Summary
A successful organization that is both productive currently and viable long term has integrated its vision, strategy, and structure 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 ability 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.
Introduction
A successful organization that is both productive currently and viable long term has integrated its vision, strategy, and structure to enable financial success. An organization’s ability to achieve every iota of success it is capable of delivering depends first upon its clarity of vision, second on its ability to select the appropriate strategy (or strategies) to accomplish the vision, and ultimately on the structure it puts in place to deliver the “goods” to the customer.
Clarity of Vision
Defining the Organization’s Purpose
Clarity of vision is essential, as no business can serve every master or every customer. When there is a clear vision of who the company serves and what problem the organization is solving, the business can direct its scarce resources to its priority activities.
Guiding Decision-Making
The organization’s vision is the consistent thread that weaves throughout the decision-making process, beginning with selecting an appropriate strategy for the organization.
Selecting the Right Strategy
Importance of Appropriate Strategies
Selecting an “appropriate” strategy is key. The organization that chooses a strategy it cannot execute or deliver because of resource limitations or other factors is an organization that cannot achieve the maximum degree of success.
Organizational Self-Awareness
An organization that distinguishes between possible and deliverable strategies, even challenging ones, shows strong self-awareness. Its self-awareness depends on its business development stage, resources, skills, and structural capabilities achievable within a three- to five-year strategy timeline.
Building the Right Structure
Aligning Structure with Vision and Strategy
An organization can build infrastructure to deliver strategies by identifying gaps and assessing existing capabilities. Today’s structure likely won’t match next year’s, and it definitely won’t suit the organization in three to five years. The structure depends on current operations and the company’s future vision.
Delivering the Product
Structure arises from an organization’s need to deliver the “product” and the supporting activities required to produce, market, sell, deliver, and collect payment.
Timing and Integration Challenges
An organization must be careful not to mistime the structure elements – adding them too soon drains the organization’s resources and prevents it from capitalizing on opportunities. Further, adding structural elements requires recognizing their impact on current capacity, systems, and processes. Integrating new elements with existing ones often results in a period of diminished capacity while the entire organization is back up to speed.
Integrating Vision, Strategy, and Structure
Driving Productivity and Results
Results correlate directly with an organization’s vision, strategy, and structure integration. These key business decisions determine the productivity of available resources. Organizations that divert resources away from the visionary strategic path do not reach their intended milestones and ultimate performance goals. The organization “bleeds” resources that aren’t generating the desired return.
The Role of Business Planning
Developing Self-Awareness
One approach for businesses in all stages of development is to undertake a business planning process. When an organization embraces a planning process, it must develop the self-awareness discussed earlier. Through self-awareness, the organization can identify and evaluate its alternatives.
Beyond Documentation
The business planning process is much more than developing a document. It requires all levels of the organization to identify and quantify existing resources, planned resource demands, and their availability.
Realistic Analysis
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 variables determine the current available resources and the capital needed to sustain the organization.
Capital Demands for Growth
To grow, an organization must determine how much additional capital is needed. Capital demand is a function of the additions to infrastructure and the increased activity an organization must undertake, such as increasing production, prospecting to close more customers, etc.
Financial Performance as a Result
Reflecting Non-Financial Alignment
Financial performance, positive or negative, results from 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. These elements utilize and generate capital. The numbers reflect how well vision, strategy, and structure align toward a profitable objective.
Key Questions for Organizational Success
To guide your organization toward improved performance, 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 come 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: a clearer vision, a different strategy, or a change in the operating structure?
Conclusion: Achieving Laser Focus
The answers to these questions can guide you 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, allowing you to direct your efforts precisely.
