The Plumb Line Principle: Why Alignment Is the Foundation of Business Success

The very essence of leadership is that you have a vision. You can’t blow an uncertain trumpet ~  Theodore M Hesburgh

Steve Jobs got fired from Apple because his vision wasn’t aligned with the Board and his CEO John Sculley. A clash between a founder’s radical product obsession and a professional manager’s focus on operational discipline. John Lasseter who directed many of the highest grossing animated movies in history got fired from Disney because his belief in the transformative potential of CGI animation was simply too far ahead of where Disney’s leadership were willing to go. The merger of AOL and Time Warner turned into one of the most disastrous acquisitions in corporate history because the 2-companies had never genuinely aligned on the assumptions driving thedeal or on a shared vision or culture.  

Less obviously, away from the headlines, scaleup businesses, M&A and PE deals sour, underperform and fail to deliver on potential or expectation every day of the week because of misalignment.

A plumb line is a tool to establish a vertical reference point. It allows builders to construct walls that are correctly aligned. Without it, things fall over because they are misaligned, unstable and unable to bear the weight of anything put on top of them.

In a business the value of alignment is highly significant. Research by McKinsey, looking at top executive team dynamics across a wide range of industries shows that, ‘companies whose top executive team is aligned and working effectively together are almost twice as likely to achieve an above-median financial performance[1]’. Research from LSA Global, in a study of 410 companies found that highly aligned organizations grow revenue 58% faster and are 72% more profitable than their misaligned counterparts.[2]

Get aligned is easy to say, but much harder to achieve in practice, especially in teams and businesses which are scaling and growing fast. Circumstances which generate inherent friction and instability.

The point of a plumb line is that it shows alignment relative to the vertical. In teams and in business alignment is also relative. CEO’s and team leaders have to work to create and sustain alignment. That work often starts with recognizing and challenging the assumption that you are aligned. From the experience of working with dozens of senior leadership teams the chances are, that you are somewhat aligned, maybe in the same grid square. But that you are not exactly aligned. It is highly likely that you have several competing ‘truths’, subtly different priorities and that these degrees of difference get wider when you compare alignment across the top, bottom and middle of an organization.

Some of the critical areas where alignment needs to be made and maintained are around strategy, purpose, culture and systems.

Vision and strategy

Where are we going and how we will get there? Simple questions but easy to underestimate how important they are for navigating decisions and actions with any team or business. Doing this well is not just about having a shared understanding across the business it is also about getting buy-in. Buy-in, which is the critical inflection point between plans and action. Without buy-in, anything you try to execute is compromised.

Selling the vision and a strategy, is an act of persuasion. The prize is commitment and discretionary effort. When it works you create a collective endeavour, it becomes about us and we. Not about you or I. For scaling businesses this alignment is often as much about the relationship between the senior leadership team and the board as with the teams in the wider organization.

Depressingly in a large-scale survey the Harvard Business review survey found only 29% of employees could correctly identify their company strategy[3]. Not knowing the strategy is a recipe for misaligned actions and unintended consequences.  When the vision and strategy are understood, clarity drives priorities, timely decision making and the allocation of resources.

Team Purpose

The assumption is that this is obvious. Yet a surprisingly small number of teams are really clear on their purpose. If the members of a team don’t know this, what are the chances that other teams and people in the business know? The lack of precision creates friction and gets in the way of effective collaboration and task achievement.

Most teams are relatively clear about what they do, but much less clear about why and who or what they are enabling. The sentence structure below is a simple tool to help generate insights and clarity for team alignment.

We ~ [do what]?

So that ~ [what actions and decisions are enabled by what you do]?

In order to ~ [how is this connected to the vision / strategy of the business]?

With the additional goal, that this needs to be in plain English, not jargon. If an intelligent 10-year-old can’t understand what you just wrote, then it is probably not yet clear enough.

Values and culture

You can think of culture as the atmosphere in which everything takes place. It’s there in consequence of all the behaviours of everyone in the business. These quickly become patterns that reflect the values of the people in the business. Ideally these behaviours help shape and drive performance and shape key decisions. Such as who you hire, promote or let go and the standards you set and maintain for yourselves.

The problem in most business is that the culture is rather accidental. It has emerged and then solidified. It is rare that the culture is understood to the extent that it is explicit and codified within the business. A new employee is most likely left to figure out and infer a whole range of norms and expectations from the behaviours of co-workers, teammates and especially leaders.

The consequence is individual and team behaviour that does not align to the culture you want. In many businesses there is say – do gap. What we do is always a more powerful message and all too often leaders talk a good game but behave very differently.

VW claimed to have a culture of responsibility that embodied integrity and doing the right thing. But in 2015 their lack of integrity and the decisions to falsify exhaust emissions data ultimately cost them over $30 billion in fines, led to the resignation of the CEO and a short-term collapse of 30% in their share value, not to mention the long-lasting damage to their brand.

Systems

Alignment around vision, purpose and culture means little if the systems and processes in a business are pulling in different directions. Systems include the structures, processes, metrics and incentives that govern how work actually gets done.  Gaps often show up here between how we think the process works and how people behave, often because incentives are misaligned to behaviours. If you want collaboration but reward individual performance, if you want intelligent risk taking but punish mistakes, misalignment flows from the perverse incentives in the system.  In scaling businesses there is often a lack of operational discipline to use systems and processes in a way that enables growth and overcomes bottle necks.

The question to ask is simple: do our systems make it easier or harder for people to do the things we want them to do?

Conclusion

Alignment around vision and strategy, team purpose, culture and values, and systems is fundamental to any business’s capacity for growth and sustained success. Return for a moment to the plumb line. A wall built without one doesn’t collapse immediately, it may stand for a while, looking more or less solid. But it is structurally compromised. Unable to bear the loads placed on it, and increasingly likely to fail under pressure.

The cost of misalignment is rarely dramatic failure. More often it shows up every day in friction, lost time, missed opportunities and an inability to move and adapt at pace. Decisions get delayed, priorities blur and people work in a persistent haze of uncertainty or worse, misplaced certainty.

The plumb line test for any leadership team is not whether you are roughly aligned. It is whether you are precisely enough aligned to build something that will bear weight.

[1] Leading Organizations: Ten Timeless Truths by Mary Meaney and Scott Keller Bloomsbury 2017

[2] https://lsaglobal.com/blog/organizational-alignment-creates-growth/

[3] https://hbr.org/2013/06/when-ceos-talk-strategy-is-anyone-listening