If your business has become misaligned with the market, customers, or the modern world, business realignment may be necessary.
In this post, we’ll learn what business realignment is, what can cause a company to become misaligned, why it is imperative to realign business activities, and how to create a realignment plan.
What Is Business Realignment?
Business alignment, in general, refers to how well an organization’s operations fit and target other factors, either internal or external.
For instance, alignment can refer to how well the organization’s operations fit with:
- The organization’s own goals and objectives
- Technology trends
- Customer sentiment and expectations
- The economy and markets
Several things can cause an organization to become misaligned with these types of conditions, including everything from mismanagement to organizational inertia to outdated business practices. When designing a realignment strategy, understanding the cause of the misalignment is paramount and should be the very first step.
What Does Business Realignment Look Like?
An organization that is misaligned with any of the above conditions risks losing customers and market share to more aligned competitors.
The scale and scope of the realignment process will naturally depend on the organization’s needs, its circumstances, what it is misaligned with, and so forth.
In some cases, the realignment may only require small adjustments and minimal organizational changes. Other realignment efforts may be complex efforts that transform the business from the ground up.
These types of complex realignment programs could, for instance, affect:
- The structure of the business. The structure of the organization can mean several things, depending on the context. It can refer to the actual job roles within the business – that is, the “organizational chart.” More fundamentally, however, the business structure is built upon a set of principles. Flat organizations, for example, tend to distribute responsibility among autonomous teams.
- The organizational culture. Organizational culture and performance both affect one another. Changes to the business, for instance, can impact the culture. Likewise, cultural changes can affect the organization’s performance. When realigning the business, it is important to consider what type of culture will best fit with the company’s new direction.
- Business models and processes. Business models refer to the organization’s overall strategy. The model defines how the company adds value in the marketplace and how it proposes to generate revenue, grow, acquire customers, and so forth. Business processes refer to the operational and technical execution of that business model. Either may be changed during a business realignment effort.
- The company’s mission and vision. During major realignments, organizations may need to make changes to both its long-term vision and its corporate mission. While some may view these as abstract, they actually drive the organization’s strategic efforts, so it is important to ensure that all areas of the business remain aligned with its vision, mission, and guiding principles.
Another variable that affects what realignment efforts look like is the time frame.
The shorter and more drastic the change, the greater the impact on the business, the employees, and, potentially, the customers. Incremental changes that are implemented over longer timelines, however, will require less adjustment for those involved.
Since the business impact can affect the outcomes of realignment efforts, it is important to assess those impacts when creating a realignment plan.
How Do You Create a Business Realignment Strategy?
Here are several tips that can help guide you through the change management process:
- Evaluate business alignment. When problems are first noticed, it is important to analyze them in detail. This means learning where the business is misaligned, why it became misaligned, the consequences of that misalignment, what full alignment would look like, and what it takes to get there.
- Develop an overarching realignment strategy. A strategy represents the overall approach to solving the alignment problem. An organization that has “fallen behind the digital times,” for instance, could build a digital transformation strategy aimed at embedding digital-first principles into the culture, the business model, and the operations.
- Assess business impact. A business impact analysis can help stakeholders understand how a realignment effort will affect the company, as mentioned. It can also help change leaders identify and mitigate potential risk factors.
- Obtain buy-in from leadership. If business leaders don’t support the realignment effort, chances are it won’t succeed. Making a business case centered around the benefits of changing – and the drawbacks of not changing – is a good approach.
- Translate the realignment strategy into a step-by-step plan of action. Project managers and change teams should work together to create a roadmap for change. This roadmap will outline the series of actions the business needs to take in order to change successfully. It should also outline the roles and responsibilities of those driving the change project forward.
- Optimize the change program as needed. Change managers should continually collect data, learn from employees, listen to customers, and tackle problems. After all, the more mature and sophisticated the change management effort, the better the project’s outcomes will be.
Perhaps most important of all is the need to stay focused on the reasons why the business became misaligned in the first place, then embedding mechanisms in the business to prevent the same from occurring again.