An introduction to

Alignment Management

Learn how the best companies achieve more by managing alignment directly.

"All other things being equal, highly aligned enterprises stand the best chance of succeeding in the intensely competitive, complex and changeable 21st-century marketplace.  The best aligned enterprises are the best performing because their leaders approach alignment as a strategic concern."
University of Oxford

Misalignment is expensive and deadly

Aligning your company is one of the highest ROI activities that you can do as a leader. Chances are, however, that alignment is not a top priority for your company (yet). Many leaders don't take alignment seriously at first because:

  • They are unaware of the risks of misalignment.
  • Complexity makes strategic alignment much more difficult to manage.
  • Output is mistaken for successful outcomes; people are busy, so things must be going well.

Unfortunately, unaddressed misalignment is expensive and risky for all types of businesses. Here are a few of the impacts that misalignment has on businesses:

In short, misalignment is expensive. Misalignment causes companies to waste money on projects and unfocused activities. It causes them to struggle to differentiate themselves to customers. It also causes them to lose their best people and sometimes even behave in unethical ways. This all would be tragic if there was nothing we could to about misalignment.

Common Symptoms of Misalignment

If you're experiencing these issues, you're likely facing misalignment within your company.

  • Managers spend a substantial amount of time (>15 hours/week) in meetings and answering emails
  • Decision making is slow and reactionary
  • Work is being done that doesn't support the company's mission or goals
  • Duplication of effort by teams that are working towards the same outcome, but separately

Start managing alignment directly

Managing alignment doesn't have to be expensive. Strong alignment can save your company money by increasing its focus. In tough times like these, survival depends on the ability to get more done with less.

Alignment management is a new field of management that addresses the issue of alignment. In the past, managers have focused on managing tasks and projects, and not the links between them. This creates a problem: the wrong outputs do not lead to the right outcomes.

In fact, the Project Management Institute (“PMI”) has recognized this problem. They now include strategic alignment as a pillar of their new definition for success. This new definition supplements the traditional “time, cost, and scope" factors for success. Yet, despite the PMI's new focus on strategic alignment, they are not prescriptive about its implementation.

Alignment management works by treating your business as a value chain. Within that value chain, each piece gets aligned to the company's purpose and the rest of the value chain. Misaligned elements are then either course corrected or eliminated. This process is ongoing and cyclical, ensuring your business remains positioned for success.

Alignment management provides a standard language and systematic approach for evaluating, measuring, and managing alignment. We do not prescribe specific best practices. Instead, we focus on an evidence-based approach to making decisions about alignment. These factors often include:

  • how your organization is structured (e.g. top-down, clustered, hub-and-spoke, etc.);
  • how your business runs processes;
  • how communication flows throughout your company;
  • how your company designs and manages incentives;
  • how collaboration occurs

The Essentials of Alignment Management

Alignment management treats every organization as a value chain, with four categories of components that can be aligned.

The alignable components of an organization are: people, structure, culture, and processes. People encompasses roles, customer needs, choice of markets to server, and incentive structures. Structure includes degree of hierarchy, formalization (e.g. reliance on rules to inform work v. informal guides like values and norms), verticalization, changeability, and communication structure. Culture is composed of behaviors and attitudes, mission, vision, and values, and environment design. Processes include structured processes, tasks and project management processes, activities, measures, metrics, and goals. It also includes workflows and tools and technologies used.

These components are: people, structure, culture, and processes. Alignment managers play a crucial role in deciding the right mix for these components.

Origins of Alignment Management

Alignment management builds on years of research and practice in vast fields, including:

  • Systems thinking
  • Organizational design
  • Behavioral psychology / behavioral economics
  • Industrial / Organizational (IO) psychology
  • Game design/gamification
  • Computer science and computer networks
  • Management theory
  • Leadership practices

This research does not provide a set of best practices that companies can follow since every company is unique. Likewise, research into these disparate fields does not always result in consensus. There are many right solutions. We aim to distill the most important elements of alignment in an accessible format.

In addition to the alignable components of an organization, there are three factors of success for alignment management.

Right strategy

There is no one-size-fits-all approach to alignment or strategy. Instead, each business needs to select the right business and alignment strategy to fit their circumstances. Factors for determining fit include how well it fits the needs of customers and whether it fulfills the purpose of the company.

Right structure and architecture

Structure determines how strategy executed. The context people work in is a determining factor in deciding how they perform and how they'll make decisions. Structure includes communication lines, organizational architecture, formal processes, and technology used (IT).

Right incentives

People are the driving force of progress within an organization. Every person comes to work with a different set of motivations. Some are extrinsic, such as pay, recognition, and career advancement. Others are intrinsic, such as fulfillment, enjoyment, and a sense of accomplishment.

Incentives influence behavior. If incentives don't align with the purpose of the organization (or its values), then behavior will also be misaligned. At best, wrong incentives can lead to poor performance and wasted opportunities. At worst, they can lead to lawsuits and PR disasters.

The Alignment Management Methodology™

The rest of this guide is dedicated to the Alignment Management Methodology ("AMM"). AMM is an opinionated approach to the problem of alignment. It provides a framework for many innovation-centric businesses to manage alignment.

Who this for

The Alignment Management Methodology is not for every type of company. We recommend this methodology only for companies that meet the following criteria:

  • Innovation focused
  • Technology-enabled
  • Customer-centric
  • Changing environment / VUCA

Organizations that are stable and unchanging have alternative tools for alignment. We recommend reading Align by Jonathan Trevor for ideas on how to align stable and change-averse businesses.

Getting Started

Your organization’s purpose is enduring and perpetual; it rarely changes. By contrast, the rest of the value chain is constantly evolving. There are several reasons that a value chain may need to be adjusted, including:

  • Changes in customer needs
  • New market opportunities
  • Tools and technologies that enable better performance

We recommend every company have an alignment manager (or an Office of Alignment) that works directly with the executive team. This person supports the organization by ensuring each component of the company aligns. They ensure value eroding aspects of the organization are reduced or eliminated. They are responsible for increasing performance across the company through alignment.

Alignment Management Methodology. The recommended components are: purpose (e.g. mission, vision, and values); strategy, goals, and activities.

Manage communication silos

Aligning an organization requires effective communication. The best strategy will create no value if it is not communicated on time. At the same time, the best of strategies align with reality. It's critical for functional managers and individual contributors to share their discoveries. Therefore, communication systems — and the silos that form around them — need to be in sync with your company’s alignment strategy.

Poorly managed silos hamper an organization’s ability to perform and react to change. This is caused by the low mean response time for new information to be acted on. As a result, alignment managers should ensure teams remain between 3 and 7 people in size, following the 3-max-7 rule.

Smaller teams are always more efficient, at the cost of lower total productivity. Teams greater than 7 people are exponentially less efficient. A 14 person team is 4.3x less efficient, despite only having 2x more people.

Create the right structure for aligned work to happen

While individual teams can remain under 7 people in size, projects often cannot. Projects regularly span tens and hundreds of people. This conflict of priorities create a paradox. How do we complete large projects without spending too much time communicating or creating silos?

This is where the Alignment Management Methodology helps.

Start by creating the right context and architecture for aligned work to occur in. Alignment managers should work with individual teams to connect their execution to strategy. There are several tools they can use to create context, including:

  • Goal setting with frameworks like SMART, OGSM and OKRs. We recommend every company use a goal setting and accountability framework.
  • Communicating the company’s strategy through visual tools like the Business Model Canvas or SWOT analysis. Ensure the team understands how the business is addressing the market opportunity and why it matters. Include every team member in this exercise, regardless of their role (e.g. engineer, marketer, or manager).
  • Modeling the organization through tools like the Balanced Scorecard. These tools can help discover areas of misalignment. Pay special attention to activities, initiatives, or people that are not connected to the rest of the company.

To make this context actionable, capture this information in an accessible place. Don’t let this information live only in a few individual’s heads or in unstructured meeting minutes. Tools like Minsilo can help to improve the visibility of this context and connect it back to execution.

Address the human side of work

Alignment Managers also are critical to bridging people in an organization. They can help foster psychological safety and connect disconnected teams. Google found psychological safety as the number one contributor to their teams’ performance. This supports research in the field of behavioral psychology on rapport and trust-building in enabling effective collaboration.

People work better with people they know well. But, given the time investment required for rapport, Alignment Managers need to be strategic in how they connect people. There are a few ways to do this:

  • Create an atmosphere of trust. Focus on listening to and trusting the people that work within your teams. They are often a source of novel information that can improve the company’s competitiveness. Leaders should be searching for the hidden innovators across the company and work to disencumber them.
  • Connect people around their capabilities. Focus on pairing complementary people together (based on seniority, expertise, or functional area). For example, connect a marketer with an engineer. This is an easy way to increase empathy between roles, and in turn, increase cross-functional alignment in the organization.
  • Make the impersonal, personal. Work does not need to be impersonal. People who connect on a personal level are more effective than those who focus only on business. Alignment managers should connect people across the organization in less formal settings.

With the right approach, behavioral psychology can become a lever for organizational performance. Companies that master managing the way “people really work” dramatically outperform their competitors. They attract better talent, enable a growth mindset in their people, and improve employee engagement.

Importantly, the best practices for creating and managing alignment are not universal, but some common practices should help get your people working effectively.

Hold people accountable to performance

"Discipline equals freedom" - Jocko Willink

Accountability is essential to performance. A lack of accountability is the result of poor leadership and organizational architecture. Fortunately, there are ways to systematically improve accountability, such as:

  1. Implementing an accountability framework, like RACI. These frameworks specify who is responsible for what part of a task, goal or project. This increases visibility around execution, by linking outcomes to specific people.
  2. Communicate progress in open channels. Tools like Minsilo Contributions™ are an easy way to increase transparency on what is being worked on by whom.
  3. Engage people in setting goals. Get people at every level of the company engaged in defining their own goals. Individual ownership over goals improves engagement and performance. Functional managers should work to ensure goals align back to the needs of the company.

Clear goals and accountability shift contributors from thinking about what they need to do to why it matters. They create a culture of leadership and ownership. Alignment managers play a consultative role with teams. They help them set goals and performance measures that align with the organization.

Conclusion

In this guide, we took an opinionated approach to the challenge of alignment. We attempt to only provide universally valuable practices, but leave much of the implementation decisions up to you.

We encourage you to carefully consider your organization’s own needs. Any alignment effort will fail if it’s not congruent with the needs of your business. You cannot execute another company’s alignment strategy, because it is not relevant to the context of your business. Alignment strategy must be tailored to your business’ needs, even if the tools and frameworks used are similar to other companies.

Start using the Alignment Management Methodology™ today

Minsilo is designed from the ground up to provide a simple way for leaders to manage alignment. Connect day-to-day execution to company strategy, while shifting focus from output to outcomes.

Helpful Resources

These resources were instrumental in creating the methodology. We recommend checking them out.