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Alfred Chandler -- Author of The Visible Hand: The Managerial Revolution in American Business The historian Alfred Chandler of Harvard Business School wrote a seminal book published in 1977 on the history of strategic decision making at the highest levels of Corporate America , including DuPont, General Motors, Standard Oil and Sears Roebuck. The book was called The Visible Hand: The Managerial Revolution in American Business. In this work Chandler proclaimed a maxim for the ages that has been followed as doctrine by strategists and consultants alike ever since. The maxim: “Structure follows Strategy.” That is to say, all aspects of an organization’s structure, from the creation of divisions and departments to the designation of reporting relationships, should be made while keeping the organization’s strategic intent in mind. Strategy, of course, lines up the arenas and markets in which a company will compete, proclaims a targeted customer base, and asserts the matters by which the company will seek to differentiate itself. Chandler described how the successful progress of mid-twentieth century General Motors can be attributed to the strategic foresight of Alfred P. Sloan, who laid out the famous divisions of GM: Chevrolet, Pontiac, Oldsmobile Buick, Cadillac – listed here in order of pricing segment and lined up with market segments — so that each division could seek to please an intended customer segment. This is structure following strategy. Chandler showed that the need to reorganize — or to “restructure” — is triggered by a strategic shift driven by new technologies or market changes. The way that you organize your company or organization to optimize the pursuit of strategic objectives is an important part of organizational design. Other design elements, such as hiring and personnel development practices, communication and decision-making systems, reward, recognition and renewal systems, all must be aligned around the chosen structure, but first you must decide upon the optimal structure for attaining your strategic objectives. When considering a change in organizational structure, keep in mind the following criteria for a good structure:
Generally, there are five ways to structure a company or corporation: Organize by Function, Product, Customer Segment, Business Process, or Matrix. Here are the pros and cons of each: Functional Structure (e.g. Operations, HR, Finance, Marketing Departments): Pro:
Con:
Organizing around Product Lines or Programs Pro:
Con:
Organizing around Customers or Market Segments Pro:
Con:
Organizing as a Business Process (as championed by many experts on corporate “reengineering”) Pro:
Con:
Organizing as a Matrix (e.g. customer segment groups crossed in matrix form by functional, supporting departments. Pro:
Con:
Legal Structures of Organizations Legal Forms and Traditional Structures of Organizations Market Research — Inbound Marketing Planning Your Research Market Research Find and Feed the Feeling Strategizing Understanding Strategy and Strategic Thinking Competitor Analysis Porter’s Five Competitive Forces (Part I) Porter’s Five Competitive Forces (Part 2) Competitive Intelligence Product Planning Product Management E-Commerce Sales and …
All About Business Planning: Complete Manual With Updated Extensive Resources Copyright Carter McNamara, MBA, PhD. NOTE: Your business plan should be highly customized to your current organizational situation. Thus, using a generic business plan template could completely misrepresent the needed focus of your business plan. (This step-by-step manual is a complement to the topic How …
Biographers of Napoleon Bonaparte talk about his ability to size up a situation with a single coup d’oeil,(pronounced koo-DOY), meaning “a stroke of the eye” or “glance.” Napoleon was so knowledgeable about his strategic situation—the landscape, the enemy, available technology, similar situations from the past—that he could understand and respond quickly to ever- changing circumstances. …
The goal of strategic planning should be to produce a Plan that is 1) relevant, realistic and flexible; 2) with a very highly likelihood of being implemented; 3) in order to achieve the purpose of the planning, e.g., a purpose to evolve to the next stage of development, expand marketshare or survive major cost-cutting. A …
Here’s a list of the biggest mistakes that I have seen made by strategic planning facilitators over the years: 1. Not getting sufficiently trained on how to do facilitating, e.g., planning the meeting, goals, ground rules, which techniques to cultivate complete participation, doing interventions, managing conflict 2. Not learning a variety of strategic planning models, …
LinkedIn founder and triple billionaire Reid Hoffman has two endearing mannerisms that reveal the way he sees–and reasons with–the strategic environment. First, he peppers his statements with the word so. Almost a verbal tic that would grate on a speaking coach like the overuse of the dreaded uh … but he uses it more like …
Guest blog from my colleague, Adam Brock, Director of Social Enterprise at Joining Vision and Action (formerly JVA Consulting): How can a well-meaning startup avoid “Silicon Valley Syndrome” and actually use a social startup to create real value for society? Every era has an industry that epitomizes its values. At the turn of the 20th …
The best decision-makers in chaotic “fog of war” conditions seem able to call on intuition – knowing what to do without knowing why or how they know.
The Consultants Development Institute is offering a complete, online series to teach how to facilitate strategic planning for any type of organization. The series Facilitating Strategic Planning includes a pro bono Audit Track with unlimited enrollment. In that Audit Track, you get free access to all of the courses, tools, assignments and discussion forums with …
Moneyball and the Work of the Strategist Paul DePodesta was recently named the Chief Strategy Officer by the Cleveland Browns of the National Football League. This is significant because, as any fan of Moneyball knows, Mr. DePodesta has spent his career in the sport of baseball, not football. This matters to the community of strategic …
To engage in strategic thought, you must think and reflect on the big picture—on the diverse players and forces in your competitive environment. Anticipate the future. Use your right brain for intuition and wisdom, your left for planning. As Isaac Newton said “truth is the offspring of silence and meditation.” Here are 50 tips and …
When you are faced with the most important and strategic decision of your life, where can you go for wisdom? Can you find insight in a book of history? Facing a world in crisis, John F. Kennedy did just that. Generally, we learn skills by trying something, failing, and trying again until we get it …
The results are in – Execution trumps strategy. Your business plan may have great strategies, but it will be a great failure if executed poorly. So just hire the right people, right? Turns out the answer is not what you think. At least according to a recent Harvard Business Review Article. Five Myths About Effective …
Now here’s a frank perspective: Balance doesn’t work. So don’t even try. Accept the fact that the only way to really make something happen is to go “full out” at it, with everything you have.
Last week, I attended a celebration for B corps in Colorado. These are for-profit companies certified by a nonprofit called B Lab for achieving social and environmental goals along with business ones. What I noticed differently from other discussions among B Corps in the past, was a stronger focus not only on this vibrant community … |