Globalization Success: Capabilities with Strategic Intent
Finance organizations seeking to move to top-tier performance must invest time up front evaluating and understanding their organization’s corporate strategy. A company with a strong country focus will have different needs from one with a focus on global lines of business. A company intent on growing organically will have different needs than one focused on growth from acquisitions.
The strategy of global expansion will heavily influence the capabilities required of the finance organization. Finance organizations need to understand and document the skills required to support the organization’s strategic goals. This analysis, in conjunction with a current state assessment, will enable finance to understand the gaps between current capabilities and future requirements, thereby enabling the finance organization to create a skills development plan required to align with the company’s strategic goals.
Aligning corporate capabilities with overall corporate strategy is crucial for an organization's success. It ensures that the company's resources, competencies, and activities are effectively utilized to achieve its strategic objectives.Finance capabilities include both technical and soft skills. All too often, organizations focus on technical skills while ignoring the need for soft skills such as leadership, management, and communication. In a global environment, these soft skills are critical for finance leadership to effectively manage across borders and cultures.
Here are several ways to achieve this alignment:
Clear Communication of Strategy: Begin by ensuring that the corporate strategy is well-defined and clearly communicated throughout the organization. All employees should understand the company's goals, priorities, and the role they play in achieving them.
Capability Assessment: Conduct a thorough assessment of the organization's existing capabilities, including skills, technologies, processes, and assets. Identify strengths and weaknesses that can impact the strategy's execution.
Gap Analysis: Compare the current capabilities with the desired capabilities required to execute the strategy. Identify any gaps that need to be addressed, whether through skill development, technology acquisition, or process improvement.
Resource Allocation: Allocate resources such as budget, personnel, and time in a way that aligns with the strategic priorities. Ensure that the necessary resources are available to support the initiatives that drive the strategy.
Skill Development and Training: Invest in training and skill development programs to enhance the competencies of employees. This might involve workshops, courses, certifications, and mentorship to close skill gaps.
Technology Adoption: Evaluate and adopt technologies that align with the strategic direction. Whether it's implementing new software, tools, or equipment, ensure that technology enhances the organization's capabilities.
Cross-Functional Collaboration: Encourage collaboration between different departments or units. This promotes knowledge sharing, helps in leveraging diverse skills, and ensures that different parts of the organization work cohesively toward strategic goals.
Performance Metrics and KPIs: Establish key performance indicators (KPIs) that reflect the progress and success of strategic initiatives. Regularly monitor and measure these metrics to assess alignment and make necessary adjustments.
Incentives and Rewards: Link incentives and rewards to the achievement of strategic objectives. Recognize and reward employees who contribute to aligning their efforts with the overall strategy.
Agile and Adaptive Approach: Recognize that strategies and market conditions can change. Foster an agile mindset that allows the organization to adapt its capabilities and strategies as needed.
Leadership Support: Ensure that top leadership is fully aligned with the strategy and actively supports its implementation. Leaders should be role models for the desired behaviors and outcomes.
Risk Management: Assess potential risks and uncertainties that could impact the alignment process. Develop contingency plans to address unexpected challenges that might arise.
Feedback Mechanisms: Establish channels for employees at all levels to provide feedback on the alignment process. This promotes a culture of continuous improvement and adaptation.
Regular Strategy Review: Periodically review the corporate strategy to ensure that it remains relevant and aligned with market dynamics and internal capabilities. Adjustments can be made as needed to maintain alignment.
Organizational Structure: If necessary, restructure the organization to better align with the strategy. This might involve creating new roles, units, or reporting relationships that support the strategic goals.
Remember that aligning corporate capabilities with overall corporate strategy is an ongoing process. Regular monitoring, assessment, and adaptation are essential to maintain alignment as the business landscape evolves.
