Congratulations! You’ve just introduced your new strategic plan. You might be a new executive looking to make a mark in the organization, or maybe you’re a veteran looking to jumpstart lagging results – either way, strategic planning is often the first step in executing significant organizational change.
But what if I told you that’s not your issue? Organizations rarely, if ever, fail during the strategic planning process. Where they fail is in the execution.
Admittedly, organizations are getting more sophisticated in their strategic planning and execution approaches. It used to be that the CEO had the strategy and merely delegated parts of the accountability to their senior team. Now, organizations are starting to align, track and monitor key performance indicators; tie certain deliverables and targets to executive compensation; and, work on more appropriate time-horizons. But the one thing that we still find missing? Organization design alignment.
Strategic execution starts with organization design. Positions have to be aligned based on strategy (both functionally and vertically); accountabilities, authorities and deliverables have to be appropriately cascaded based on the strategic objectives; and the right people have to be in the right places. If you’re a senior leader going through a major strategic project – here are three helpful tips as they relate to the interface between strategy and organization design.
Getting the positions right. Too often we see the introduction of a new strategic plan followed by relatively limited changes in positions and their alignment. Maybe this makes sense if your strategic plan is to build on your current capabilities and continue operations in a similar fashion. However, the reality is that strategic plans often involve pivots (either minor or major) in a certain direction. These pivots should be reflected in changes to positions and their alignment. For example, as banks compete with smaller, fintech start-ups, they’re looking to shift their focus from bricks and mortar banking to digital. As part of this, many have undergone substantive restructuring of the traditional businesses in order to shift more money and create new positions in the digital space. Organizational pivots like this consistently create a requirement to change positions and their vertical and functional alignment.
Appropriately cascading throughout the organization. Accountabilities, authorities and deliverables related to strategy achievement shouldn’t just be aligned to the senior levels of management. In every organization it is essential that these three factors are appropriately cascaded throughout the entire organization. If an organization has an overarching strategic objective of enhancing their big data capability – a director may have a broad accountability of implementing a new IT system, and the direct report managers may be accountable for a sub-factor of this project such as vendor selection or change management. By aligning these accountabilities, authorities and deliverables, all employees should be clear on how they contribute to achieving the strategy.
Getting the right people in the right positions. This is absolutely critical and so often forgotten. As positions change and accountabilities and authorities are updated, organizations will often make the assumption that the current incumbent can adequately handle the new role – which is not always the case. One example is the major disruption taking place in the newspaper industry with the movement from print to digital. This shift has resulted in editorial roles requiring new and different capabilities. With such rapid change it is essential that employers ensure they have the right people, in the right roles, with the appropriate training supports in place.
Organization design is often the missing link between strategic planning and execution – and, when used properly, it will significantly improve an organization’s ability to achieve its strategic goals and objectives.