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Strategic Alignment: A First Take

To help understand why it is so difficult to sustainably improve alignment, this post takes the concept apart within the organisational context

We have an intuitive sense that there is a relationship between the success of an organisation and the degree to which it is aligned, both internally and with its environment. We also have a sense that alignment in some way helps make an organisation more efficient. But to do something about increasing alignment we need a more robust understanding of what it is. Unfortunately that’s not as straightforward as it seems. So to make things a little easier let’s take a closer look at what alignment might mean in a small organisation in a very specific area, i.e. strategy, and then extend it to see why it is so difficult to define alignment.

At its simplest, a strategy is a view of the organisation at a certain point in time in the future and a set of actions designed to make it happen. At the organisational level, strategy might be articulated in terms of a vision and a set of strategic focus areas that could be associated with a set of strategic initiatives. One level down, each of the functional areas, e.g. marketing, might also have a strategic plan. Vertical alignment between these two levels refers to the correspondence between the organisational strategy and the functional strategies. This alignment could be achieved in several different ways. For example, the marketing function could articulate its own version of the vision, perhaps in terms of what brand value, and define a strategy to realise that aspect of the vision. Another way would be to share the organisational vision, but establish a distinct set of marketing initiatives. A third way might be for the marketing plan to be just a ‘marketing view’ of the organisational strategy, i.e. share both the vision and the same focus areas or initiatives, but participate in them. Any of these could be valid, so it is difficult to specify what alignment might mean even when we are looking at this small subset of an organisation.

Now let’s extend this downwards in the organisation, to teams and individuals, and as we do this, it seems to become increasing difficult to say exactly what alignment might mean. For example, at the level of the individual, alignment could range from complete alignment (individual is fully committed to the organisation) to none (disengaged employee). Moving upwards, we could also imagine this company as part of a strategic business unit, which is itself part of a conglomerate. Here, strategy would need to be aligned across a further two levels. Given the strategic business units in a conglomerate may operate in very different environments and not even share customers with other strategic business units, alignment at these levels is fraught at best. We must also consider alignment as it relates to the organisation and external parties, e.g. its stakeholders, business partners, suppliers and other aspects of its environment.

We can extend our exploration to alignment along other dimensions. Horizontal alignment is the correspondence between strategies at the same level in the organisation. Complete alignment would mean that all of the strategies at the functional level, e.g. marketing, sales, production, information technology and human resources are completely integrated. And then, alignment in time is the correspondence between strategies with differing time frames. One organisation might have a short term strategy, for example to get listed on the share market, or at the other extreme, one with a 100-year horizon (see here and here).

We can also extend our consideration of alignment within the organisation to elements other than strategy, e.g. structure. Let’s take a global multinational as an example. If the sales organisation within a country unit reports to the corporate office directly, but one of the functional areas reports to the corporate office via a regional office, this can lead to issues with cascading of objectives, coordinating change and reporting performance. Clearly, structural alignment is important. Business processes represent another organisational element that needs alignment. Some organisations have detailed work instructions for each process that must be followed meticulously regardless of location, while others take a more hands-off approach and let each unit develop their own process.  Some of us are familiar with what happens when different parts of the organisation have their own ways of dealing with the same customer. On the other hand, we may have experienced the frustration of retrofitting into a country organisation a process designed for a corporate office environment. Other than strategy and process, several other elements, such as culture, that can be aligned to varying degrees along the vertical, horizontal and time dimensions.

We have now looked at what alignment might mean for one particular element, in this case strategy, in different parts of an organisation or points on its journey. But we can extend the scope of our exploration even further consider alignment between different elements. It is intuitively clear that alignment between different elements, e.g. strategy and structure, is important, but the need for alignment often comes into stark focus during times of organisational change. Restructuring exercises can be difficult because it is not easy to make changes to processes so that they can operate with new structures and mergers have been known to fall apart because of cultural differences.

What this brief overview shows is that organisations have a large number of moving parts that need to work together harmoniously, possibly more than we can reasonably consider at any point, so it is fair to say that the concept of alignment is complicated. Further, much of the alignment happens almost without our realising it and this can sometimes become apparent only when someone leaves the organisation or a restructuring takes place when we very quickly find out what we didn’t know. What happens when events such as these take place is often very different from what we expected, so alignment is also complex. Finally, one of the implications of the large number of factors to consider is that when we are introducing change it becomes necessary to focus only on certain aspects we deem important and to ignore others. This represents a choice made by a human being about what should or should not be considered, and this choice is made based on that person’s experience and intent. It is also worth considering whether a state of alignment is really objective, i.e. something out there, or something that each of us sees differently, i.e. in our heads.

Now that it is clear that strategic alignment is complicated and complex, as well as shaped by human experience and intent, it is probably not a surprise that organisational change efforts are not always successful. To get an even better understanding of why, we will in the next post revisit alignment within the context of the four motivations and Pepper’s four perceptual lenses.

If you are interested in learning more about organisational alignment, how misalignment can arise and what you can do about it join the community. Along the way, I’ll share some tools and frameworks that might help you improve alignment in your organisation. Use the contact form below to subscribe.

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