Alignment among the executive team is critical to company performance and strategy realization. It’s the foundation of organizational alignment—ensuring everyone is directing their efforts toward the most valuable ends.
In an exclusive research study by Integrated Project Management Company, Inc. (IPM), senior executives noted that executive alignment drives better decision-making, fosters a collaborative culture, strengthens competitive advantage, and helps them execute strategies with greater precision. Likewise, a 2021 survey by Boston Consulting Group found that when leaders are unified on the rationale and goals of transformations, those transformations were 77 percent more likely to be successful.
In IPM’s study, executives who say their company is fully aligned are three times as likely to report increasing revenue than those who are not fully aligned.
The Benefits Don’t Just Hit the Bottom Line
On a recent engagement at a healthcare company that was working to improve collaboration on its leadership team, IPM consultants witnessed a boost in company morale. There was less battling for resources. Employees knew what the priorities were, thus what they should be working on. Executive alignment brought order to what had been chaotic.
Indeed, executive team alignment is fundamental to creating Organizational Convergence®, a state achieved when employees are integrated optimally to merge their skills, experiences, aspirations, and emotions to contribute to the company’s goals, both near and long term.
Executives Agree in Theory
Executives know that their alignment with peers is critical. In fact, 88 percent agree that it’s important that the executive team is aligned when the company is undertaking strategic initiatives. “The larger things that cross a number of functions, that need resources in other areas, or will be deployed in other areas, then the level of alignment needs to be greater,” said the vice president of information technology at a medtech company. “You need to have those people aligned with that larger objective.”
And executives recognize what good alignment looks like. They cite communication and collaboration with their peers. There is organizational clarity and support across functions and further down into the org chart. Employee morale is high, and execution is effective.
Said one executive: “The proof is in the pudding, so to speak. You see colleagues doing the things they need to do to make the effort successful. They’re contacting you. ‘Hey, how soon do you need this individual?’ They’re active, they’re engaging, they’re doing the things they need to do to advance the effort, as opposed to, haven’t heard anything from them in three weeks.”
The Problem: They May Not Stay Aligned for Long
The problem is that executive teams often think they are aligned, but their alignment drifts over time.
Once they leave the annual retreat or boardroom marathon where they have hammered out the strategic priorities, reality sets in. Suddenly they must sacrifice their functional resources, political clout, pet projects, or bonus potential to initiatives they agreed to in theory. New information comes in that validates some assumptions but undermines others. These are strong forces that can strain and even break their alignment.
In our experience, and in our survey, IPM finds that executives tend to be overoptimistic about their level of alignment. For example, 64 percent of executives say they are fully aligned with their peers on the company’s strategic direction and initiatives. Three-quarters of them think their team is more aligned than the average company’s executive team. Only 5 percent say they’re below average. They can’t all be above average. And 79 percent say their current executive team is more aligned than teams they’ve been involved with in the past.
And They’re Not as Aligned as They Think They Are
In interviews, executives proudly claimed their executive team was fully aligned, then later in the discussion admitted to misalignment. One said that project metrics weren’t fair, as one colleague set less-ambitious goals to make them easier to achieve. Another told of a challenging peer who needed to be engaged before executive team meetings to get them on board. And others spoke of quid pro quo agreements, which may win “votes” but not alignment.
Prior research also confirms that executives are often overly positive about their alignment. An article in MIT Sloan Management Review noted that just over half of leadership team members in a typical organization agree on the organization’s strategic priorities. Harvard Business Review cited research showing “actual strategic alignment among employees, managers, and executives was two to three times lower than perceived alignment.”
To continue reading, download You’re Not as Aligned as You Think You Are.
You will discover:
- Why executive teams—and leadership teams of all stripes—become misaligned over time.
- How to recognize the leading indicators of misalignment.
- What to do to sustain executive team alignment.
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