There are no prescriptive formulas for structural form.
However, there are some simple rules we have developed over the years:
- Enable not hinder – the structure should enable the efficient/effective delivery of the strategy and operational processes. It should not be a hindrance. All too often we hear how the organisation structure/cultural norms create the need for work around solutions – an unnecessary hindrance to corporate achievement.
- Simple not complex – lines of accountability, responsibility and purpose should be easily understood. When we go into a company for the first time one of the first questions we ask is can we see the organisation structure please. If its easy to see who is doing what to deliver on the corporate objectives then the business team will share equal clarity.
- Fluid not cast in stone – as the strategy and operational processes change to deliver a change in emphasise so should the structure to accommodate their delivery.
- Balance not bias – balance the responsibilities in accordance with the value derived via reference to the customer value chain.
- Functional form – match the structure to the organisational imperative. Consider, functional, matrix, business unit, cost centre, profit centre etc. to facilitate and drive performance outcomes.
Culture – Organisational DNA
Culture is at the heart of competitive advantage, particularly when it comes to sustaining high performance. When we discuss this with our clients, the majority agree that: Culture provides the greatest source of competitive advantage. In fact, most believe an organisation that lacks a high-performance culture is doomed to mediocrity.
Culture is the glue that holds an organisation together. It inspires loyalty in employees and makes them want to be a part of a team. It motivates people to do the right thing, not just the easy thing. At companies with winning cultures, people not only know what they should do, they know why they should do it.
Yet, while business leaders recognize culture’s crucial role, in our experience few companies succeed in building a winning culture.
The best companies succeed, we found, on two dimensions simultaneously:
- Firstly, every winning culture has a unique personality and soul that cannot be invented or imposed. Based on shared values and heritage, the company’s character needs to be discovered from within.
- Secondly, winning cultures usually embody six high-performance behaviours that are common to all high performers.
Winning Cultures Combine Two Elements:
Neither element is enough by itself to sustain a winning culture. A company can have a strong personality and soul, but still under-perform if it lacks the values and behaviours that motivate people in the organisation to do the right things. Similarly, high-performance behaviours pursued independently can shift an organisation into permanent overdrive and sever the connection that employees feel with the enterprise. It’s the combination of both elements that produces a winning culture.
The personality of an organisation is often taken for granted. Often the values of the founder are instilled in the organisation and shape its culture going forward. “Amaze yourself, amaze the world” at Apple, or “Never knowingly undersold,” at John Lewis are foundational values that have become ingrained into the very fibre of each business, informing day-to day decisions and behaviours. Proctor & Gamble, likewise, has managed to place the consumer at the heart of the company’s culture, which keeps employees focused on “touching lives, improving life” in every market in which they participate.
Traditions also count. Rituals, heroes and language give a company its unique feel.
The strongest cultures bind people together across both hierarchy and geography, guiding them to make the right decisions and advance the business without explicit direction. One John Lewis employee captured that notion well when he said, “We all work hard, but to do anything else would be like letting your family down.”
To turn commitment into strong performance, a company’s personality needs to be complemented by behaviours that motivate employees to excel over and over again. First, they aim high, so that employees remain fundamentally dissatisfied with the status quo. Energy gets focused externally on customers and competitors, rather than internally on issues of politics or “turf.” Employees think and act like owners, taking personal responsibility for overall business performance, not just their slice of it. They also exhibit a clear bias to action, with little patience for bureaucratic debate. People in winning cultures are team players who display high levels of passion and commitment, which usually includes hard work. The true test of a winning culture is whether the expectations of high performance and the desire to win are understood and widely shared.