Strategic alignment

Strategic alignment is a process that ensures an organization's structure, use of resources (and culture) support its strategy. Successful outcomes also require an awareness of the wider environment, regulatory issues and technological change. Strategic alignment contributes to improved performance by optimizing the operation of processes/systems, and the activities of teams and departments. Goal-setting theory supports the relevance of clear, measurable operational objectives that can be linked to superordinate goals. This helps ensure resources are used effectively. The concept is also significant in the context of a global business environment where activities need to be coordinated across regions and time zones.[1] Strategic alignment encompasses not only technical and functional activities, but also issues relating to human resource management (and how best to develop people's motivation and capability). The process may extend across organizations that share complementary objectives, e.g. business partners.

Strategic Alignment involves Superordinate Principles that now include the 3BL "triple bottom line" perspective. This emphasizes criteria that take account of Planet, People & Profit (3P Thinking).[2] It raises issues relating to Corporate Governance. There are two main models of corporate governance, (i) the shareholder model, which prioritizes the return on investment for investors, and (ii) the stakeholder model that also emphasizes a responsibility towards other groups and wider considerations.[3] Environmental, Social and Corporate Governance (ESG) is at the heart of the new thinking. Creating operational alignment involves translating an organization's Superordinate Goals and overall strategy into the more immediate objectives of a team or department. In addition to reviewing systems and processes, leaders also need to develop the skills, competencies and motivation of people in the organization. The McKinsey 7s Framework provides an overview of this type of analysis, highlighting elements that contribute to alignment. This type of review, with follow-up interventions, contribute to key activities (linked to products and services) meeting customer and stakeholder expectations. At the same time, effective internal systems ensure the best use of resources, which contributes to future success.

In an article in Harvard Business Review (May 2016),[4] Jonathan Trevor and Barry Varcoe suggest two questions. These prompt reflection on strategic alignment.

  1. How well does your business strategy support the fulfilment of your company’s purpose?
  2. How well does your organization support the achievement of your business strategy?

See also

References
  1. "Are your global teams working together? How geo alignment helps companies succeed globally". Trade Ready. 2018-07-09. Retrieved 2021-01-26.
  2. Kraaijenbrink, Jeroen. "What The 3Ps Of The Triple Bottom Line Really Mean". Forbes. Retrieved 2021-01-26.
  3. Mac, Ryo (2018-02-11). "Corporate Governance, and the Stakeholder vs. Shareholder Model". Medium. Retrieved 2021-01-26.
  4. Trevor, Jonathan; Varcoe, Barry (2016-05-16). "A Simple Way to Test Your Company's Strategic Alignment". Harvard Business Review. ISSN 0017-8012. Retrieved 2020-03-26.
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