Strategy alignment means nothing!

Organizations are not created for the sake of their existence. Every action taken by any part of the organization should be judged by its contribution to deliver the prioritized strategy objectives. This implies that before we can deal with a proposed improvement from a programme, project and other work, an organization must first define the strategy contribution from that investment (Goldratt 1990). 

This includes the measures and metrics that will enable us to objectively judge the success of that contribution. Simply, (Tilles 1963) states “strategy is an indication of what the organization as a whole is trying to achieve and to become. Both parts, the achieving and the becoming, are important for successful strategy implementation”, particularly when in 2020 only 52% of organizations achieved two thirds of their own strategy objectives (Speculand 2020).

For this reason, Stephen Jenner states “strategy alignment means nothing; rather its strategy contribution is what really matters” (Harrin 2016), particularly with benefits realization. The benefits represent a measurable improvement which contributes towards one or more strategy objectives and it is therefore important that strategy is clearly articulated so that this contribution can be measured consistently (Jenner, S and APMG International 2014, p.26).

To explain, contribution means the part played by a person or thing in bringing about a result or helping something to advance. While alignment means arrangement in a straight line or into correct relative positions (Oxford Concise English Dictionary 1999). Accordingly, understanding the contribution that every spending proposal makes within a portfolio to achieving strategy objectives is consequently at the very heart of effective benefits management (Jenner, S and APMG International 2014, p.26).

You can do anything but you can’t do everything aptly applies to strategy implementation. Too many organizations deploy resources (i.e. people, funding, machinery, materials, technology, property and anything else required to deliver the work) on a large scale without a clear notion of what their strategic priorities are. This is despite an organizational strategy being a vital ingredient in determining the organization’s future in a growing digital economy (Tilles 1963). If your organization is incapable of delivering its strategy objectives, the strategy is effectively worthless and your organizational purpose will remain unfulfilled (Trevor and Varcoe 2016).

Strategy contribution should therefore transform, grow or whatever other objectives the organization has planned to achieve to move the organization and business model forward (Tilles 1963 and George 2017). In contrast, strategy alignment is unlikely to achieve this or yield the expected benefits. It may also result in digital disruption particularly where resources are predominately targeted towards ‘run’ or maintaining the everyday operation of the business (Tilles 1963 and George 2017). For example, Kodak’s inability to exploit the opportunity regarding digital photography, a technology that it invented in 1975 (Mui 2012).

Researcher Marcus Buckingham came up with the insight that “average [organizations] play checkers, while great [organizations] play chess”. In checkers, every piece is the same: they’re interchangeable. But winning a game of chess requires you to understand each piece’s strengths and weaknesses, and you can’t effectively play unless you understand why each piece is unique (Duffy & Fosslien 2019). That is, strategy contribution should result in the appropriate allocation of funds to different types of spending proposals, both pipeline and inflight, that best demonstrate the relative importance and priority of your strategy objectives (Jenner & Kilford 2011). 

Simply stating 'strategy alignment' as most organizations do, particularly in programme and project business cases, is wholly inadequate (Simms 2016). Stephen Jenner advises a spending proposal can be easily aligned with any strategy objective, particularly in the absence of specific measures and metrics (Harrin 2016). Alignment is not a strong measure as not all strategic objectives are created equal (Simms 2016). That is, strategic objectives need to be weighted and ranked to demonstrate which are the most important in cascading order (Jenner and APMG International 2014).

Strategy contribution is crucial because the ultimate objective of portfolio and benefits management is to facilitate the achievement of strategic objectives, not alignment (Jenner & Kilford 2011). A portfolio can ‘align’ itself to a cause by believing in it and talking about it but actually doing nothing about it. That is, ‘alignment’ is a famed weasel word for performance management that results in poor strategy implementation (Thorpe 2007). However, to be comprehensive the business case – supported by a benefits map and benefit profile – should clearly state how the intended spending proposal will contribute to the strategy and performance of the organization (Daniel and Ward 2012).

The worst aspect to portfolio management is the all-too-common ‘tick-box’ approach to strategy alignment that gives organizations the illusion they are measuring the portfolio’s strategy contribution when they are not (Simms 2016). The problem with a ‘tick-box’ culture, described as bureaucratic and external imposition, is the the gap between official appearance and brute reality in terms of action and results (Boyle 2021). Strategy alignment is too often 'the justification of last resort when an [organization] does not want to think about ‘why’ to do an investment’. In essence, strategy [alignment] is the reason often cited when the benefits of a particular idea cannot be articulated in a more lucid manner' (Sanwal 2007, p. xxi).

The Praxis Framework defines portfolio management as the ‘selection, categorization, prioritization and optimization of an organization’s programmes and projects, in line with its strategic objectives and people resource capacity to deliver benefits realization’ (Dooley, 2014). As such, every organization should develop an organizational-wide portfolio framework and benefits framework to provide a sound and consistent approach to determining the forecast strategy contribution from all programmes, projects and other work proposed for inclusion in the organization’s portfolio (Jenner, S and APMG International, 2014).

The portfolio categories might align with specific strategic objectives (e.g. transform, grow and run) but mature organizations align their portfolio categories with the benefit categories defined in the benefits management framework. It ensures the portfolio categories and benefit categories are one and the same that helps in the identification and quantification of benefits. It also facilitates a ‘level playing field’ for business case options analysis, investment appraisal of the initiative and portfolio prioritization. This is particularly helpful when considering the optimization of the portfolio as a whole, particularly in terms of strategy contribution (Jenner and APMG International 2015).

At this point, the Portfolio Management Office should ask itself, “what measurable improvements (i.e. benefits) would demonstrate achievement of, or progress towards, those prioritized and ranked strategy objectives?” Benefits, financial and non-financial equally, are synonymous with positive strategic impacts so organizations need to have a consistent approach to measuring these strategic impacts as a basis for sound investment appraisal and portfolio prioritization (Jenner 2020). (Sanwell 2007, p.xx) says “a well-run [and mature] portfolio is actually the manifestation of an organizational strategy”.

To conclude, British author Clive Staples Lewis once said, “You can’t go back and change the beginning, but you can start where you are and change the ending”. As your organization matures its portfolio management capabilities, there is better visibility of what you are doing, what you could be doing, and what you should be doing (Barr 2022). As such, continual process improvement is required to ensure spending proposals demonstrate their strategy contribution. Given an organizational strategy provides the context for investment, experience shows that a spending proposal in a programme, project or other work begins most effectively when it is launched as part of a clear and measurable organizational strategy (HM Treasury 2017).

So ask yourself what is the most important strategy objective and what factors will help you achieve that objective? Renowned author Ken Blanchard said, “when you’re interested in doing something, you only do it when it's convenient. When you’re committed to something, you accept no excuses; only results”. (Speculand 2017) advises “only when strategy is successfully executed [through benefits realization and benefits reporting] do you know if it was a good strategy. Only when it’s executed well do customers notice the difference. Only when the execution succeeds does it positively impact shareholder [or customer] value.” Hence why (Pijl 2020) says, “a strategy that is not carried out is just as worthless as no strategy at all”. As such, “you need to think about [strategy contribution] from the very moment you begin developing the strategy; particularly in a growing digital world” (Pijl 2020).