How to Create Strategic Alignment for Every Team

“Strategic alignment” is one of the most overused and under-defined terms in strategy. Leaders talk about it constantly, but few can say that every team has a clear line of contribution to the organisation’s success that they can trace, test, and measure.

The strategic alignment gap is most visible at execution, usually well after the planning. Most strategic plans look coherent on paper. But the disconnect appears when teams start setting their own goals — and those goals don’t actually connect meaningfully to the organisation’s success.

Consider a strategy review where a CEO asks each executive to explain how their department’s goals connect to the organisation’s strategic priorities. Most can point to goals that sounds related. Very few can tell an actual cause-effect story of how their department and team goals are contributing. Some teams have goals that pull in opposite directions. One team has been optimising a process that the strategy has already de-prioritised. Everyone has been busy. Nobody is sure how much of that busyness has moved anything that matters.

This is a strategic alignment problem. And fixing it requires some fresh thinking about what strategic alignment is, and what’s been missing in our attempts to create it.

What strategic alignment actually means

Oxford University’s Jonathan Trevor defines strategic alignment as:

…the careful arrangement of a company’s core value drivers, including its market strategy, capabilities, people, technologies, culture, structure, processes, and systems…

Such business literature identifies a number of elements that need to be aligned: strategic direction, goals used organisation-wide, organisational structure, culture and values, processes and systems, people and capability, resource allocation, and incentives. That’s broader than most leaders realise. But a well-aligned organisation has all of these pointing in the same direction.

PuMP directly addresses the goals and measurement layer of alignment — making strategic direction explicit, cause-effect connected, and measurable, at every level, for every process, and for every team. It doesn’t redesign organisational structure, shift culture, or rewire incentive systems. Those are adjacent disciplines — equally important, but separate.

Even when structure, culture, and people are broadly right, vague or disconnected goals will still stall execution. Clear, cause-effect linked goals are the connective tissue between strategic intent and daily work — and that’s where most organisations have the largest, most fixable gap.

Why most alignment efforts stop short

Strategic alignment gaps are worth fixing. McKinsey’s research on organisational health consistently finds that companies with strong internal alignment significantly outperform those without it — in the private sector, that shows up in shareholder returns. In the public and non-profit sectors, where the bottom line is outcomes for society rather than profit, the same logic holds: strong alignment between teams, goals, and strategy means better outcomes delivered for the same investment of public or donor funding. And in every sector, weak alignment doesn’t just waste resources — it wastes them invisibly, which is what makes it so hard to fix.

Most alignment work assumes there’s only one alignment problem: get teams to reflect the corporate strategy in their goals. This often lands teams in the trap of “mini-me” goals — departmental echoes of the strategic plan. At face value they look aligned but the causal contribution chain up to the strategic goals isn’t there. Consequently, teams design effort that isn’t needed.

Michael Porter’s point, in his 1996 HBR article “What Is Strategy?”, is relevant here: the key to strategy is omission; it’s about what we choose not to do. A well-focused strategy will not be directly relevant to every team. Pretending it is — by stretching or manufacturing connections — produces false alignment, which is arguably worse than no alignment at all, because it forces activity that isn’t needed.

And unless leaders use a systems thinking lens to help teams align to their strategic direction, teams choose local goals with tunnel vision. When teams set goals independently, without a systems view, they often optimise locally in ways that create friction — even completely unintended sabotage — elsewhere. A sales team chasing volume can overwhelm a delivery team. A finance team controlling costs can starve a product team of the capacity it needs to innovate. These aren’t performance failures — they’re alignment failures, and they’re invisible without a shared contribution map.

The result: teams that are busy but not contributing. Teams pursuing strategically disconnected goals consume resources without moving the needle. And because there’s no visibly clear contribution map, no one can tell. We solve this problem by realising there are actually three directions of alignment, not one.

The three directions of alignment

Whether a team directly contributes to the strategic direction, enables other teams that do, or serves the organisation’s fundamental purpose regardless of the current strategy — that’s what determines the right alignment direction. Once the direction is clear and goals are genuinely result-oriented, the right KPIs become much easier to find.

Direction 1: Alignment to the organisation’s strategic goals

The first direction is relevant to teams whose work directly contributes to one or more goals in the organisation’s current strategic direction — through a genuine, verifiable cause-effect relationship.

The anchor to create the alignment for such teams is the cause-effect chain, from each team result to the strategic results they directly contribute to. Thematic resemblance to a strategic goal is not the same as a causal contribution to it.

The test of good alignment here is whether you can start from a team’s goal and trace a chain of cause-and-effect upward, through business unit or department goals, to a strategic goal. If that chain breaks anywhere, or links are missing, the alignment isn’t real yet. A Results Map is a great way to visualise this vertical alignment.

But not every team needs to have a direct line to the strategy — and pretending they do is its own problem.

Direction 2: Alignment to other teams’ contributions

The second direction is relevant to support functions, enabling teams, and internal service providers — teams whose primary output is not a direct contribution to strategic outcomes but an enabling contribution to the teams who do directly contribute.

The anchor to create alignment for support teams is the impact their results have on the results of the teams they serve. True alignment for teams like HR or IT isn’t created by forcing them to find contributions to strategic goals that aren’t genuine or logical. It only creates frustration and wasted effort. The question they answer is not “what do we contribute to the strategy?” but “what do the teams we support contribute to the strategy, and what do we need to deliver for them to achieve it?”

This is still a cause-effect relationship — just one layer removed. The test of good alignment here is tracing contribution and collaboration horizontally rather than vertically (as in Direction 1). A Results Map captures this horizontal alignment too — it just shows it travelling through another team first.

And some teams don’t fit neatly into either category — not directly strategic, not primarily enabling — and they need a different kind of anchor altogether.

Direction 3: Alignment to the organisation’s purpose

The third direction applies to teams whose work does not directly contribute to the current strategy in any determinable way, and not primarily in service of other team goals that do. But their work is nonetheless essential to the organisation’s continued operation and reason for existing.

Strategy does not equal the business model. Strategy is the set of results an organisation has chosen to change or improve in the current period. The business model is how the organisation fundamentally works and what it exists to do — and it holds a much larger set of results that relate to all it does. These are different, and both matter. Many teams serve the business model without serving the current strategy — and that’s just as important.

The anchor to create alignment for these teams is not the strategic direction, but the organisation’s foundational purpose: its mission and promises to external stakeholders. Telling these teams to “find themselves in the strategy” either produces fabricated connections or makes them feel peripheral if they fail to find any.

The test of good alignment here is tracing contribution to the organisation’s mission and purpose and its promise to stakeholders. Their goals and KPIs might not feature on strategic dashboards, but they are front-and-centre on operational performance dashboards.

Three alignment directions give every team a way to contribute real value.

Part of the invisible cost of poor alignment design is that teams who can’t see themselves in the strategy either feel left out, or they waste effort and resources pursuing goals based on fabricated connections. The three-direction model gives every team a legitimate, honest alignment anchor — and eliminates the pressure to manufacture connections that don’t exist. Every team will have goals that focus them on the best ways they contribute value to the organisation’s success. And these goals will lead to KPIs that help them create that value.

Where KPI alignment fits

KPIs can’t fix the problem they didn’t create. If a team’s goals are pointed in the wrong direction — or pointed at nothing meaningful at all — choosing better KPIs won’t help. In fact, it won’t be possible to find ‘better’ KPIs. It’s the goal that determines what should be measured; the KPI just gives evidence of whether it’s being achieved.

Alignment of goals comes before alignment of KPIs. The sequence matters:

1. Determine which of the three alignment directions applies.
2. Define the result-oriented goals that genuinely belong in that direction.
3. Then design KPIs that measure those result-oriented goals.

Starting from the KPI end — asking “what should we measure?” before “what result are we responsible for?” — is one of the most common and costly (and avoidable) detours in performance measurement. A KPI is only as aligned as the goal it’s measuring. An organisation can have technically sound KPIs — well-defined, measurable, consistently reported — that are completely misaligned, because the goals they were designed to measure were never properly connected to the strategic or value-creation chain.

KPI quality and KPI alignment are different things, and both matter. But KPI alignment is important to get right first. It’s only a waste of effort to improve the quality of KPIs that don’t serve the organisation’s direction or purpose. The three directions give KPIs their context. Each direction produces a different kind of measure:

• Direction 1 produces strategic outcome and contributing result measures.
• Direction 2 produces internal service quality and enabling result measures.
• Direction 3 produces mission-level and priority operational result measures.

Knowing which direction a team should take in setting their goals will lead them to the measures that will best guide their contribution to the organisation’s overall success. And KPI alignment will be a natural consequence.

The realistic scope of what PuMP does here

PuMP gives you the goal-clarity and measurement layer of strategic alignment. It makes strategic direction explicit through the Results Map, ensures goals are cause-effect connected rather than thematically grouped, and guides the design of measures that give genuine evidence of the results that matter — across all three alignment directions.

But complete strategic alignment also requires:

• An organisational structure that enables the strategy: are the right teams organised in the right way?
• A culture that reinforces it: do people’s values and behaviours support it?
• Incentives that don’t undermine it: do reward systems drive collaboration or competition?
• Leadership commitment that cascades it credibly: do all leaders communicate the same story of strategy?

These are real disciplines with real methodologies — strategy consulting, organisational design, change management, HR. PuMP works alongside them, not instead of them. And PuMP is needed, because a coherent goals-and-measurement layer is the prerequisite for the others to work. PuMP’s goal-clarity layer also works alongside leadership commitment to build senior-level alignment around their strategy. Even the best culture change program can’t align people to a strategy they can’t see clearly. Even the right structure will produce misaligned outputs if the goals within it are vague or disconnected. Clarity of direction — which is what PuMP delivers — is the foundation the other elements depend on.

A test for your current strategic alignment

A leader should be able to answer three questions to test if each team really does have strategic alignment:

If the answer to any of these is “not clearly,” that’s the starting point. Not a performance conversation. Nor a restructure. Not even a reminder of the strategic direction. It starts with a conversation about which direction this team should be aligned to, and what results are genuinely their highest priority to improve.

Some teams’ goals have evolved over years from a mix of projects, core activities, legacy measures, and strategic echoes — without ever being anchored to a clear direction. For these teams, the first step will need clean slates and open minds: which direction applies, and what does that actually mean for their goals?

The point is that real alignment is testable. If you can’t trace the line — from a team’s KPI, through their goal, through the cause-effect chain, to one of the three anchors — alignment isn’t there. And if it isn’t there yet, now you know exactly where to start.