[SOUND] Hello again, today you are starting module number three of course four, Sales and Marketing Alignment. In one of your readings, Ending the War Between Sales and Marketing, Philip Kotler reports some positive outcomes of marketing and sales integration. He says that sale cycles are shorter, costs of market entry decrease, and cost of sales also goes down. It is great when marketing and sales are aligned, but it won't be of much help if all functions are not aligned with the corporate strategy. The alignment of all functions behind corporate strategy is a determinant of the degree of success a firm will have. This is confirmed by several studies and publications. In the 2016 Harvard Business Review article, A Simple Way to Test Your Company's Strategic Alignment, Jonathan Travel and Barry Vaclav propose a new methodology. According to them, strategic alignment means that the elements of a business must be arranged in a way as to best support the fulfilment of the company's long range purpose. The two elements are business strategy and organizational structure. First, we must ask what is purpose? In this paper, purpose equals long range objectives, or vision. These are things that shouldn't change over the years. This strategy may change and the company's organizational structure may also change. Getting them aligned while they both move is not an easy task. The discussion about strategic alignment involves asking two questions. First, how well the strategy supports the fulfillment of the company's purpose? The purpose is the what, what the business is trying to achieve, not tomorrow, but in the long run. The strategy is the how. It involves choices about what products and services to offer. To which public with which competitive advantage. Next question is, how well the organizational structure supports the execution of the strategy? Organization structure equals, resources, capabilities, personnel, systems, funds, and values. When you insert these two questions, we have four possible company types. Let's discuss each of them. The first one, we can call not long for this world companies, where neither strategy nor organizational structure supports the purpose. Those companies perform in opportunistic ways with wrong or little resources, and are basically time bombs awaiting to explode. As an example, the now extinct Arthur Andersen is a good example where the purpose of remaining as one of the world's big five accounting firms was killed by the wrong strategy client choice. An organizational structure values leadership in police profile. The second type of company out of those four could be called boldly going nowhere. And this company's organization is aligned with the purpose but not the strategy. Companies of this kind arm themselves with enough resources but cannot find ways to navigate power their purpose. Kodak is a sad example, where they had the resources. They had the knowledge to pursue this success in digital. But the strategic direction was always based on film. Well, the rest is history. Third type of company, let's call best of intentions, but incapable. Here, strategy supports the purpose, but structure does not support the strategy. Companies in this class know where they want to go, how to go. They just can not get the right resources and organize them. Years ago, the Saturn car company, a division of General Motors, achieved great success. This was in the 90s. Their purpose, becoming an innovative company for the future was matched by the strategy. Nevertheless, its success did not go well with other GM divisions. And these divisions drained the resources from Saturn. Without the organization needed, the Saturn operation was closed in 2010. Fourth type of company we call, very best chance of winning. In these companies strategy & organizational structure support the purpose. These companies display superior financial performance, have a more positive work climate, and have fewer turf wars. People like being part of winning teams. Nowadays Tesla Motors, with its all-electric energy vehicles, energy charging and storage solution, looks like a company that has aligned organization to strategy and later to purpose. This illustration summarizes the four states of strategic alignment. Is your company in the very best chance to succeed quadrant? It is, great. Now let's make sure marketing and sales are also aligned. We'll talk about that during our next meeting, see you then, ciao. [SOUND]
