This page is meant to serve as an explainer of the various strategy alignment models that exist to compare the differences of each. For more up-to-date content and a comprehensive overview of strategy alignment, please visit our Strategy and Execution capability page.
Effective teams only exist within a company that understands strategic alignment. Because you can only call a team effective if it efficiently helps you meet your big business goals.
A strategic alignment model is an overview of all the existing factors that support each other. These work together within an organization to realize a company-wide shared definition of success.
This article looks at the benefits of creating a strategic alignment model for your organization. We'll discuss how you'll utilize these models to support highly effective teams. Plus, we'll walk through a real-world strategic alignment model a global financial company is using today.
Benefits of Strategic Alignment Models
A strategy alignment model:
- Nurtures each team's true potential
- Instills the common sense of purpose highly-engaged top talent seek when they choose to join a company and decide to grow with over the long haul.
- Enables goal-aligned decision-making at every level regardless of role or responsibility
- Connects strategy to execution (e.i., what you plan with what happens on a tactical level)
- Reveals the overlap of supportive relationships among teams
- Enhances cooperation and collaboration among teams
- Helps you visualize how everything works together to meet business goals
How to Utilize Strategic Alignment Models
Utilize strategic alignment models to understand how information, effort, and resources need to flow within the organization among teams (horizontally) and among layers (vertically).
Communicate Progress
McChrystal Group has independently surveyed thousands of employees within organizations and discovered that 66% of employees believe that leadership communicates how what they do contributes to team goals. But only 53% say the same about big company goals.
Now, we know some people may see this glass as half full.
But this means nearly half of a company's employees aren't sure about the connection between their day-to-day decisions and the company's reason for existence. This impacts how they make the day-to-day, in-the-moment micro-decisions that add up to more than the sum of their parts.
Create a Shared Definition of Success
Only 37% of employees believe each team shares the same definition of success. And the higher you go up in a company, the less confidence people have in this when only 29% of leaders see a shared definition in their companies.
Use your strategic alignment model to define True North and how each team works together to further that North Star goal.
More Effectively Allocate Resources
Only 40% of employees we surveyed said leadership allocated resources fairly. When these many employees feel they lack the resources needed to do their jobs, we've missed the mark somewhere.
This isn't a call to throw money at your problems and expect them to fix themselves. Lack of resources can exist due to a lack of leadership training and coaching, technology investments, and collaboration, just to name a few. So, you need to investigate and define the problem.
A model helps you know where to start.
Additionally, the "perception" of poor resource allocation occurs when leaders are not effectively communicating the company's big goals and progress toward them. We can quantify the impact of this communication vacuum with another finding. Employees who say their leaders provide them with frequent progress updates are 8X more likely to believe resources are being distributed fairly.
A strategic alignment model helps you visualize what's most important to ensure you're investing time, talent, mindshare, resources, data analytics, and money toward those priorities.
Find Your Operating Rhythm
Your model connects strategy with execution—two layers that live on very different timelines.
Utilize the model to help employees know how to make decisions that further the company's goals regardless of role or responsibility.
3 Layers of the Organization
Companies exist in 3 layers, with each layer living in a different world from the others because it has its cadence.
Strategic (C-suite). This layer researches, analyzes, debates, and develops a data-driven strategic approach. The cadence of information flow comes in quarterlies, annual results, and 5-year plans.
Operational (Middle Management). This layer allocates the resources, establishes the processes, and keeps teams running. Their cadence is in monthly reports.
Decision-making often involves handling complex and escalated situations funneled up from the next layer. They also receive delegated responsibilities from the layer above them. In a misaligned organization, information may also travel through them and get lost in translation.
They're quite literally "stuck in the middle".
Tactical (Front-line, Execution, Customer-facing). This is where strategy is implemented in real-time. Every micro-decision that tactical teams make moves us toward or away from our goals. So, the more aligned tactical is with strategy, the more their decisions add up to progress.
Tactical employees have to think on their feet. They don't have the luxury of taking time to analyze every decision. So, leadership must communicate the True North they use to guide decision-making.
Finding your operating rhythm allows each of these layers to continue functioning in its own cadence while effectively communicating with others in a unified operating rhythm.
For example, it's critical for the strategic layer to communicate progress toward the shared North Star Goals with the tactical layer directly so nothing gets lost in translation. This keeps every team in the company working toward these goals regardless of what they do.
The tactical layer must also be able to communicate with the strategic layer directly, telling them what they're seeing on the ground and experiencing. These insights may influence short-term and long-term resource allocation strategies.
You're promoting agility.
This two-way communication builds trust. C-suite is more confident in the ability of team members to make effective decisions to promote company goals. At the same time, front-line contributors can see how what they do furthers company goals.
See Everything You Need to Know About Strategy Alignment for more details.
Support Highly-Effective Teams
Utilize your model to build more highly effective teams that understand we work together to achieve goals.
Effective teams are made up of individuals who are more engaged. Companies with highly-engaged employees are 23% more profitable and experience a 10% higher customer rating.
Customers are drawn to people who passionately work together to meet common goals—and so are the people you want to work for you.
Attract and Retain Top Talent
A 2022 Microsoft Work Trend Index Special Report found that employees who feel that their priorities are clear are 4X more likely to stay with a company and 7X less likely to look at other job opportunities.
They know they're already in the right place!
How Do You Create a Strategic Alignment Model?
Strategy alignment will be unique within each company. There is no cookie-cutter organization.
We'll use "we" here because the strategic alignment model you create will apply to everyone in your organization.
Vision or Mission Statement Becomes Our "Why"
This is a statement of why we exist. It speaks to our direction and what we believe the future holds.
Values Are How We Act and Make Decisions
Values aren't just ideal in a perfect world. They're the framework for company culture. They determine our behaviors and where we focus our time, talent, mindshare, and money.
Many companies have a list of values like "honesty". But we should ask ourselves what this really means in an aligned organization.
If honesty is indeed the value of a strategically aligned company, then everyone at every level never ever omits or tells a lie.
While admirable, that's a tall order—and not practical.
So, instead, think about this in terms of systems and "culture" we could establish within an organization like:
- We work together to achieve our goals.
- We put our resources into collaborative technologies so we can work together.
- We share information to support each other.
- We all succeed within our teams and work toward the North Star Goal we share.
Objectives and Goals Are What We Want to Accomplish
These include goals on every level, including that North Star Goal we're all working toward.
All goals should be measurable, quantifiable and time-bound. If they're not, then "progress" is abstract and debatable.
Constituents, employees, stakeholders, and shareholders may all have their own set of goals and objectives. But we have North Star Goals everyone is working toward. And each of these works toward the mission (the ultimate North Star Goal).
Strategy Is How We're Going to Do It
Strategy describes our method or approach. It includes where we're willing to take risks and how we approach risk-taking.
Initiatives Are Our Priorities
This is where things happen. Initiative is where we actually put our resources (mindshare, training, money, etc.) to accomplish our goals.
Initiatives focus on the critical few areas within an organization that deliver most of the results. That's not to say we leave every other team to fend for themselves. On the contrary, when we focus "here" as an organization, every team becomes more highly effective.
Initiative describes actions, outcomes, and expectations within highly effective teams and across our organization.
This is possible because we know how different teams support and are supported by other teams. We strengthen those bonds, streamline the hand-offs, enable effective collaboration, and create feedback loops to open up lines of communication.
Strategic Alignment Model Example: Intuit
Intuit is a well-known company. They were founded in 1983 by Scott Cook and Tom Proulx, who recognized the potential for personal computers to revolutionize how individuals and organizations manage money.
They may seem unified now. But not long ago, Intuit had a strategy alignment problem that impacted how people saw the company and the company's ability to meet their goals.
They had 3 distinct lines of business: Personal Finance (Tax Act, Mint,etc.), Small Business (Quicken, Quickbooks), and Financial Professional Tools (ProSeries, etc). Each was treated as a separate company. Despite having a global presence, they did not share information or a sense of purpose.
For decades, each kept adding to its offerings without considering the supportive relationships among them—not to mention the shared audience.
Think about it!
People who need personal finance tools also start small businesses. Small businesses become large ones that need big finance departments.
The siloed thinking meant that they were not seeing the whole customer lifecycle. Because of it, they were missing the opportunity to build trust that would result in upsells, cross-sells, and loyalty.
They needed to unify in purpose to make QuickBooks and MailChimp the clear choice for a brand-new entrepreneur who already uses Tax Act and Mint.
But the choice isn't logical if the tools are very different, don't communicate, and are seen by customers as different companies (because that is how they're run).
Building a Strategy Alignment Model for Intuit
Here's what the strategic alignment model McChrystal Group helped Intuit create to achieve strategic alignment looked like:
- Mission (Why?). To improve our customers' financial lives profoundly to the point they can't imagine going back to the "old way".
- Values (How We Act/Make Decisions). They chose two primary values for their model: Integrity Without Compromise, and We Care and Give Back. They then describe in action words what they would do.
- Be Bold, Be Decisive, Be Passionate, Learn Fast, Win Together, and Deliver Awesome
- Goals/Objectives (What We Want to Accomplish).
- Employees. Create an environment where the world's top talent can do their best work.
- Customers. Delight customers more than the competition when it matters most (i.e., we focus on the critical few).
- Shareholders. Inspire confidence in our growth over the long term...which causes the stock price to rise.
- Strategy (How we plan to approach). Intuit has two primary strategic focuses: Be the Operating System Behind SMB Success & Do the Nation's Taxes. Under these, they describe strategic actions they plan to take to apply these strategies (connecting strategy with execution)
- Deliver Awesome Product Experiences
- Enable the Contributions of Others (e.i., promote effective collaboration)
- Use data to create delightful experiences
- Initiatives (Our priorities). This is where Intuit has decided to invest resources.
- Win online & Mobile
- Win Globally
- Unify SMB resources
- Everything as a Service
Beneath initiatives, they outline the metrics they will use to measure success in each category. For example, under Unify SMB resources that have this metric: the percent of online business offerings with a single identity.
It's measurable, quantifiable, and trackable over time.
McChrystal Group's Strategy Alignment Model Helps Teams Work
A strategy alignment model drives the results that matter. It helps you conceptualize an environment where highly-effective teams can exist. It connects strategy to execution. Organizations perform when teams work. Schedule a call to unlock their true power.
