chapter 10: building an organization capable of good strategy execution: people, capabilities and structure

we will continue with chapter 10: building an organization capable of good strategy execution: people, capabilities and structure.

10 managerial tasks crop up repeatedly in company efforts to execute strategy: 

staffing the organization well

building the necessary organizational capabilities

creating a supportive organizational structure

allocating sufficient resource

instituting supportive policies and procedures

adopting processes for continuous improvement

installing systems that enable proficient company operations

tying incentives to the achievement of desired targets

instilling the right corporate culture

exercising internal leadership

The two best signs of good strategy execution are whether a company is meeting or beating its performance targets and performing value chain activities in a manner that is conducive to company-wide operating excellence. Shortfalls in performance signal weak strategy, weak execution, or both.

Building an organization capable of good strategy execution entails three types of organization-building actions: 

 staffing the organization

assembling a talented management team, and recruiting and retaining employees with the needed experience, technical skills, and intellectual capital

building and strengthening core competencies and competitive capabilities

developing proficiencies in performing strategy-critical value chain activities and updating them to match changing market conditions and customer expectations

structuring the organization and work effort 

instituting organizational arrangements that facilitate good strategy execution, deciding how much decision-making authority to delegate, and managing external relationships

Structuring the organization and organizing the work effort in a strategy supportive fashion has four aspects:

• deciding which value chain activities to perform internally and which ones to outsource
• aligning the firm's organizational structure with its strategy
• deciding how much authority to centralize at the top and how much to delegate to down-the-line managers and employees
• facilitating the necessary collaboration and coordination with external partners and strategic allies.

To align the firm's organizational structure with its strategy, it is important to make strategy-critical activities the main building blocks. There are four basic types of organizational structures: the simple structure, the functional structure, the multi divisional structure, and the matrix structure. Which is most appropriate depends on the firm's size, complexity, and strategy.

that all for today..till we meet again..bye2:):)