One of the most critical and foundational elements of being a successful business leader is 
aligning priorities and goals of the organization or team being led in support of the execution of the business strategy. Well-intentioned business leaders spend millions of hours having meetings, writing emails, and sending texts that try to create alignment yet are frustrated and ineffective most of the time. Based on more than 25 years researching and working with leaders, there is an obvious yet neglected reason why despite the hard work and valiant efforts, their business success isn’t met; a lack of basic business acumen.
During a recent leadership development program I conducted for a large global company, my class and I were having a very frank discussion about the differences between success and failure. One of the participants – a leader in supply chain management – was talking about his goals and objectives and how he felt completely stuck between what he was telling his team to do, what his boss was telling him to so, and what other key stakeholders were telling him to do.
“My boss told me that we have to cut 25% of our operating costs and at least 20% of our raw materials costs as part of the ‘Reduce-Innovate-Deliver’ (RID) program being put into place. I told my team what we had to do and they complained bitterly because we already have cut things to the bone and cut many of our raw materials vendors to the bone to the point they are making less than 1% margin. I then got my ass handed to me on a silver platter by the Platform Manager responsible for the product line who was screaming about product quality and customer complaints and returned products. You can have all the goals and objectives in the world, and I can coach until I am blue in the face, but there is something wrong here. I don’t know what to do…”
The participant became really emotional and had to leave the room for a quick break. When he returned, we discussed the situation further to see what skills we could develop and how to address the challenge. After some more discussion with the participant and a few others in the same business unit, the challenge started to become clearer.
When I asked what the business strategy of their business unit was, and they didn’t have an answer other than to “satisfy customer needs.”
When I asked what are the key financial goals and metrics of success for their business unit, their only response was “achieving the operating budget spend reduction goal.”
So, here is the problem as I discovered through further research and dialogue with the business unit leaders who sent them to the leadership development program: the value proposition of their business unit is innovative product leadership.
Innovative product leadership means investing in R&D and other parts of the business to develop and bring to market new and unique high-quality products that competitors can’t immediately compete with. Unfortunately, no one in this entire leadership chain has participated in any formal business acumen training to be able to understand the strategy nor the key metrics and goals of the innovation strategy. Instead, they were being told to cut and manage costs as if they were an operationally efficient low-cost player. As a result, the supply chain managers were buying cheap, inferior quality raw materials which were resulting in customer complaints and product returns.
Sadly, this is not just an isolated story. This same leadership archetype is being repeated every day and billions of dollars are being wasted because real alignment of goals and objectives can only be achieved when everyone is talking the language of business including strategy, financial management, measures of business performance, competitor analysis, the voice of the customer, and delivering the right value proposition to the right and targeted customers.
