Businesses take strategic position by assessing its internal strengths, weaknesses as well as its competitors and environment. Mostly the companies review their strategy in different forums as well as at different levels during regular intervals. Companies normally adjust the strategy over time so that they can achieve their evolving performance goals. However even the smartest of businesses try to implement a new strategy without addressing the organization’s structure and set themselves up for a strategic failure. Also companies try to work out strategy and structure in isolation, they work on strategy first and then the structure. This is one of the major reason why strategy fails; strategy and structure should evolve together.
Let me explain why? Strategy is the “entrepreneurial spirit” of the organization which needs to be “performed” in order to be fruitful. This performance spirit can only be nurtured through the adequate structure of the organization. When both the “Entrepreneurial spirit” and the “performance spirit” work hand in hand we can have optimum results. For best results both – the strategy and the structure needs to evolve together.
Every company should align its business strategy with a deliberate organizational structure to secure a competitive market position. Creating an appropriate structure will result in a more productive workplace environment that improves staff communications, innovation, and better accountability. Large global companies often pursue rigid hierarchical structures with clearly defined job roles to manage their output. Whereas many businesses take flatter organic structures in which everyone shares different duties. The starting point to define the structure will be from when the mission of the company is decided. Then subsequently the structure will keep on evolving over a period of time in tune with the evolution of detailed strategy. There are many types of structures to choose from and the choice will depend upon what strategy will be implemented.
- Functional structures – defined by job functions, such as separate teams for operations, accounting, marketing and HR.
- Divisional structures – organized by offices or regional locations, allowing each divisional unit to focus on its overall local performance.
- Matrix structures – combine models so that most people report to two or more stakeholders, such as a sales manager who reports to a Regional Sales Manager and also to the Zonal Sales Head or Sales Director.
- Network structures are designed to focus on the core functions that differentiate a business, with all non-core functions being outsourced to subcontractors.
The method for creating an effective alignment of strategy and structure should follow four distinct phases, including assessment; design; alternative choices; and architectural design and implementation, based on recommendations on scientific lines by HMV Consulting.
Another consideration for effective strategy implementation through a more performing structure is to setup mix hierarchical review forums. In this forums officials of different ‘hierarchical levels’ sit together and review the development on strategy implementation. In order to get success through review forums the agenda, the timeline and the follow-up process of the forums should be well defined. HMV Consulting provides a complete design of the forums as per the organizational needs.