Aligning Organization with Strategy and Culture
In their book: " Executing your Strategy: How to break it down & get it done" Morgan, Levitt & Malek describe 4 traditional ways companies organize themselves depending on chosen Strategic Focus
_______________________________________________________________Technology Focus & Disruptive Innovation Strategy
- New technologies continue to emerge.
- Customers are responsive to new products or services that offer unique new solutions.
- Unique creative skills of key employees are seen as key to success.
- Examples could be eBay, Amazon.com and other web application based companies.
"Skunk Works" Organization & Cultivation Culture
The Cultivation Culture places a high value on recruiting, retaining, and nurturing highly creative employees to produce unique products.
To conceive, develop and prototype the next disruptive innovation....... (these) companies must create Skunk Works, sometimes also called Tiger teams - semi autonomous mini divisions or true corporate spin-offs that share the parents' high-level goals and can access all of their considerable resources but that have the freedom and flexibility of start-ups. This is done by creating formal or virtual groups that have a respected leader, a simple and highly informal structure, and the financial backing and marketing clout of the large parent organization.
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Customer Focus & Customer Intimacy Strategy
- Existing technologies are beginning to mature but new technologies do come up.
- Responsive delivery of customized products or services are required.
- Strong cross-discipline coordination between employees is seen as key to success.
- Examples could be custom home builders and some OEM-suppliers.
Strong Matrix Organization & Collaboration Culture
The Collaboration Culture places great value on understanding the unique needs of each customer.
The Strong Matrix Organization promotes the responsiveness and agility that are required for customer intimacy strategies and in fast changing markets. In a strong matrix structure, workers receive primary day-to-day direction from their product line or project managers, with only occasional direction and supervision from functional specialists.
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Product Focus & Product Leadership Strategy
- Improvements primarily come in existing technologies.
- Customer needs are fairly stable but customers are open to improved solutions.
- Deep technical expertise is seen as key to success.
- Examples could be some pharmaceutical firms and makers of standardized manufacturing or testing equipment based on complex technology.
Weak Matrix Organization & Competence Culture
A Competence Culture values technical excellence above all else.
Workers in Weak Matrix Structures are generally assigned to multiple product lines or projects. They receive their primary direction from their functional manger, who helps them mediate among competing demands for their time.
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Function Focus & Operational Excellence Strategy
- Only a few improvements and mostly in existing technologies.
- Customer needs are stable and there is little demand for new types of solutions.
- Operational excellence and control are seen as key to success.
- Examples could be package delivery companies and insurance firms.
Traditional Hierarchy Organization & Control Culture
A Control Culture values order and security above all else.
The Traditional Hierarchy Organization may avoid the matrix altogether: the additional managerial overhead of coordinating multiple dimensions exceeds the benefits of either a weak or a strong matrix structure.
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What is your Strategic Focus, how is your culture and how have you organized your company?
Maybe you should organize differently and "Change the name of the game" - I will describe one such example in a coming post.
PETER SØRENSEN
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