Strategy or Structure?

Which came first, the organisation strategy or the organisations structure? In best practice, structure should follow strategy, but too often strategy is forced to “fit” the structure, and often its not a good fit. PWC have released a very interesting article (read it here) that addresses this very issue.

This article outlines some fundamental guidelines that help reshape organisations to fit their strategy. PWC claims that for a redesign to succeed, “a company must make its changes as effectively and painlessly as possible, in a way that aligns with its strategy, invigorates employees, builds distinctive capabilities, and makes it easier to attract customers.”

So what are the 10 principles? Each one follows, with just a very brief description, and I would really encourage you to read the full article and get the full benefits.

1. Declare amnesty for the past – explicitly decide that you will neither blame nor try to justify the design in place today or any organisation designs or the past, its time to move on.
2. Design with “DNA” - PWC identify eight universal building blocks that are relevant to any company, regardless of industry, geography, or business model. These building blocks will be the elements you put together for your design.
3. Fix the structure last, not first – you’re not setting up a new form for the organization all at once. You’re laying out a sequence of interventions that will lead the company from the past to the future. Structure should be the last thing you change.
4. Make the most of top talent – you must ensure that there is a connection between the capabilities you need and the leadership talent you have.
5. Focus on what you can control – taking stock of real-world limitations helps ensure that you can execute and sustain the new organization design.
6. Promote accountability – design your organization so that is easy for people to be accountable for their part of the work without being micromanaged.
7. Benchmark sparingly, if at all – if you feel you must benchmark, focus on a few select elements, rather than trying to be best in class in everything related to your industry.
8. Let the “lines and boxes” fit your company’s purposes – think through your purpose when designing the spans of control and layers in your org chart. These should be fairly consistent across the organization.
9. Accentuate the informal – norms, commitments, mind-sets, and networks are essential in getting things done. They represent (and influence) the ways people think, feel, communicate, and behave.
10. Build in your strengths – there are always strengths to build on in existing practices and in the culture.

PWC assert that these 10 fundamental principles can serve as guideposts for any reorganization, large or small, which can help you avoid common missteps and focus instead on the right blueprint for your business.