What Is Organizational Alignment? (And How to Achieve It)

Organizational alignment, also referred to as 'strategic alignment', is a company's ability to get everyone on the same page about what needs to get done and how.

But importantly, it's also about a company's ability to paint the bigger picture and get every individual within the business to see themselves in it. Or, as organizational strategists Jonathan Trevor and Barry Varcoe put it in their HBR deep dive, organizational alignment is how you bridge "the gap between ambition and performance."

And if you're not hitting efficiency benchmarks or reaching your potential as an organization, you could have an alignment problem. But don't worry, there are ways to fix it.

What is organizational alignment?

Organizational alignment refers is a strategy to coordinate people, capital, resources, departments, and procedures in pursuit of a common goal. Organizational alignment will include both vertical and horizontal alignment, which will allow both separate functions as well as hierarchies within functions to work together more effectively.

Why is organizational alignment important?

Organizational alignment is critical to the success of any organization – be it a company, a non-profit, a school, or a government agency. When an organization is aligned, they are able to execute more efficiently and quickly. The benefits of organizational alignment spill over throughout the company.

Faster decision-making

When an organization undergoes organizational alignment, the entire organization can make decisions more quickly, and execute those decisions quickly as well. Decisions aren’t siloed from department to department; when every element of the organization buys into the decision, it gets executed more quickly.

Positive company culture

Organizational alignment has a positive impact on company culture. Why? Because each part of the organization sees how they function within the company and support the overall vision. Instead of pursuing an independent agenda that may be at odds with other factions within an organization, each department works together, which boosts company morale.

Increased trust

When a company undergoes organizational alignment, all elements of the organization end up following the priorities and ethics that the organization agrees on. This means that managers and employees have trust that folks at the organization are going to support the agreed-upon initiatives, as opposed to pushing for their pet projects.

Improved sense of purpose for employees

Employees, under organizational alignment, will see how their contributions impact the overall company mission. By seeing how their contributions make an impact, employees will gain an increased sense of purpose in their jobs.

Better company performance

Lastly, the entire company’s performance will rise as a result of organizational alignment. By not having competing or conflicting siloes and factions, a company will have all departments on the same page, working for the same goals. This, in turn, will increase speed, efficiency, and productivity – boosting overall performance.

What is horizontal alignment vs vertical alignment?

Horizontal alignment and vertical alignment are both types of organizational alignment. Horizontal alignment refers to different departments aligning with the overall company mission. Vertical alignment refers to teams and teammembers within a given function aligning with the leadership’s vision.

Why does organizational alignment fail?

If getting your numbers back on track and fighting employee disengagement feels like an uphill battle, know that you're not alone.

Organizational alignment is an ongoing challenge for every business, regardless of shape or size. For example, investment tech startup Betterment changed their approach to organizational alignment and employee performance management three times on the road to reaching 100+ employees.

And since the beginning, massive household names like Starbucks have built their empires on organizational alignment systems in order to consistently hit growth targets and provide an awesome customer experience across some 25,000 stores in 62 countries.

With so many diverse individuals under one roof, true alignment is no small feat. But it's not impossible, either. The reasons why organizational alignment often fails can be attributed to several key factors.

Lack of strategic goals

Organizational alignment can fail if leadership fails to identify strategic goals and visions that all departments need to align behind. For example, a strategic goal like “increase customer satisfaction,” could be a strategic goal for a department. From there, goals can cascade downward, with specific goals for specific teams like “increase net promoter score.”
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But if leadership doesn’t identify strategic goals, opting instead for generic concepts like “be more efficient,” then different teams may come to different (and conflicting) conclusions as to what “being efficient” would mean.

Poor communication

Organizational alignment requires effective communication from the leadership, as well as between departments and teams. Leaddedrship needs to communicate their goals and their reasons behind organizational alignment. Teams and departments need to communicate their progress as well as their projects to both superiors and colleagues. If communication is inconsistent, there is a real risk that alignment will splinter and fail.

Unclear expectations

It’s one thing to proclaim “organizational alignment;” it’s another to have everyone on the same page as to what that entails. If management doesn’t articulate specifically what organizational alignment looks like and what they expect from each department, then different teams will execute the alignment differently, leading to an imperfect roll-out.

Inconsistent roll-out

If management half-heartedly commits to organizational alignment, implements alignment in fits and starts, or walks back certain elements only to reinstate them down the line, organizational alignment risks failing before it even gets off the ground. Leadership and HR need to commit fully to the execution of organizational alignment to prevent failure.

No explanation from leadership

Leadership needs to clearly articulate the rationale behind organizational alignment, otherwise teams may dismiss it as “busy work” or “micromanagement.” If teams only see organizational alignment as “being told what to do,” they will be more likely to do the bare minimum required, as opposed to whole heartedly embracing the new policies.

No buy-in from stakeholders

Stakeholders, such as c-suite leaders, managers, and HRBPs, need to buy in to the new policies. If they don’t commit to the process, then the alignment won’t be pushed further down the corporate ladder, meaning that teams and individual contributors won’t align with the goals of leadership.

Are cascading goals the same as organizational alignment?

Cascading goals, where strategic goals from leadership are used to inform goals for management and then for individual contributors, is a tool that can be used to achieve organizational alignment.

To learn more about cascading goals and how PerformYard can help your team implement them, check out our article here!

How can organizations achieve organizational alignment?

Achieving organizational alignment requires careful planning, calibration, execution, and communication.

Here are the steps that organizations can take to ensure that their organizational alignment is successful.

Start at the top

Organizational alignment needs to start from the top. Leadership must decide on strategic goals that the company will pursue. Once these goals are decided and agreed upon, then organizational alignment can be built to ensure the success of these goals.

Decide which form of organizational alignment to implement

Will you focus on horizontal alignment? Vertical alignment? Both? HR and Leadership need to decide which elements of organizational alignment are most needed, which are currently most lacking, and where to focus their efforts.

For example, if you wanted to focus more on horizontal alignment, you could use dotted-line reporting to improve collaboration across different departments.

Get buy-in from key stakeholders

Leadership and HR need to identify key stakeholders (such as managers or department heads) and communicate to them the importance of organizational alignment. Stakeholders need to see how alignment not only benefits the organization, but their teams as well. Once stakeholders understand how organizational alignment will create a positive impact for the workplace, they’ll be willing to enthusiastically support this new process.

Decide how you will measure process

Will you use cascading goals? Will you look at each individual’s progress, each team’s? It is critical to understand how you will measure the progress and success of organizational alignment. Goal-setting, goal management, and performance tracking are excellent ways to measure this alignment, and a dedicated performance management platform like PerformYard is a great tool to give you the data you need.

Communicate the new process to the company

Organizational alignment is a big change. It needs to be clearly communicated to the entire workforce, preferably by the leadership. After getting buy-in from key stakeholders, take time to announce the roll out through a company-wide meeting, setting expectations and explaining the rationale and vision. Take questions, listen to concerns, but focus on articulating why organizational alignment will benefit the company as a whole.

Identify successes and weaknesses

Solicit feedback through pulse surveys and quarterly reviews. Examine goal achievement rates. Look at how the feedback and performance differs from before organizational alignment was implemented. Have things improved? Are there any common complaints that many departments are flagging? Compile a list of things to improve as well as successes to continue to build upon.

Adapt and evolve

Organizational alignment is a dynamic process. After collating feedback and examining trends, you need to use this information to improve upon processes to gain further benefits from organizational alignment. It is a continuous process that will evolve along with your company and your company’s long term goals.

Putting the Pieces Together

Companies with strong alignment know their goals, actions and purpose. Here's what that means.

Goals: What are we driving the business towards?

Regardless of whether you're using annual revenue goals or departmental OKRs, an aligned organization puts the proven growth metrics first and foremost.

Depending on where you are and what you want for your business, your business plans can and should vary. For more on the core elements that make a goal effective, check out our breakdown here.

Actions: How will employees achieve those goals?

Some 95% of a company’s employees are completely unaware of or confused about the business strategy. And only 7% know what's expected of them in order to help achieve company goals.

Once you're clear on the tangible results you want to see, you owe it to your employees to give them everything they need to make those results happen.

Clarify the specific day-to-day tasks, actions and behaviors at the individual and team level that, when compounded over time, add up to high-level success.

Purpose: Why is it important to achieve these goals, with this particular approach

Cautionary tales like that of Enron and Wells Fargo show us that breakdowns in organizational alignment often occur when employees are incentivized by the wrong things.

State your mission regularly and your values clearly so that every employee knows exactly what are your business goals and the behaviors that help you meet them.

Keep Trying

We all dream of spearheading the kind of organizations that make business history. Organizations where every last individual is passionately pulling in the same direction. But the truth is, business is messy, chaotic and fraught with change — and there's no magic formula that can ever make it otherwise.

But luckily, there are many ways to make sure that the above three performance points are always being met at every level of the organization. Cascading goals is a classic approach used by many — but even companies who reject the classic hierarchy (like Asana and their AOR model), can create an approach that makes sense for their unique business culture.

What matters is that you're willing to learn and adjust as you grow.

Because as tempting as it is to blame employees for angry customers or unmet targets, the reality is it's every leader's responsibility to be the guiding force that lights a clear path forward for the business, and everyone in it. After all, how can we expect employees to support a strategy they don't know exists?