Businesses are facing high competition and ever-changing market dynamics such as volatile macroeconomic cycles, shifting customer expectations, new technology advances like generative AI and even talent retention challenges.
These complicated market dynamics have only increased expectations for IT teams to provide solutions that can boost business results as well as revenue growth, profitability, customer satisfaction and employee engagement. IT teams are expected to deliver these solutions within the constraints of tight cost management.
To excel in this business climate, leaders must employ a high-performance IT strategy, and the first key principle that guides a high-performance IT strategy is alignment.
Why is alignment so important right now?
According to Forrester, only 29% of business and technology decision-makers believe their digital business initiatives align with other internal functions. Yet Forrester also finds that alignment in high-performance IT can help businesses grow their revenues by 2.4x.
Achieving superior alignment requires tech leaders to fire on the cylinders of strategy, operations and leadership. Superior alignment is paved across three business dimensions: strategy, operations and leadership.
- Strategic alignment ensures that business and IT strategy are in lockstep on the speed and scale of change required to achieve business results.
- Operational alignment maps the impacts to all layers of the IT operating model, along with corresponding investment changes.
- Leadership alignment across the stakeholder ecosystem holds the right individuals accountable to deliver the plan.
Aligning and executing to one of four IT styles
In a high-performance IT strategy, technology leaders align their primary investments and execution to one of four IT styles: enabling, amplifying, co-creating and transforming.
- The enabling style stabilizes, operates and protects the IT organization.
- The co-creating style delivers new products with IT and business.
- The amplifying style uses data, AI and automation to optimize the business.
- The transforming style pushes IT to leverage emerging technologies for breakthrough innovation.
At any given time, leaders are investing across all four styles, with one style dominating.
For each organization, the metrics of winning differs depending on their dominant IT style. For example, in the enabling style, cost and margin control help win the competitive race for the consumer, while the amplifying style focuses on profitability growth. Co-creating focuses on top-line growth, and transforming is a mix of top-line and profitability growth. When businesses transition from one dominant style to another, a higher level of calibration is required, as opposed to taking a “set it and forget it” approach to IT strategy.
5 steps to achieving superior alignment
But achieving superior alignment is no longer sufficient to win. Achieving superior and relentless alignment requires a five-step process with constantly changing business dynamics. The path to relentless alignment also includes regular calibration, as there is never a one-size-fits-all strategy; however, the process to achieve relentless results is always the same.
1. Understand your business strategy to plan the course
Planning for high-performance IT begins with a fundamental understanding of the business strategy. Understanding how changing business dynamics change the resulting business goals, outcomes and success metrics helps technology leaders identify the mix of IT styles that will deliver the new business capabilities needed. Leaders should conduct an assessment to understand the impacts of business changes on IT capabilities.
2. Align your IT strategy and develop a realistic investment plan to win the race
After determining your dominant IT style and deltas for the business strategy, assess your IT capabilities against three criteria:
- The importance to IT’s strategic value drivers.
- The maturity of your IT capabilities (e.g., people, data, application, process).
- The complexity of changing the capability.
Use decision tools to ensure you are mapping your IT maturity and current capabilities against the right level of investments, divestments and re-investments to deliver across your unique mix of styles — leading with your dominant style — which is poised to have the most impact on your business strategy. Leverage competitive intelligence to guide your assessment.
3. Align the IT operating model and build the parts required for a high-performance race car
Each organization has different levels of capabilities within their IT operating model across six layers: customers, services, capabilities, structure, governance and leadership. Develop an updated operating model reference architecture to translate your investment in the mix of styles to build the next iteration of your high-performance operating model — and pay close attention to the strength of existing capabilities and the complexity of change to existing or new capabilities. Leverage research data in industry verticals to guide your redesign.
4. Align your team and leadership through inspiration to increase efficiency, even at pit stops
Gain buy-in from business partners on your new IT strategy, the dominant style and overall investment plan. This is achieved through compelling narratives that inspire, motivate and build consensus around achieving desired outcomes. Leverage best practices for communicating with business stakeholders through change management, setting calibration checkpoints and building a communication model that conveys the iterative value of technology for improving business results.
5. Race with the right velocity and momentum
Use a roadmap to deliver on the new dominant IT style across the entire operating model and calibrate at the pre-determined intervals to retain continuous alignment with business dynamics. Use performance metrics and relevant data to drive these conversations at each turn. Keep your velocity and momentum at the right clip to win the race. Too much momentum might make you lose control, while too little won’t have the desired impact on the market.
To increase velocity, ensure your high-performance operating model is in permanent alignment with changing business dynamics and at the pace your teams can maintain.
Benefits of relentless alignment
When using this five-step process to achieve this level of relentless alignment, tech leaders will see several benefits. These include balancing their IT portfolio by regularly calibrating investment to business benefits, aligning their operating model to effectively engage the entire enterprise, and securely architecting and adopting technology that forms the nucleus for business innovation and process.
This article was written by Chuck Gahun, a principal analyst at Forrester whose research is focused on helping executives develop and implement digital strategies that deliver outcomes for businesses and consumers. He has spent the last 25 years of his career leading digital strategy, experience design, and technology implementation projects across content management systems, e-commerce systems, digital asset management systems, product information management systems, customer relationship management, marketing technology automation, and digital experience platforms. Chuck holds a BA in government and international politics and an MS in technology management from George Mason University.
