The successful organization – one that is both productive currently and viable long term – has integrated the vision, strategy, and structure of the organization to enable financial success. The ability of an organization to achieve every iota of success it is capable of delivering depends first upon the organization’s clarity of vision, second on its to select the appropriate strategy (or strategies) to accomplish the vision, and ultimately on the structure the organization puts in place to deliver the “goods” to the customer.
Clarity of vision is essential, as no business can serve every master or every customer. When there is a clear vision of who the business serves and what problem the organization is solving, the business can direct its scarce resources to its priority activities. The vision of the organization is the consistent thread that weaves throughout the decision-making process beginning with the selection of an appropriate strategy for the organization.
Selecting an “appropriate” strategy is key. The organization which selects a strategy it cannot execute or deliver because of resource limitations or other factors is an organization which cannot achieve the maximum degree of success. An organization with the ability to distinguish between possible strategies and strategies it is capable of delivering – even if it is a stretch – is an organization with a well-developed self-awareness.
The degree of an organization’s self-awareness is a combination of its stage of business development, existing business resources, abilities and skills of the organization, and the structural capability which can be put in place within the relevant three to five year time horizon of strategy implementation. An organization is able to build the business infrastructure required to deliver its selected strategies when it is able to identify operational gaps and recognize, then access existing capability.
The structure of the organization today is unlikely to be the structure of the business a year from now. It is certainly not the structure for the organization in three to five years. Structure is a function of current operations AND the vision of where the company intends to be over a period of time. Remember, structure arises out of an organization’s need to deliver the “product” and the supporting activities required to produce, market, sell, deliver, and collect payment.
An organization must be careful not to mis-time the elements of structure – adding them too soon drains the organization’s resources and adding them too late prevents the organization from capitalizing on opportunities. Further, the addition of structural elements requires recognition of their impact on current capacity, systems, and processes. The integration of new elements with existing ones often results in a period of diminished capacity while the entire organization is brought back up to speed.
Results are correlated directly with an organization’s integration of vision, strategy, and structure. These key business decisions determine the productivity of available resources. Organizations which divert resources away from the visionary strategic path find themselves not reaching their intended milestones and ultimate performance goals. The organization “bleeds” resources which aren’t generating the desired return.
One approach for businesses in all stages of development is to undertake a business planning process. When an organization embraces a planning process, it is required to develop the self-awareness discussed earlier. From self-awareness the organization is able to identify and evaluate its alternatives. The business planning process is much more than the development of a document. Business planning requires all levels of the organization to engage in identification and quantification of existing resources, planned resource demands, and availability of those resources.
The definition and analytical process must focus on a realistic view of the existing business, its market, customers, and the operational elements of people, processes, and systems. These are the variables which determine what resources are currently available and the level of capital needed to sustain the organization. In order to grow, an organization must determine how much additional capital is needed. The capital demand is a function of the additions to infrastructure and the increased activity an organization must undertake – increasing production, prospecting and closing more customers, etc.
The financial performance – positive or negative – is a RESULT of the clarity of vision, the execution of strategy, and the efficiency and effectiveness of the business structure. Generating positive financial results requires leadership and management of the non-financial aspects of the business. The non-financial aspects utilize and generate capital. The numbers reflect how well vision, strategy, and structure are aligned toward a profitable objective. Ask yourself the following questions:
- Where do I want my business to go?
- What direction is my business currently following?
- Is my current business strategy profitable?
- Do I know where my profits are coming from – which customers, products, services, etc.?
- Are all of my customers profitable?
- Am I operating efficiently and effectively?
- Do I have the right skill sets and systems in place for where I want to take my business?
- Are external factors driving the decisions or do I chart a course based on what my business can do and deliver?
- What isn’t working?
- What do I need to change – clearer vision, different strategy, or change operating structure?
The answers to these questions can guide you to toward the steps needed to improve your organization’s performance. FOCUSing your business and aligning its activities enables you to achieve more results with fewer resources. Instead of taking a shotgun approach, you begin to have a laser focus which enables you to direct your efforts with precision.
Copyright © 2004 Lea A. Strickland and F.O.C.U.S. Resource, Inc.