Strategy alignment is the key to a productive and fully engaged team. Without it, highly passionate teams work hard while big business goals remain unmet. This article explores the answer to "what is strategy alignment?"—with examples. Plus, see how to create strategic alignment models that effectively align strategic with tactical execution. For a more in-depth look at this topic, we invite you to check out our Guide: Everything You Need to Know about Strategy Alignment.
Strategic alignment is an active leadership approach that aligns each team's function with top leadership's purpose.
It connects strategy with execution, clarifies priorities, enhances collaboration, and enables data-driven decisions at every level.
Everyone knows what the North Star goal is in an aligned company. They also get regular updates on the company's progress toward it. As a result, they move toward it more effectively—together.
Why does alignment not come naturally? The truth is that C-suite leaders are thinking long-term—in quarterlies and five-year plans.
All the while, the front line doesn't have the luxury of researching and pondering every decision. They're taking tactical actions—at the moment.
Small front-line decisions add up. Your level of strategy alignment dictates whether those add up to meeting big-picture goals.
Strategy Alignment/Strategic Alignment Is a Common Struggle
Independent research conducted by McChrystal Group has found that many organizations struggle to unite on purpose. It's impacting their ability to meet the company's big goals.
Only 37% of people surveyed believe every team shares a vision of success.
What are the Different Types of Strategy Alignment?
Often, alignment happens in two different ways—and we'll say up-front, one of these types of strategy alignment is not ideal.
Bottom-up Alignment
In bottom-up strategy alignment/strategic alignment, your front-line managers look at company goals. They compare that to their roles and responsibilities. From this, they create a ranked list of priorities.
In a perfect version of bottom-up strategy alignment, each manager gets feedback from their boss. They, from theirs, up the org chart.
However, in this scenario, we're counting on the front-line manager and whoever is between them and you in the leadership structure. They must know this needs to happen—and how to go about it.
That's not a given! This is a taught and coached behavior.
Bottom-up alignment is surprisingly common.
We found that only 52% of leaders with multiple priorities believed their boss had communicated, which is the most important.
Top-down Alignment
Alternatively, in a top-down strategy alignment, leaders play by a different playbook. They define the priorities and communicate why this is the priority. But don't mistake defining the priorities with making decisions solo.
Don't prioritize in a vacuum. Include your team and assess the criticality of their current focus, redirecting them to what matters most."
Ted Delicath, Principal
When you define the priorities from the top, everyone down to the front line knows what's important and why. Now, every decision is aligned with a North Star goal.
This isn't micro-managing.
On the contrary, you're empowering everyone in your organization to feel confident in their real-time decision-making abilities. They have enough information now to know the right decision in the day-to-day operating rhythm they work within.
C-suite strategically thinks in annual earnings The front line is living in tactical moment-to-moment micro-decisions. But we're all working toward the same goal.
Strategic Alignment Examples
Financial Example
From a financial perspective, strategy alignment/strategic alignment is about where you choose to spend your money. According to Microsoft:
Strategic alignment is a way for you to analyze, in terms of dollars spent, the extent to which your project spending supports the achievement of your organization's business goals.”
In other words, to what extent are the teams—the people—you're investing in delivering ROI? If you've set smart North Star business goals, then meeting those big-picture goals should equal ROI.
It's critical to invest financial resources in your priorities.
But this isn't happening in many companies.
40% of employees feel that organizations distribute resources fairly. However, in the same survey, we found employees are 8X more likely to feel this way when they see frequent updates from leadership progress toward the big goals and objectives.
Customer Service Example
You've identified customer experience as a driver toward growth. As a result, your organization has committed to providing exceptional customer experiences. This is one of your top organizational priorities, a North Star goal.
Strategic alignment involves determining how this goal translates into the day-to-day actions of employees across departments that impact customer experience. These not only include those who directly face customers. The teams around them impact their ability to deliver exceptional customer experience. Here are just some examples:
- R&D
- Marketing/Sales
- Manufacturing
- Quality Control
- Logistics
- Finance
- IT
Teams are interdependent—some more directly than others!
When you talk to these teams about what they need to succeed and eliminate the siloes so that each can collaborate, you create highly-productive teams.
R&D Example
Do you have a goal of being an innovative company? Maybe you want to be the first to bring new ideas to market and position your organization as an industry disrupter.
What is strategic alignment going to look like if this is your goal? For R&D to innovate effectively, these need to exist.
- C-suite and finance, in particular, need to support risk-taking.
- IT must ensure that departments can collaborate and share data.
- Data analytics must provide reliable insights regarding customer preferences and trends.
- Marketing and sales need to focus on customer retention and leveraging that customer loyalty. These are your early adopters. They get the word out to generate demand for something few have heard of.
R&D does not succeed in innovation independently. These are just a few departments that must be pointed toward this North Star Goal of "Being Innovative" to progress in meeting this goal.
Operations Center Example
One of the most significant barriers to strategic alignment is communication and collaboration silos. McChrystal Group partnered with a top public transportation company struggling with that.
We uncovered some interesting findings when we surveyed employees to learn more about how they experienced the company.
- Only 25% saw others in the organization as a good source of information. People didn't trust one another.
- Only 24% of front-line employees believed leaders collaborated with other team leaders. The front line experienced a lack of alignment toward a common goal in their everyday operations.
We worked with leaders to streamline the chain of command and create a sense of unity across departments and roles. We also trained and coached management on how to lead highly-productive teams that collaborate across the company to deliver a superior customer experience.
We encourage you to take a closer look at our process here.
How to Utilize Strategic Alignment Models
Strategy alignment models connect strategy with execution. They allow your organization's strategic, operational, and tactical layers to operate on their own very distinct cadence (5-year, annual, quarterly, in-the-moment, etc.).
Simultaneously, each layer finds an operating rhythm that stays in sync vertically and horizontally across the company.
Every model is unique but includes these components:
- Vision/Mission Statement. This defines your direction.
- Values. How do people in your company act?
- Objectives. Objectives work in unison, all pointed toward the North Star goal.
- Strategy. What is your method and approach to getting things done?
- Initiatives. Where are resources allocated?
In building strategic alignment models, it's essential to consider these tips to develop an effective plan.
1. Connect Team Objectives with Company Goals
Only 53% of employees surveyed believe their company communicates how their objectives could impact broader company goals.
Without this connection, employees at all levels lack the context to make decisions that further the company's big-picture goals.
This causes a breakdown between strategy and tactics. Strategy is our approach to getting things done. Tactics are what people do day-to-day to get things done.
2. Provide Regular Updates
Only 53% of employees surveyed said that their organization regularly shared the status of objectives. To align your operating rhythm throughout the organization, everyone needs to feel informed about what's happening across the organization.
This isn't only to-down communication. It includes feedback loops so that C-suite and Operational layers know what's happening on the ground. At the same time, the front-line understands our progress toward the big company goals and how what they do impacts the outcome.
3. Develop a Communication Plan
You need a clearly defined plan to make sure this communication occurs between layers. This plan should include not only how information and updates flow among teams and to the next layer.
It's also critical that the tactical layer (front-line) be able to communicate directly with the strategic layer (C-suite) and vice versa. This ensures information isn't lost as it moves through the operational layer (middle management).
4. Create a Culture of Collaboration
Culture creation is complex. That's why so many companies try and fail miserably.
Culture indeed starts at the top, but you must invest in the resources people need across the company to collaborate effectively.
Bottom line: Within a healthy company culture, you can trust people to make the right decisions. This is possible when you communicate how what they do impacts company goals. They know how they're doing as a team, department, and company.
5. Define Strategic Business Drivers
Strategic business drivers become the priority goals to which your teams and resource allocations align, such as:
- Increasing product quality
- Expanding reach
- Diversifying
Pro Tip: Drivers must always be specific and quantifiable. You will regularly communicate progress toward this goal with the whole organization.
This becomes North Star all of them work toward. It's what keeps them aligned in purpose.
6. Keep Priorities Straight
Avoid getting distracted by "urgent" non-priorities. Follow the Pareto Principle. Stay focused on the 20% that gets 80% of the results.
7. Be Clear
Clarify and describe the outcomes and expectations.
8. Identify Interdependent Relationships
Acknowledge supporting and supportive relationships among teams. Strategic alignment models should state how you'll strengthen the links between teams.
Strategic Alignment Is Your Competitive Advantage
Strategy alignment is the key to a productive and fully engaged team. It helps you more effectively meet goals because everyone in the organization feels united in purpose. They understand how their decision impacts the goal.
For a more in-depth look at this topic, we invite you to check out our Guide: Everything You Need to Know About Strategy Alignment.
