Calculating the cost of alignment

Successful leaders understand the real cost of not having everyone in synch — and they are quick to address gaps in understanding or commitment that create a drag on performance. Upfront group alignment can ensure delays don’t derail plans and financial commitments.

But what’s the benefit of investing in group alignment?

The following examples quantify the benefit of bringing alignment that accelerates results or avoids possible delays. Relevant scenarios include IT system upgrades, post-merger integration, new product launch, new supplier activation or any other project with specific financial metrics built in to a company’s operating plan.

Assume a project that delivers a bottom line run-rate benefit of $1 million. A 3 month delay is worth $250k. A 6 month delay is worth $500k.
Assume a 10-person project team costs $150k per month (or an average of $15k per person). A 3 month delay is worth $450k. A 6 month delay is worth $900k. That’s a real bottom-line penalty for not achieving expected results.
Taken together (the forgone run-rate bottom line benefit and extended cost of the team): A 3 to 6 month delay is worth $700k to $1.4m.
And what about the value of your key management’s time? What if you could eliminate 50% of your meetings? What if you could cut meeting time in half? What would you do with the time you gain from aligning upfront?