How to Align Business Unit Strategy with Corporate Strategy

As we noted in an earlier article, Strategic Planning: You’re Probably Doing It Wrong, strategic plans center on choice around a company’s most critical go-forward imperatives. They are about saying No more than saying Yes to business-as-usual funding and selective investments, and instead involve making resource tradeoffs that support those imperatives.

If you’ve shepherded a corporate strategic plan that accomplishes these selective imperatives, you then need to ensure each of your Business Unit leaders are executing a similar plan at the functional level. How might corporate leadership and Business Units promote mutual understanding and alignment with the enterprise strategy at each level?

Upfront Involvement of Business Unit Leadership is Essential

It cannot be emphasized enough that corporate strategy must be developed with Business Unit leadership involvement. If corporate strategy is developed in a vacuum, this violates one of HighPoint’s foremost principles: Executive teams consisting of corporate and Business Unit leadership need to agree and commit on the critical, go-forward imperatives. Further, when teams perceive greater choicefulness in a strategic planning effort, they will more effectively align around the down-selected choices within each of their Business Units and Functional areas.

With leadership commitment and alignment around the new corporate strategy, deeper alignment at each layer of your organization is a corresponding necessity. With that goal in mind, there are two vital steps to achieving it: 1) Cascade imperatives and choices with active management, and 2) Ensure organizations are equipped with the talent and tools to support the cascaded imperatives.

Strategy Effectiveness Is in the Execution

Decisive imperatives communicated throughout the organization (alongside compelling vision) are a first step in the right direction. As a sound strategy comes to life with effective execution, below is a non-exhaustive checklist of key success factors HighPoint recommends to ensure imperatives are well-understood, localized, and executed:

1. Cascade imperatives and choices with active management.

  • Maintain rigorous choice alignment with flexibility in the enterprise strategy framework

Once the strategic imperatives have been established and aligned at the corporate level and across Business Units, there can be no wholesale “re-votes” at the business level. That said, local empowerment and translation are both critical. Business Unit microstrategies must similarly involve choice but cannot be contradictory to the enterprise-level strategy. While recognizing 100% alignment is rarely the outcome, feedback loops are healthy.

  • Measure what matters

Strategic planning metrics are as central to success as the strategic plan itself. Ensure the Business Units have metrics guideposts as they translate their equivalent metrics and milestones at the Business Unit level.

  • Identify and call out interlocking interdependencies

Cascade the associated objectives, results, and metrics throughout each organization in the enterprise. A variety of approaches work here, including the Objective Key Result (OKR) annual and quarterly cadence. In that cascading, it is critical as objectives and results are translated to also ensure Business Units and Functional Groups are speaking with one another about interlocking interdependencies. In other words, if one group requires another’s delivery for their own share of the overall strategic imperative, this must be mapped out and agreed to upfront.

  • Project Manage the strategic imperatives

For critical strategic imperatives, HighPoint recommends an ongoing Corporate and BU leadership cadence, at least monthly­–but ideally bi-weekly–to address, How are we doing, What obstacles have arisen, and What are sensible, achievable solutions? This will go a long way in maintaining focus and keeping momentum behind the enterprise imperatives.

2. Ensure organizations are equipped with the talent and tools to support the cascaded imperatives.

  • Business Unit Leadership activates the new imperatives with visible choices

Small yet visible changes in management practice and direction can either reinforce or undermine the importance of the imperatives. These sometimes subtle cues are an essential overlay to all action. For instance, in one HighPoint client’s strategic imperative meeting in which it was agreed that a new, imperative-affiliated metric would replace an old one, the Business Unit leader changed the agenda of his operational leadership team meeting the next day, centering it on a review of that top metric.

  • Talent, culture, structure, systems, and process evolve to fit the new imperatives

Business Unit teams must be able to answer affirmatively to, “Can our organization achieve the strategic imperative(s)?” As an example, if data analytics will play a role, the right talent or skills training needs to be in place to enable this competency. The 7S Framework and other like models are good references in answering this question.

While a strategic planning effort takes place at the corporate level, it must do so with the upfront, decisive involvement of Business Unit leadership. Without alignment among business leaders, effective communication of the strategic imperatives, ongoing active management, Business Unit localized translation, and appropriate talent and tools, your strategy will struggle to gain a foothold across the organization and achieve its goals.

HighPoint’s change agents have functional expertise and deep experience accelerating processes for better, faster results. Our top-tier consulting team partners with business leaders to execute rapid, meaningful outcomes against strategic imperatives with effective change communications, resourcing, and pace. Contact us to start the conversation.