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Thursday, October 15, 2009

Closing The Alignment Gap Between Strategy and Operations

In their most recent study, Forbes Insights, in conjunction with SAP, surveyed executives to provide first-hand insights into how companies are managing alignment issues.

Key findings of their research:

  • Economic volatility has put companies under greater pressure to align strategy and operations. This alignment could be more important post-recovery as they ready their plans to capitalize on new market opportunities.
  • Changing market conditions that affect strategy and operational execution are the number one barrier companies face in aligning strategy and operations. Other top barriers cited by executives include: added pressure from the current economy on short-term costs versus longer-term return on investment (ROI); lack of availability of timely, accurate data; lack of effective communication of strategic goals to operational employees; and operational risks and opportunities that are not incorporated into overall corporate strategy.
  • Alignment gaps may also arise due to differences in strategic and operational goals. Asked about short- and longterm priorities, strategic functions focused on competitive differentiation, while operations is coming under increasing pressure to boost efficiency and manage costs.
  • There are concerns that employee recruitment, retention and training are not aligned with strategy, or that resources are not allocated properly to ensure that the workforce can achieve strategic goals.
  • Managing regulation and risk is another area of concern. Executives indicated that regulatory compliance issues frequently impact strategic execution. A failure to incorporate changes to risk models into strategic plans may further hamper alignment.

BOTTOMLINE: "Successful alignment requires companies to have a clear view of strategy and operations, the plans and the activities. Only with increased visibility can businesses identify the
barriers to alignment and close the gaps that may be keeping them from competing more effectively."

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