Safety. Reliability. Comfort. Fairness. Courtesy. Honesty', followed by a page long sum up of promises of which very few are made true to customers. Employees don't seem to be involved in the brand promise, and everyone who has traveled with Northwest can account for the personal indifference and the lack of fairness and courtesy many of the staff demonstrate. Read more...

The Rise of Toyota

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Toyota is another benchmark example of a company with excellent strategic alignment. In spite of its size and complexity Toyota has managed to keep its strategy, organization and people perfectly aligned with its main purpose: pursuit of harmonious growth and enhancement of profitability. Toyota is driven by this corporate purpose, and the purpose is clearly understood and internalized by its senior management and employees. At Toyota employees are continuously trained in 'The Toyota Way', and a continuous and overall attention for product quality and cost awareness becomes an almost religious way of life for everyone in the organization. Read more...

The Demise of General Motors


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Everybody knows the fate of GM. What does strategic alignment have to do with the demise of the once largest automobile manufacturer in the world? Everything! When the purpose and brand values of your company aren't clear, there will never be a clear strategy. Whithout a clear purpose and strategy people do not focus, and are not be able to identify with their brand and what it stands for. GM's internal organization has been stifled by bureaucracy for decades, its production has been hampered by strikes, and its marketing has since long lost track of the developments in the outside world where car buyers have continuously been disappointed by the failing reliability and lack of fuel efficiency of the GM cars they bought. Read more...

So what does this tell us about Strategic Alignment?

Strategic alignment is about aligning your strategic goals, business processes and company culture with your 'key business purpose'. Your key business purpose (= why are we here?) is the main input for defining your 'brand values' (= which are the values and behaviors in line with our purpose?), which provide the input for your 'brand promise' (= what do we promise to our customers?). Your 'strategic goals' (= what do we want to achieve?) tell about the achievements you wish to make, and how you will deliver on what you promise to your customers. Of-course your 'business processes' (= how do we want to achieve it?) must be lined up; your organization and processes must be made ready to deliver in compliance with the values and behaviors you have defined. And last but not least: your people must live these values and behaviors to make it all true, and that is exactly where it eventually went wrong with Northwest Airlines and GM.

And what about your customers? Of-course strategic alignment makes no sense without deeply involving your customers. How else could you define your purpose? In A.S.A.P.™ we always involve your customers, but only after analyzing and aligning your product and customer portfolios. Because it is without saying that you must always focus on the right customers.

Southwest Airlines and Toyota are examples of enterprises that pay a lot of attention to proper strategic alignment, Northwest Airlines and GM are clearly misaligned. The problem with misalignment is that it requires an enormous and often painful effort to realign. Strategic alignment should be on every manager's mind all the time.

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