Corporate Restructuring That Drives Strategy
Corporate Restructuring That Works
Starting a business, whether a lemonade stand or a consulting firm with a new approach to corporate restructuring, begins with a realization that something is missing in the market. Often, an entrepreneur feels so strongly about the missing piece that they are willing to drive a stake in the ground. A stake with a bright colored flag that announces, “We’re here, and we’ve got it!” and, “You don’t have to live without it anymore.”
For me, the fabric of that flag was woven after I was battered by the fifth corporate restructuring initiative at the Fortune 10 company I worked for in eight months, and probably my thirtieth in five years. Sadly, I had a leadership role in many of them. I was one of the few who worked behind closed doors trying to translate a leader’s ideas as to how a business should be organized into boxes on a page so it could be “sold” to the team and implemented. Most of the time, however, there was no one behind those doors who fully understood the detail about all of the work going on in the organization. Not surprisingly, none of those corporate restructuring initiatives worked, and after wreaking havoc on the organization and people’s lives, we would inevitably reconvene to move the boxes around again a few months later. There simply had to be a better way.
Corporate Restructuring: RapidOD
The RapidOD approach to corporate restructuring was built on the premise that organization design does not have to be done in secret. In fact, it is best done with transparency, leveraging the best ideas of the people doing the work. It does, however, have to be fast (to minimize disruption) and collaborative (to make sure it works). The basic premise was that if we could get the right people in the room and align around a shared agenda for the future and a critical few design criteria, we could eliminate personal agendas and actually build structures that worked all in just one or two days.
And it worked.
The process has been refined over the past 10 years but was first tested while restructuring a sales function at a global soft drink bottler. The leaders had very disparate views on how the organization should be structured. Building empires was a big deal. At the time, they had just reduced the “who to call for what” list provided to grocery store managers from 47 people down to 11 and were extremely proud of that accomplishment. The RapidOD approach challenged that. RapidOD involves creating alignment around what success looks like to the customer (both from you and for them), and a short conversation revealed that customers really wanted only one point of contact. When that became a criteria for design, most of the empires that prided themselves on customer contact fell. There was simply no way every department could talk to customers.
Replacing Empires with Shared Agendas
When those involved understood the dilemma that the values they had held were not going to meet the customer requirement, the way was made clear. The new structure required breaking down silos and intense collaboration to make the customer’s businesses successful. The company nailed it in only one afternoon, and the best part was that there was no need to get ‘buy-in’ because everyone required to buy in was in the room.
That’s one small example, but the development of RapidOD removed the personal agendas from organization design and replaced them with a shared agenda. This revolutionized the organization design space with something faster, more collaborative, focused on the customer with less disruption…all based in solid organization design science with simple tools that could be implemented anywhere.
But something was still missing.
The RapidOD organization design sessions were (and continue to be) high energy with dialog that drove learning, but there was one critical question we couldn’t answer, even with the right people in the room: How could we be sure that the structure would drive strategy? The truth is, we didn’t know.
It did not make sense to say, “we align around strategy”. You can build tactics to support strategy, but if they are not the right tactics, or if some are missing, aligning around delivering tactics is not guaranteed to drive strategy. We needed something to align an organization around that would drive strategy. It had to be so rock solid that structure, talent, investments, priorities and resources could all be aligned to it. It had to be something that we knew, beyond the shadow of a doubt, would drive business strategy. We found the answer in organizational capabilities.
Capabilities Drive Strategy
If an organization can clearly articulate what it needs to be able to deliver to drive it’s strategy, it can align around delivering those organizational capabilities. Identifying organizational capabilities can be done in a relatively short session with an organization or function’s leadership. Capabilities can also quickly be assessed to determine their contribution to the strategy, their efficiency and effectiveness (ex: the ability to pay people does not contribute as much as the ability to manufacture a quality product). This can be combined to establish the most critical focus areas and any gaps that must be bridged to execute effectively. THAT is what we can align around.
Aligning The Organization To Drive Strategy
Aligning an organization to deliver the capabilities required to drive strategy is not entirely about structure. Structure is a good first step, but the organization also must prioritize investments, projects and resources to develop and deliver on the capabilities most critical to driving strategy. We call that an investment road map, and it answers the question, ‘How confident are you that your next investment is the most critical to drive strategy?’, but that’s a story for another day.
LeaderShift’s Strategy Execution process begins with building a capability model the organization can align around. RapidOD and the Investment Road Map ensure the organization is equipped to deliver them.