What is Organizational Alignment? A Guide For Organizations

If your organizational alignment is off, your business likely suffers from poor employee relationships, miscommunications, and a lack of accountability. As this can affect resource deployment, strategy execution, and employee coordination, achieving organizational alignment should be a top business priority. 

Given the importance of organizational alignment for your business, knowing how you can attain and maintain it — using, for example, an organizational alignment framework — is essential.

To help you understand and facilitate organizational alignment across your business, this article covers: 

• What is organizational alignment
• Why organizational alignment is important
• The need for both horizontal and vertical alignment
• Steps for achieving organizational alignment
• Best practices for organizational alignment

Organizational alignment is a business strategy that involves coordinating efforts, resources, and procedures toward a common goal. This entails achieving both horizontal and vertical alignment, where departments, teams, and individuals work together to achieve primary objectives.

Achieving organizational alignment is essential for companies looking to ensure that business components work together toward common goals, where overarching visions and values are consistently prioritized. This creates an environment where synergistic efforts pull in the same direction, bringing cohesion at every level of the organization.  

The benefits of achieving organizational alignment

Cultivating a united front using organizational alignment has five benefits for your organization, including: 

1. Improved accountability, engagement, and productivity helps employees have a better understanding of how they contribute to the bigger picture 
2. Better collaboration brought on by streamlined communication flows between departments, teams, and employees 
3. Quicker decision-making as communication expands beyond silos  
4. Consistent work makes employees more aware of how everyone in the business operates  
5. Greater visibility into resources as employees know what’s being deployed and how 

“Alignment is a force multiplier.”

- Gereon Hermkes

To reap the benefits of organizational alignment, you must first understand its two key components: vertical and horizontal alignment. Understanding their individual strengths and weaknesses can showcase why you need both for superior performance. 

The most researched form of organizational alignment is vertical alignment. Vertical alignment involves a clear, top-down flow of information, where high-level strategies, goals, and processes are passed down and converted to lower-level objectives. This type of alignment encourages you to break down, filter, and distribute goals to relevant stakeholders, ensuring organizational efforts converge to overarching priorities. 

When you manage vertical alignment successfully, you: 

• Enable optimal resource use 
• Diminish ambiguity using centralized decision-making 
• Improve ongoing awareness of company goals 

Why you shouldn’t rely on vertical alignment 

While vertical alignment can act as a guiding light for your organization, you shouldn’t rely on it entirely — especially if you operate in a large, siloed organization. Doing so can give rise to several issues, including: 

• Slow operations: Translating and passing goals down a bureaucratic organization may take months to execute 
• Inflexibility: As information distribution may be slow, limiting adaptive capabilities  
• Complex goal setting: Once the arduous process of setting cascading goals is complete, executives may be more willing to plod along with irrelevant goals than produce new ones when the time comes 
• Resentment: As employees are often dictated around in hierarchical organizations, they may be less committed to delivering on goals they didn’t develop themselves  
• Limited collaboration: With limited employee engagement comes ineffective collaboration, impacting well-being and performance  

Given these disadvantages, you must chip away at hierarchical layers and work on optimizing horizontal value chains. Adding horizontal alignment to the mix can help you mitigate issues brought on by vertical alignment, improving performance across your organization. 

Horizontal alignment can flatten communication structures for better cross-functional collaboration. With horizontal alignment, employees work together to co-create complementary processes and synergies with minimal input from managers. Part of this process can involve bottom-up planning, where teams and departments create goals and communicate these to executives.  

Horizontal alignment can improve workflows by: 

• Improving adaptability and flexibility  
• Enhancing creativity 
• Increasing employee satisfaction  
• Enabling employee autonomy 

Why you need both vertical and horizontal alignment 

As with vertical alignment, relying on horizontal alignment can bring several challenges. These include: 

• Power struggles: Without established authority at lower levels, a power struggle may arise, creating confusion around roles and responsibilities 
• Limited productivity: With everyone encouraged to propose ideas, valuable time and energy may end up wasted on ruling out ineffective proposals 
• A lack of motivation: Employees may be less inclined to be productive with minimal top-down supervision  

Given the benefits and drawbacks of using horizontal and vertical alignment separately, a holistic organizational alignment framework is necessary. This integrative approach gives you optimal results, as one alignment method's advantages overcome the other's disadvantages — and vice versa. 

If you’re looking to cement organizational alignment within your organization, there are five steps you need to focus on: 

1. Getting a top-level, strategic understanding of your goals 
2. Passing this information down to the rest of the organization 
3. Shifting to a matrix organization structure 
4. Ensuring progress visibility 
5. Regularly assessing performance and providing feedback 

1. Getting a top-level, strategic understanding of your goals  

Before aligning your employees, you need to know what you’re aligning them toward. First and foremost, your executive team must agree on the company’s main goals, strategies, and interdependencies. These should be based on your core values and competencies, enabling continuity across the business. 

To create actionable, ambitious, and data-driven goals, you can use objectives and key results (OKRs). OKRs are an ambitious and collaborative goal-setting methodology made up of objectives and key results. Objectives are short, qualitative descriptions of what you're trying to achieve, while key results are quantitative metrics tracking progress toward your objective. 

Read the benefits of using OKRs for business alignment

2. Passing information down your organization

Once you’ve established a North Star, you must communicate it across your organization. When conveying strategic priorities, consider mentioning your focus on achieving organizational alignment. This should be fortified by a solid ‘why,’ describing the importance of organizational alignment for your company. After defining your ‘why,’ you can go on to explain the ‘how.’ This involves outlining expectations around collaboration, roles, and goal ownership. 

OKRs can make this process straightforward. After setting your North Star OKR, can collaboratively create lower-level team and individual OKRs in support of your overarching OKR. This involves communicating with department heads to ensure their OKRs contribute to the company OKR. 

Keep in mind that organizational alignment doesn’t occur overnight. Allow for a transition period as employees gain decision-making confidence and grow comfortable taking ownership of goals. Do your best to support and empower employees during this time. 

3. Shifting to a matrix organization structure

After updating employees on the company’s next steps, shift your focus to creating an organizational structure that supports these changes. Communication lines across departments and teams should intersect vertically and horizontally, resembling a grid-like layout. This is known as a matrix organization structure. 

Using an organizational aligment model such as the matrix organization structure enables cross-functional employees to rely on each other without being confined to restrictive silos. 

This structure encourages collaboration across relevant projects and value streams, with employees responding to multiple managers to cultivate a dynamic, aligned, and coordinated organization.  

4. Ensuring operational transparency  

The complexities of organizational alignment require transparency for efficient operations. This entails stakeholder visibility across real-time progress and goals. This company-wide visibility is key to maintaining superior performance, collaboration, and employee relationships as: 

• Employees are held accountable for their goals, ensuring steady progress  
• Transparency nurtures a trust-fuelled environment, where honesty is encouraged and everyone can ask for help 
• Visibility around goal progress enhances the quality of feedback and knowledge-sharing 
• Employees are more engaged with their work, improving productivity 

5. Regularly assessing performance and providing relevant feedback

While trusting employees is crucial, keeping an eye on their progress can help you overcome challenges before these cause workflow disruptions. For best results, establish a regular cadence of check-in meetings. During these meetings, managers should discuss upcoming tasks, goal progress, and obstacles with employees, addressing these using relevant feedback. 

Achieving organizational alignment requires ongoing effort and attention. To help accomplish this, we recommend the follow three tips for fostering ongoing alignment within your organization.

1. Create an effective process for prioritization

Priorities can change — fast. Without a way to recognize what goal is most important at any given time, your business risks wasting its time, effort, and resources on outdated goals. As such, you need an effective process for prioritization. This involves clearly defining timely goals, identifying key criteria for evaluation, assigning value ratings (based on urgency, importance, and the overall organizational strategy), creating a ranking system, and regularly reviewing and adjusting priorities.

2. Foster ongoing transparency

To keep everyone in the loop, you need to create transparency within your organization. Transparency at every level can help build trust between cross-functional teams, foster collaboration, and eliminate misunderstandings. Some ways to create transparency include:

• Hosting regular check-ins and one-on-one meetings with employees to discuss progress, concerns, and challenges
• Requesting feedback to nurture openness and trust within and between teams
• Use communication platforms (e.g., Slack) to allow employees to ask questions and share information

3. Nurture continuous improvement

Establishing a culture based on continuous improvement can help you stay aligned externally, adaptign to market changes, business challenges, and incoming opportunities. This may involve emphasizing the value of continuous improvement to employees, encouraging collaboration, and employing a data-driven approach to decision-making. 

As your organization expands and business environments evolve, maintaining alignment — both vertically and horizontally — is no longer easy. Therefore, you must make active strides toward organizational alignment to stay adaptable.  

Creating organizational alignment requires you to first establish upcoming goals, using a collaborative goal-setting methodology like OKRs. After you’ve communicated these to your organization — and stated your commitment to achieving organizational alignment — you should work on cultivating a flatter organization by using an organizational alignment model such as the matrix structure. This ensures streamlined communication flows across both horizontal and vertical levels. As part of this organizational restructuring, transparency and ongoing performance assessments are vital, with additional feedback provided to ensure your company’s on track. 

Quantive is your bridge between strategy and execution. Founded on the objectives and key results (OKR) methodology, our Strategy Execution Platform is where businesses plan successful strategy, focus and align teams to it, and stay on the leading edge of progress.

As your company looks to achieve the best possible results, you need a modern approach to run your business and change your business. The Modern Operating Model brings strategy, teams, and data together to help make decisions faster, optimize operations, and drive better business outcomes.

Whether you’re a large enterprise facing competitive disruption or a small business leading the innovative charge, Quantive helps get you where you want to go.

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