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Growing a business in a way that nurtures alignment instead of stunting it persists as a famously difficult task. And it’s only becoming more important. According to research by LSA Global, organizations that are “highly aligned” grow revenue 58% faster and are 72% more profitable than poorly aligned organizations.
How can leaders rethink their businesses’ organizational structures to make alignment possible? How does alignment translate from an aspirational buzzword to a resonant reality?
Enter the concentric circle model of communication, an organizational structure that understands the importance of alignment in business and the need for collaboration, community and shared outcomes. The methodology needs not replace existing organizational structures but augment them.
Related: A Step-by-Step Guide to Achieving Organizational Alignment
The concentric circle model and the future of organizational thinking
The concentric circle model is an organizational way of thinking. It places the residents of your world in a ripple effect instead of in a tree or ladder-like structure. From partners (the strong core of the business and its mission) to employees, beta testers, community members and back again, the concentric model helps information flow freely across groups.
Imagine a startup aimed at developing sustainable technologies. In the concentric circle model, you’d see the following:
- Core: The founders and primary stakeholders setting the vision.
- Next circle: Employees bringing the vision to life.
- Following circle: Principal informants providing crucial feedback.
- Outer circle: The wider community interested in its mission.
In a traditional hierarchical model, communication between different groups might be linear and restrictive, whereas the concentric circle model promotes a continuous exchange of ideas and feedback. This means that engineers can receive input from the community, which helps them understand their technologies’ real-world impact and potential improvements. Additionally, the core team’s vision and updates can not only reach employees but also target audiences and the broader community. This ensures everyone is aligned and fosters a shared sense of purpose.
As the company evolves, each ripple in the concentric model contributes to a continual feedback loop that drives innovation, alignment and a strong communal bond toward achieving the mission of sustainable technology.
The benefit of this mindset is that it is mutually collaborative. Values can be shared from group to group — no matter where that group sits in the circle. Because of that sharing, the business can become quickly aligned on economic outcomes and a sense of common purpose. In turn, group members can take bold action, knowing they’re in unity with the whole circle.
At my company, this means pursuing a true everybody-wins culture from a financial perspective. When the product succeeds, shoppers save money, businesses make more sales and our company earns more money, which allows us to reward users. When the company revenue grows, our stakeholders also share in that growth.
Related: Why Aligning Your Company Values is Crucial for Long-Term Success
3 ways to make the concentric circle model work for your business
The concentric circle model of communication might sound like a fabulous idea, but how can you put it into practice? Does it require a complete renovation of your business’s organizational structure? Not necessarily. It’s a way of thought, and practicing it well means keeping some key methods in mind:
1. Identify your stakeholders
To make the concentric circle model of communication successful, you need a holistic, working knowledge of your organization. What parties do you need to include in your vision? What are their roles? What are your organization’s layers? One business might include beta testers and influencers; another might include a wide network of suppliers and volunteers.
Identify key stakeholders and assess the impact of their actions on your business or product to determine their positioning within the circle. For instance, those with higher impact are placed closer to the center. Those who are folded closer into the circle often have higher participation in decision-making. To bring outer echelons inward, involve more stakeholders. For example, Demand.io’s SimplyCodes product not only asks for constant user feedback, but also identifies product champions to employ in an internal council of high-expectation users who earn a stipend for their valued input.
2. Find agreement on shared goals
The purpose of the concentric circle model is to create a collaborative way of working and making decisions based on a shared vision. Achieve this by establishing your business’s core goals. Across the layers of the circle, you must design and tweak your aims to align with the community. Begin with the nucleus of partners and decision makers to form a set of core initial ambitions and then find unity in the wider circle by collaborating.
Goals could be economic, or they could be product- or service-related. Maybe your goals are to grow your business into new territories; maybe it’s to condense your impact and make your business more community-centric. No matter your ambitions, shared goals can lead to shared outcomes. The above research from LSA Global found that highly aligned companies outperform their peers in retaining and satisfying customers, engaging employees and leading effectively.
Related: Your Public Messaging Strategy Starts With Your Inner Circle
3. Align your values
If you’ve followed the above steps, you’ve established a strong working knowledge of your organization, its various layers and how they function in your circle. You’ve also set goals you’ll aim toward collectively. The final piece of the puzzle is values. Currently, your organizational values might be fragmented. Different groups may want different things and be guided by conflicting values, but the concentric circle model encourages you to zero in on the values shared across your community. Aligning these values will have a unifying effect on everything you do.
In applying the concentric circle model, every major business decision should be held up to the model, and leaders should consider whether benefits ripple across the whole circle. To aid alignment, you need not necessarily agonize over perfect plans but discipline your vision and mission to be authentic and considerate of every layer of your circle. Driving business strategy toward shared outcomes encourages the team to ideate innovative and sustainable business flywheels instead of juggling adversarial relationships.
The CEO of Chicken Salad Chick implemented a concentric circle model in the business. With a strong focus on community growth and awareness to pave the way for future expansions, the brand went from 32 restaurants in 2015 (when the CEO joined the company) to more than 220 today.
The concentric circle model is an important tool for thinking differently about business value alignment. It may not replace hierarchical structures, but it does respond to the future of business leadership as the landscape evolves. By beginning with a strong core and radiating values outward through the various layers of the organization, the concentric circle model can forge deep, lasting, productive connections among stakeholders and communities.
This story originally appeared on Entrepreneur
