Business Thought

Strategic Alignment | Creating the Virtuous Organization

When different parts beautifully fit and flow together, it’s called concinnity. The word has popped up in books about corporate governance because it can be one of the most beautiful things to see in business: the arrangement of people, processes, and systems to balance the diverse goals of stakeholders as a company pursues its mission. Virtuous organizations see strategic alignment as the beautiful fit and flow of the organization’s structure and resources with strategy and the business environment, including the opportunity to create social value. 

Research backs the notion that an individual should pursue talent over passion (if the two collide). The insight is that passion develops as a result of competency. It is more likely that an individual will end up caring about issues they contribute impact towards, than that they will have an impact on issues they initially care about. Individuals also have more value and more impact when they are put in conditions that allow them to do what they are good at, under just the right amount of pressure or challenge. Skills are challenged and tested under new circumstances to the point an individual feels immersed in energized focus, fully involved in the process of the activity. The short lesson: to maximize impact, start with what you are good at.

Similarly, the virtuous organization knows the importance of working diverse skills and experiences into exceptional, sustainable leadership teams and then providing them with clear strategies and good governance before letting them loose. This structure allows for the emergence of concinnity, as the parts arrange for the best experience. As long as we’re throwing out words that are hard to pronounce *every* time, the psychologist Mihaly Csikszentmihalyi called this aligned state, experienced by individuals and organizations, flow. When teams are not strategically aligned, and something is amiss when the structure, resources, strategy, or environment, red flags fly in the form of a phenomenon called social loafing.  

Maslow also weighed in on the importance of alignment in his principles of enlightened management. He pointed out that team decision making, personal fulfillment, and organization productivity are all much more tightly connected as workers become more autonomous, self-respecting, and highly educated. 

It’s this same strategic alignment, of different and distinct parts of a whole being arranged towards a strategy of social value (organizational mission), that drives impact. Researchers Kaul and Luo have written about the value of strategic alignment and corporate responsibility. They find that a company can create social and financial value under two conditions: first, that it uses its core competencies for corporate responsibility (as opposed to other contributions) and secondly, that it chooses a cause that isn’t already polluted with other organizations working on it – competition isn’t good in the social impact space. In short, aligning an organization’s strengths with an unmet need leads to the greatest social and financial value creation. This study provides added insight into the demonstration of an economic case (as opposed to an ethical case) for social impact in businesses. 

The lure of strategic alignment is that it creates synergy, or in other words, there is significant additional value creation without consuming additional resources.

This is the type of value creation that virtuous organizations are incredibly interested in harnessing for social good. But, this type of alignment takes work and skill and persistence. 

Organization missions hold steady. But organizational structures and strategies often change, which make alignment a challenge. Aligning teams, divisions, and the business as a whole are each difficult in their own right. Thus, the shift of Facebook from a culture of “move fast and break things” to “move fast with stable infrastructure.” Less fun, but more aligned and impactful. 

Virtuous organizations regularly ask themselves how well the business strategy supports the company’s deep purpose. They also use data to see how aligned the organization is in supporting the achievement of organizational strategy through resources, management, and required capabilities. If a business mission includes elevating humanity, and a part of the business strategy is to provide superior customer service, is this reflected in the day-to-day behavior of staff in their interactions with each other and with customers? Symptoms of poor alignment are often obvious, especially to those who work in the organization, but also to other stakeholders. 

Strategic alignment is concinnity. The harmony manifests itself in more than just one note of the virtuous organization. It shows up in a symphony of superior financial performance, social value, a more positive work climate, above average staff engagement, a stronger commitment to values, and fewer turf wars. In a virtuous organization the process, product and experience of being a part of the organization all serve to achieve the organization’s mission and elevate society. The buzz created by the strategic alignment is part of the power of a virtuous organization: stakeholders value being part of a company that is elevating. 

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