If [fill in the person] thinks I’ve bought in, they’re crazy.”
“Even if [fill in the group] doesn’t believe in our current vision, they’ll believe when they see it.”
“I don’t think [fill in the project] even matters to our customers.”
These are not the kinds of comments any of us utter if we know “the boss” could hear them. But each of us can likely remember a time in our career where we said it, or heard it. It’s tempting to think that people who aren’t on board will eventually “self-select out of the organization” or, if you’re the boss, you’ll never have to be that hard-ass who says, “Sorry, but this is just how it is.”
Most of us generally avoid conflict. After all, who can remember getting a performance review saying, “You rock at conflict!” Instead, we reward getting along, and being good corporate citizens, and we hope that disagreements will resolve themselves. But as we’ve all learned in real life, hope is not a strategy. Because most of us are bad at dealing with conflict, we’re also bad at fostering what must, in a successful business, come through conflict — whether overt or covert. And that’s alignment.
Alignment is among the contenders for the most overused word in business today. Why is that? It’s not very sexy. Out of curiosity, I ran it through a search engine and what did I get? Wait for it… wheel alignment.
Ooh, yeah. Sexy.
But wheel alignment is actually an apt metaphor for organizational alignment. In a nutshell, wheel alignment is a matter of adjusting the angles of the wheels so that they are perpendicular to the ground and parallel to each other. The purpose of these adjustments is maximum tire life and a vehicle that tracks true when driving along a straight and level road. When a car is out of alignment, we get rapid tire wear, or a vehicle that pulls away from a straight line. The driver wastes time and resources fighting to keep the car on course. A shock to the system — hitting a pothole, say — can throw a car that’s well-aligned out of alignment.
The parallels to business are likely obvious to you, but let’s just complete the picture: Between the creation of a new idea and that idea becoming a new market reality, many different decisions and actions need to happen. The degree to which those designs, choices, tradeoffs, etc, are more in sync, the faster and easier that new reality comes into play. The more people disagree or are confused, the less “aligned” the mechanisms are to create the desired result. The more we disagree while trying to execute, the more wear and tear on the people, and the unnecessary expenses (of time, of resources) we incur. The more we move forward without real agreement, the more we veer all over the road.
Alignment matters because it decreases the amount of energy it takes to go from A to Z. If your company is less aligned than, say, a competitor, they might reach the market faster, or spend less, or simply get more deals done and lock you out of the picture. While you may still get from A to C or even to K with some misalignment, you are living with friction and energy loss. It’s when alignment kicks in that the enterprise really scales. Alignment is always behind a winning market situation.
There are three areas where alignment is pivotal:
The alignment of the brand’s promise with the market’s needs. As Seth Godin says: Long-term brands and relationships are built on alignment. The Wal-Mart relationship: I want the lowest prices and Wal-Mart is committed to giving me the lowest prices. That’s why there’s little pushback about customer service or employee respect… the goals are aligned. The Apple relationship: I want Apple to be cool. Apple wants to be cool. That’s why there’s little pushback on pricing, obsolescence, or disappointing developers.
The alignment of investors’ interests with the executive team’s goals. On day one of a new venture, the executive team and the investors are on the same page; both plan for a big outcome. However, markets shift, competitors move in, secondary money comes in, execs begin to fatigue. The magic window of opportunity begins to narrow. Mark Suster talks about this in his entrepreneur thesis. Companies get offers to be acquired, but at much lower valuation than the original dream goal. Instead of a compelling 10x return, it may be looking at an offer that provides a decent but sleepy 2x or 3x return against the original investment, while leaving a bit for employees, maybe even enough for founding team to have their future taken care of. But if the VC board members have a magic number of 10x in mind, they can choose to block the sale. I’ve seen a reasonable deal blocked so badly that the company went into a fire sale in the end. Execs got nothing, and investors lost most if not all of their money. That set of VCs would rather have zero than agree to a 3x return.
Aligning what products we offer and which customers we focus on. At any stage of a company, you’ll have competing priorities. As a start-up raising money, you will face challenges fixing your current product offer and designing and building your next generation, all while raising funds to fund your enterprise. You’ll have to figure out which customer to serve. Some teams do a “middle of the road” solution that pleases no one. Some start with one offer then switch to another because their competitors went there. And then there are those teams who never really make a decision and so try to do everything well. Many a big company does this also, as alignment decisions only grow in scope. In a big company, you might be facing the tradeoffs of signing a major OEM deal that will obligate your engineering or channel management infrastructure or going for a direct sales model that will require putting people on payroll. This can lead to an intense discussion on what/how/who and by when. Without alignment, a lack of decision can cause you to do the now infamous Yahoo peanut butter solution; spread yourself so thin that all value is lost.
What your brand promise is, how much money you want to earn, who your key customers are — these are thorny questions. No wonder alignment is so hard.
A new market reality is fundamentally about a change; sometimes it is a big change, sometimes a little change. But all major direction choices require change nonetheless. Sometimes you’re asking people to shift from doing what they know to something unfamiliar. Sometimes you’re asking them to take the long view when they’re rewarded by a different set of metrics. Almost always, you’re asking people to think a new thought, do a new thing, learn, stretch, and cooperate with others on creating something together. Oh, and, quite often, you’re making the decision while challenged: brands are delivering on their product offers while in motion and delivering this quarters’ revenues. Or, companies are trying to reach scale with limited funds; and deciding what new product to build is hard because everyone has an opinion, yet very few of us have any data on which to make the call.
Alignment is about how you do your work; specifically, how effectively you “co-create the future.” We can measure it by how much energy it takes to do what we do, together.
In business, disagreement is fine as long as you come to clarity on which path is the one you will travel together. At that point, it becomes an energy drain. Sooner or later, you’ll face one of those In or Out moments, as in: Are you in, or are you out? The object lesson is this: No. We cannot agree to disagree.
(Note: this post was originally published by Harvard Business Review, in May 2011. Thanks for contributing to comments at the original post: http://blogs.hbr.org/cs/2011/05/we_cant_agree_to_disagree.html)
