At a Glance
- Strategic alignment is the key to achieving organisational goals, but it is rare.
- Aligned teams have a deep understanding of the organisation’s goals and are in a better position to make well-informed, effective decisions that will improve work delivery, quality, and speed.
- The Five-Star Strategic Alignment Model is a flexible framework for aligning your organisation’s capabilities, resources, and management systems with your strategy.
Strategic alignment, the state in which all day-to-day business activities work together to achieve overarching goals and long-term vision, is a natural consequence of effective strategic planning. Yet research shows that, while over 80% of employees believe their organisation is closely aligned with the business strategy, only 23% of organisations achieve this alignment.
For an organisation to be effectively aligned, every team member must understand the overall business strategy, including where they fit into it and how their work contributes to the bigger strategic picture.
It is easy for senior leaders to get stuck in an echo chamber without realising that the organisation’s capabilities are not supporting the established strategy. No matter how bold your ambitions, you will fall short of your potential if your strategy, purpose, and organisational capabilities are not aligned.
Benefits of strategic alignment
As demonstrated by the figures above, true strategic alignment is rare. But when it happens, it is a distinctive competency that is a competitive advantage. In companies where everyone is working towards common goals, employees are highly engaged, and more productive and such companies experience a 23% increase in profitability.
Aligned teams have a deep understanding of the organisation’s goals and are in a better position to make well-informed, effective decisions that will improve work delivery, quality, and speed. Teams focus on creating value, not just output, because they can see the big picture and accurately predict how their efforts will contribute.
How to drive strategic alignment in your organisation
The Five Star Strategic Alignment Model is a starting point to ensure that all of your organisation’s capabilities, resources, and management systems are implemented in service of your strategy. It is not intended to be used sequentially. Rather, you should revisit it and make modifications whenever you identify a misalignment.
Strategy formulation: setting the direction
Start by clearly defining strategic goals. Engage the senior leadership team and other key stakeholders in intensive discussions to understand the long-term business goals. Once you have established these goals, use them to structure a business model that will drive revenue and growth.
Structure: align the organisational framework
Determine which organisational structure best supports your business model. Aligning the structure through strategy mapping ensures that reporting lines, responsibilities, and roles facilitate the achievement of organisational goals.
Processes: stream workflows
Engage internal and external stakeholders to identify the necessary information flows, processes, and workflows. For example, manufacturers should consider how all aspects of their supply chain can be optimised for efficiency. Incorporate feedback loops and periodic reviews to ensure that processes remain aligned with your strategic goals over time.
Rewards: incentivising performance
Create a reward system that encourages behaviours that align with your business model and strategic goals. If your top priority is customer service, set up incentive programmes that reward employees for high customer satisfaction ratings. The reward system should be transparent and achievable, encouraging employees to make a meaningful contribution to the organisation’s goals.
People: cultivate the right talent and mindset
Assess the skills, competencies, and mindset your people need to achieve your business goals. You may need to invest in training programmes to improve technical skills or foster a culture that encourages continuous learning and adaptation. Be specific about the type of mindset you need. If agility and innovation are key to your strategy, you should actively encourage these traits in your team.
Reshaping the future through strategic planning and alignment
Many organisations experience setbacks on the journey to achieving high-level goals due to an execution gap. This gap is largely due to a lack of proper strategic communication across the organisation, which consequently, resulting in misalignment between departments and individuals.
Without effective communication, leaders’ vision and goals can be lost or diluted as they cascade down the organisational hierarchy. Misalignment lowers morale and leads to inefficient use of resources. Effective strategy implementation requires the collaboration of all departments: field operations, finance, human resources, marketing, and relevant partners such as suppliers.
If your organisation needs to build a strategy to drive value and profitability but doesn’t know where to start, it is best to leave it to subject matter experts who have a deep understanding and experience of the subject.
Rather than building a standard, one-size-fits-all strategy, we work closely with your organisation and people during the strategy formulation process and stress test through scenario planning.
Through our assessment, our consultants and subject matter experts can identify risks, pain points, challenges leading to misalignment and ill-defined initiatives. With over 25 years of experience in taking projects through to full adoption using our behavioural and cultural change methodologies, we will guide your senior management and employees at all levels to ensure vertical and horizontal strategic alignment.
Design and deliver a future of growth for my organisation.