Complete Guide to Strategic Alignment

Total reading time: 91 minutes

Chapter 1: What is Strategic Alignment?

Strategic alignment is the process of getting everybody working towards a common strategy in a business setting. The process involves "ensuring the entire workforce understands, shares, and supports the company's vision and goals," according to Smarp. It also consists of adjusting processes, policies, and incentives to support a common goal.

Alignment, more broadly, is about getting elements of a business (including its people) to work together toward a common goal.

What alignment is

Alignment is a core pillar of an autonomous organization and modern management practice. Alignment:

  • is a process for getting all of the parts of an organization working together towards a common purpose
  • is fundamentally about communication
  • requires consent and buy-in. It is not possible to get alignment by merely declaring a goal, priority, or strategic plan. Leaders must rally their people and get their people to subscribe to their strategy.

What alignment is not

In the past, businesses could achieve alignment by creating rigorous processes that virtually eliminated decision making. Managers would then spend time ensuring compliance with the process. All strategic concerns were made by a few people at the top, leaving frontline workers as little more than cogs in a wheel.

That may have worked in an Industrial Era business, but it is not longer suitable for today's work. With the shift toward knowledge work, alignment no longer is:

  • about following procedures and processes with exactitude. To be agile, organizations need to provide greater autonomy and context to their workforce. Leaders need to empower individuals at all levels to make the right decisions.
  • synonymous with centralized control. Chain of command is only one organizational design that can create alignment. Organizations must pick the architecture that is right for their customer, market, and workforce.
  • created through reporting lines. Even in the most hierarchical organizations, leadership loyalties rarely follow the org chart. Senior leaders should actively look for hidden influencers within the organization and work with them to foster alignment.

What are the types of alignment in organizations?

Strategic alignment is not the only form of alignment. In this guide, we'll also discuss other forms of alignment, including:

  • Organizational alignment — the overall process of getting people, processes, and plans in sync with each other.
  • Functional alignment — alignment between the organization, the functions (e.g., product, engineering, accounting) in the organization, and between functions (e.g., sales & marketing alignment).
  • Incentive alignment — alignment of incentive structures and behaviors (e.g., commission-based compensation)
  • Employee-role alignment — alignment of specific employees to the role(s) they perform.
  • Company-role alignment — the suitability and value that specific roles offer an organization.
  • Customer alignment — alignment between a company and its customers. This term often describes the mechanisms a company uses to deliver the value that customers want.
  • North Star alignment — alignment around a singular purpose or goal, including a company's mission or vision.
  • Purpose alignment — the degree of alignment to an organization's purpose. Do a company's actions live up to its mission, vision, and values?
  • Leadership alignment — does the leadership team match the organization's needs and purpose?
  • Performance management — this type of alignment is all about setting and managing goals, which drive specific financial (performance) outcomes. Most alignment tools focus exclusively on performance management.

We have a detailed article explaining every type of alignment on our blog.

Managers and executives should work together to formulate a strategy to address alignment across the organization. There is no one-size-fits-all solution; instead, organizational leaders should think about the right approach to aligning their people according to their specific needs and objectives. The rest of this guide provides actionable advice that applies to most organizations.

Alignment is not micromanagement

There's a popular misconception that focusing on alignment will lead to micromanagement. This belief could not be further from the truth.

Alignment requires delegation of responsibility. While it is possible to achieve a semblance of alignment by making all decisions at the top of an organization, a company can't achieve full alignment if only a select few people are allowed to use their expertise to make decisions.

Output and performance suffer in an environment rife with micromanagement, and organizations begin to lose alignment. Efforts to manage every aspect of work individual contributors disrupts buy-in, causing contributors to no longer feel invested in the strategy.

Companies with a high degree of micromanagement and poor alignment are less competitive and customer-centric than their well-managed and aligned peers. The same companies tend to lose their top people, who opt to leave for an environment that offers more growth opportunities and autonomy.

Instead, leaders should offer the right strategic and contextual information for individual contributors and lower-level managers to make decisions that align with their organization's purpose.

Alignment and autonomy

Alignment (and accountability) allows individuals to operate with greater autonomy, because it ensures decision making supports a common goal. Autonomy should be a goal for savvy managers, as it provides numerous benefits, including:

  • Individuals can get more done in less time.
  • Teams can meet the needs of all stakeholders.
  • Organizations can grow sustainably.

Autonomy also boosts morale, decreases employee turnover, and reduces the cost of operating an organization.

However, enabling autonomy alone is not sufficient. Without the proper context and incentives, individuals are unlikely to work together towards a common goal. Leaders must play the coach's role, guiding people towards a common objective and outcome. The role of a leader in an autonomous organization is to provide their people with the tools they need to succeed.

The other key pillar is accountability. Alignment and accountability go hand-in-hand. There's a popular saying that says, "autonomy without accountability is anarchy." Accountability ensures each individual actually meets goals and progresses the business toward its purpose.

Connecting the dots

The generic definition of alignment is "arrangement in a straight line." While this may be true for other forms of alignment, organizations are rarely linear.

The traditional way of thinking claims alignment is about lining everybody up, but it's really about connecting each part of an organization.

Instead, leaders should think of alignment as more of a graph, where each node of that graph is connected. Items should connect in a meaningful way, all in support of each other. While it is still essential to think about an overarching purpose, goal, or pursuit at an organizational level, few companies can afford to be only focus on a single activity.

Social graph theory stipulates that everybody is connected in some way. Businesses work the same way. Leaders of an organization should pay careful attention how each resource (human, capital, etc.) in a business is connected.

This interconnected way of thinking about alignment is related to the concept of social graph theory. People, activities, resources, and tools should all be connected in a meaningful way. When an organization has components that are unintentionally disconnected (siloed), leaders need to think carefully about how to realign those components.

What alignment really looks like, in practice.

We prefer the "graphs, not lines" approach to alignment because it is more representative of how relationships form and individuals work together. Organizations are nothing more than a collection of people working toward a common purpose. It is the manager's primary goal to ensure each part of the graph fits together (aligns) and supports a common mission.