Strategic Leaders Understand Their Organizations
The starting point for a new strategy is a clear understanding of the current state of an organization. It also forms a framework for an ongoing assessment of change. This understanding of the current organization combined with a clear strategic goal and vision of what success would look like, allows an analysis of the gaps that need to be filled to deliver the new strategy. To perform this assessment, I have used a framework consisting of three elements: organizational design, organizational characteristics and organizational conditions.
Organizational design describes what the organization currently looks like – what is the structure, who are the people and resources available, what are the organization’s competencies, etc. The analysis of the organization design should be a full inventory of what makes up the organization and involves answering the following questions:
How are the members organized into departments,divisions, etc.? How is the team (matrix) structure organized?
What are the key processes that drive the business?
What is the organization’s culture and environment?
What skills, competencies and technologies does the organization have to execute their strategy?
Who are the key talent and effective strategic leaders?
Once a leader has an in depth understanding of their current organization design (current state), the next analysis is to identify the organization design that is required to deliver their strategic intent and strategic goals (future state). In a similar way to the current state the future state analysis should answer the following questions:
What is the optimal way of organizing the members of the organization into departments,divisions, etc.? How should the team (matrix) structure be organized?
What processes need to be standardized and agreed? What decision making processes are required?
What culture or environment needs to be established to deliver the strategic goals?
What skills, competencies and technology does the organization need to execute the strategy?
What talent and leadership behaviors need to part of the organization?
There are a number of organizational characteristics that should be part of an analysis of current state including the following: type of organization (for profit, academic, government, not for profit, etc); maturity of company (start-up, growing or mature company); type of activities they are engaged in (research, development, manufacturing, marketing or sales) and industry or area of interest (e.g., pharmaceutical, automotive, oil and gas, etc.). Strategic leaders should assess and clearly understand each of these characteristics. This understanding of the current organizational characteristics can provide both opportunity and challenges for strategic leaders. Each of these characteristics should be assessed and clearly understood and each can provide both opportunity and challenges for strategic leaders. For example, start-up organizations are very much focused on their initial business plan, obtaining venture capital and actually putting together a viable organization. In my experience, these organizations tend to not have a great interest in leadership productivity as they are so focused on product and getting it to market. There is an opportunity for development of leaders here because bad leadership can have a major impact on the whole organization and the implementation of the business plan.
Another aspect to analyzing the current state of an organization is to consider organizational conditions including the organizational culture. This relates to the current environment in the organization and the levels of engagement of the people in it. Employee engagement is a key driver of productivity and often determines whether you can retain your key talent. Strategic Leaders should be aware of the “temperature” of their organization. The impact of strategic leaders can be significantly affected by the mood of their people.
A second aspect to organizational conditions that should be assessed is the organizations readiness to change. Change management is an important skill for strategic leaders. Delivering strategic goals will inevitably result in the need for an organization to change from its current state to a desired state. A leader needs to use system thinking in decision making as it relates to integrated organizational change. Decisions are required on what change is needed and the intent may be to evolve the current state or radically transform the business. There are elements of any system that can be changed to reach a desired new state and to impact productivity and many levers can be pulled. In my experience, there is a tendency to pull one or two of the levers independently without a full understanding of the impact on the whole system.
Successful strategic leaders have a good understanding of the current design, characteristics and conditions of their organization. They also have a clear vision of where their organizations need to be to deliver on their purpose and strategic goals. Finally, they are able to manage the changes needed to bridge the gaps between the current state to a new desired future state.
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