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Strategy’s Impact on Structure – The Good and The Bad

May 14, 2013

Strategy Concepts

This post continues the discussion we started here in Part I of Structure Follows Strategy.Structure Follows Strategy

Let me come back to the example of my business in Europe.

Again, I was facing the immediate, guttural, visceral reactions from HQ that we need to cut, we need to save, we need to protect the bottom line for long term stability and viability of the business. My reaction was “Okay, let me take that as a set if recommendations and let me go off and see what’s happening and analyze the business and outline what is the strategy, so that we can execute a plan for our resources appropriately.”  Maybe not in so many words or in such a calm demeanor, but you get the point.

It took us maybe four months, in this case, to really develop what would be a strategy. And one of the principal reasons is because of the volatility in Europe and the uncertainty around how the markets were going to develop, how the consumer market is developing, when we might see recoveries – so many, many factors making it an extremely complex, strategic plan. Toward the end of the four-month period, we had our strategic plan mapped out. We had a plan for the near term which is a two-year plan and we had a draft of a five-year plan depending on the outcomes in the two-year time frame.  With these plans in hand,  we subsequently executed on an organizational plan and a structural plan for resources that we needed to be successful in execution.

And I will admit that we had to make some organizational reductions.  But they weren’t as severe as what was originally expected.  We redeployed some of our team to a new customer channel. We created some new roles within the organization, some of which we had to fill from outside our team, which created new positions for external people, and some of our team were moved into new roles. The net result was less severe reductions than the original assumption would have been. And the reason is because we saw more opportunities, we saw a shifting market, we saw some customer segments that had not been attended to that we thought over the two to five year period would help us stabilize the business.

OK, Yes, we did have to institute some reductions in the organization, but it also included some movement of the current team and the creation of some new roles. All-in-all, we ended up with a stronger team to execute our strategy.  I hope it’s a good example of structure following the strategy and that a short term rash decision, an organizational decision may put you at a handicap decision.

Now I want to add something here.  We didn’t consider everything. Our forecast wasn’t perfect.  In fact, we are now under resourced after another six months. We don’t have enough resources to take advantage of some opportunities that we’ve identified since we started executing our strategic plan.  We ended up “in the middle” – less reductions than previously thought allowing us to take advantage of some identified opportunities but, finally, identifying more opportunities than we thought and now having too few resources.  It’s a lesson, too, in strategy – we aren’t perfect.  We make our best plans and move on.  Now we’re struggling to understand how we can do that, how we can take advantage of these new opportunities that we’ve uncovered that fit very well with our strategy.  We’ll find a way.

Will you?

Leave some comments below. We’d love to hear about your thoughts on strategy and structure and how you’ve implemented looking at strategy and then planning your structure and what changes or insights that you’ve had in your own experiences.

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