Structure Doesn't Just Enable Strategy—It Is Strategy

January '12

Summary:

One of the biggest challenges facing modern corporations is ensuring that business strategy and organisational design are tightly aligned. Conventional wisdom suggests that it is critically important to decide the enterprise strategy first and then re-align the organisation to deliver on it. Reality is quite different.

Structure defines organisational boundaries for where and how value is managed and delivered. It not only dictates accountabilities and responsibilities, but, by definition, structure provides the units by which a company’s financial and human resources are allocated. Therefore, structure is one of the key levers that chief executives can use to successfully manage the value of their businesses and best gain or leverage their competitive advantage.

Value exemplars often use organisational design to gain strategic advantages and help deliver consistent, superior returns to shareholders. For these companies, structure does not follow strategy — structure is strategy. The following case studies demonstrate how structure and strategy are inextricably intertwined. The lesson to be learned in these examples is that there should be no such a thing as “an industry standard” organisational design because adhering to any standard structure may mean missing a hidden source of competitive advantage. A distinctive design can give your business a unique edge in the marketplace.

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