Building and sustaining a high-performing organisation is more challenging than ever. In order for it to happen, you need strategic alignment, argues Jonathan Trevor.
In today's increasingly complex business environment, organisations face more options and challenges than ever before. Yet leadership capabilities have arguably not evolved adequately to meet these new demands.
We often discuss the volatile, uncertain, complex, and ambiguous (VUCA) world and its external pressures, but often, the real weakness lies in neglected internal dynamics — people, culture, and values. Addressing these is uncomfortable and challenging, resulting in many leaders avoiding them.
But the failure to upgrade leadership skills to manage these intricate internal dynamics effectively is causing organisations to fragment and lose cohesion, leading to low morale, high turnover, and an unstable work environment for employees. To build resilient, sustainable organisations, leaders must focus on aligning these internal dynamics to external requirements, prioritising people and culture as the foundation for long-term success.
Four essential components of high-performing organisations
There are four essential elements for building and sustaining a high-performing organisation:
- Purpose: The foundation of a sustainable workforce is a clear and compelling organisational purpose. This purpose explains why the organisation exists and why it matters, both internally and externally. It should articulate the value created for stakeholders outside the organisation, ensuring that the purpose resonates and is meaningful.
- People: Employees are a means to fulfil the organisation’s purpose. It is essential to have a highly capable workforce that is aligned with this purpose. This involves strategic workforce planning, effective talent management, and ensuring employees understand and are motivated by the organisation's goals.
- Structure: Effective structures enable cooperation and maximise collective value creation. This goes beyond team dynamics to how people within the organisation connect, work together, and achieve more collectively than they could individually.
- Engagement: Removing barriers to engagement is crucial. Organisations need to provide the right tools, create opportunities, and reinforce the meaningfulness of work. Engagement involves ensuring that employees find purpose in their work and see how it contributes to the organisation’s goals.
An enterprise gains its competitive advantage through the meticulous alignment of these four core organisational components.
The importance of alignment
Strategic alignment is essential for ensuring that individuals and groups within a company work together towards a common purpose. However, many organisations struggle with this, resulting in conflicting goals and a fragmented structure. This lack of unity, which I refer to as ‘atomisation’, leads to inefficiency and ineffectiveness. Strong alignment around common purposes and values enhances overall performance and coherence.
As organisations become more fragmented, maintaining consistent performance and long-term sustainability becomes more difficult. While high-risk, high-reward management practices can lead to exceptional results, they are harder to sustain over time. Rapid and unpredictable business cycles, now lasting only a few years instead of decades, contribute to workforce instability, causing stress, burnout and employee turnover. Therefore, fostering alignment and coherence is crucial for both organisational and workforce sustainability, ensuring employees are engaged, supported, and able to contribute to long-term success.
The role of HR in alignment
HR should be one of the most strategic functions within an organisation, focusing on:
- Vertical alignment: HR should actively participate in discussions about the organisational capabilities needed to support a standout business strategy. Essentially, HR helps the organisation develop the unique strengths that set it apart from competitors and drive innovation. Key aspects of this vertical alignment include workforce planning and design—basically, managing human capital.
This involves not just ensuring we have the right people with the right skills, but also creating systems to manage our talent in the best possible way. We can be very innovative in how we recruit the talent we need, manage performance, reward our employees, and develop their skills. So, there's a strategic element in making sure our resources align with our goals, and a functional aspect in managing these resources effectively. This dual focus helps HR play a vital role in making the organisation both capable and innovative.
- Horizontal alignment: This involves integrating human capital with other resources, particularly technology. As human and machine capabilities become increasingly interconnected, HR needs a strategic approach to manage this integration on a case-by-case basis; within different categories of work, and across the organisation as a whole.
HR professionals should be experts not only in managing people but also in understanding technology. This means working closely with the technology function to ensure seamless integration. As work increasingly involves both human and machine performance, the lines between HR and technology blur. Therefore, HR’s role becomes even more critical in ensuring that this integration is effective and enhances overall productivity. By being well-versed in both the people and technology aspects, HR can ensure that human and machine capabilities work hand in glove, making the organisation more innovative and efficient.
Driving sustainable competitive advantage through people
Some organisations have neglected the people component because it is perceived as too challenging to manage. As a result, when innovations like generative AI emerge, they are eagerly adopted due to their relative ease of acquisition. However, this ease of adoption means such technologies cannot provide a sustainable competitive advantage, as they are accessible to all.
Developing firm-specific talent, competencies, capabilities, values, and behaviours offers a much more enduring advantage but is significantly more difficult to achieve, especially in large, complex organisations. HR should be at the forefront of fostering these long-lasting attributes. To galvanise HR's strategic influence, organisations must recommit to the challenging but rewarding task of nurturing their people, thereby building a sustainable competitive edge rooted in unique human capabilities and organisational culture.
