16 - Strategic Organization
Having described the qualities of a strategic organization, and particularly the way in which going to extremes can have harmful results, the authors suggest that the organization itself is the means by which the setting for each of a company's switches is determined. That is to say that leadership may wish to state what it intends for the company, but the whole of the organization will react in a way that facilitates or prevents these goals from being achieved.
As stated at the beginning of the book, there is no "one best way" that will suit all companies, all markets, and all cultures, and there are too many conflicts among the various "schools" of strategy to merely adopt and adhere to a given model.
In this, the final chapter, the authors will consider the way in which each organization should encompass different characteristics, validated by the organization itself for their potential to find a sustainable and productive balance between extremes.
Organizing for Creative Strategy: Getting the Particular Balance Right
The authors suggest that the behavior of people within an organization is influenced strongly by the way in which the organization is structured, much in the same way that the way in which the actions taken by a sports team depends heavily on the formation in which the players are arranged at the start of play. In particular, a firm with a complex hierarchy will be more rigid and bureaucratic than one with fewer layers of management, and one that has four separate regional divisions will behave as if it is four separate companies - there will be little interaction or sharing or information across the borders.
With this in mind, consider the way in which some companies have chosen to structure and restructure themselves:
- General Motors structures itself into different brands to provide a diversity of products. There is little communication between the designers and engineers for their automobiles, but marketing is centralized to ensure the brands do not compete over customers.
- Nike has recently restructured in order to be more innovative. Instead of creating divisions based on the product category (shoes, apparel, equipment), it is instead structuring itself according to sports/activities to discover synergies and opportunities.
- The Philips corporation, which has long been struggling to assemble the right collection of business units, decided to focus on specific industries (consumer technology, lighting, and healthcare) and is looking for ways to simplify the organization further.
It's also obliquely suggested that the resources that a firm has at its disposal and the nature of the competitive context also have a strong influence over the culture of an organization, chiefly in determining whether the firm can be fluid or dynamic - or more aptly, whether it can sustain itself it if fails to be so. Smaller organizations in rapidly-changing industries tend to be flatter and more nimble, whereas larger ones in established industries tend to be more bureaucratic.
Organizing Creative Strategy
The authors describe organizations as being cyclical: they being with an original idea, gather the resources to pursue it, then manage the resulting organization as it perpetuates. The problem is that the original idea is not sufficient, anymore, to maintain the organization in perpetuity: the nature of competition is such that it is inevitable; that someone else will have a better idea that makes its predecessors obsolete. To remain sustainable, an organization must renew itself in order to avoid obsolescence.
This renovation is cyclical and perpetual - the chief difference between the first iteration and the second being that when the original idea gave rise to a corporation, there was not an organization in existence. The second iteration benefits from the existence of a ready-made organization that is in place to take immediate action - and it suffers from the fact that the ready-made organization may not be willing to take immediate action, devoted to the original way of doing things in spite of its decline in importance.
As such managing an ongoing organization must entail ensuring its competence at executing on a plan for as long as it is feasible or sensible to do so while, at the same time, maintaining a readiness to change course when the original plan becomes irrelevant - and not only to be ready to execute upon a new plan, but to be the driving force in the planning effort itself.
(EN: After this, the authors go back through the book and repeat some of the key points.)