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Opportunity series. Aligning capacity and strategy

by StayRelevant
19th August 2020

Think opportunities. The new reality represents a great time to sharpen our axes. All organisations have room for improvement. Sometimes, we are not aware of some of them, sometimes we deny the evidence, or we feel it would be too hard to change something.

So here is the first opportunity: our organisational capacity is not in sync with our strategy.

There you have it. The way you do things does not help you to achieve what you want. In other words, you are allowing things that hurt your business. Even more, you are leading things that are damaging your ability to compete and win in the way you have selected.

Ouch, that hurts! The first reaction is denial. No, that cannot be happening. We are thorough, smart and are on top of things. What are you talking about?

The main step is realisation. To do something the way we always did it, or most organisations do it today is a deadly trap. The easy thing is to keep going, but it comes at a price we probably cannot afford.

Let´s review the concept of organisational capacity. These are the things our organisation must be good at to be able to win. Simply put, this is what is required for us to execute our strategy successfully.

We look at things like structure, culture, ability and competencies of our people, leadership style, core processes.

Depending on how you want to compete, i.e. what your strategy to achieve growth is, you are going to need a different set of all those key organisational capacity concepts.

As it turns out, many organisations are not adapting those things to fit with their strategy and experience a painful misalignment that hurts results. Oxford professor Jonathan Trevor wrote a really good book on the topic.

Many leaders are not aware of some of the conflicting actions that provoke this misalignment. As the business saying goes: every system is perfectly designed to get the results it gets. The downside is that everything we do wrongly is limiting those results and cancelling (or limiting) the positive impact of our good work.

I often talk to MDs and leaders who tell me about what they need to do differently moving forward to grow. They refer to changes in their strategy to satisfy the needs of a changing market.

Not many of them are able to articulate how their current values, hierarchy, promoted behaviours, performance management, compensation, or development activities are going to change to fully support this strategy.

Many leaders tend to thing there is one single best way to do some of these things, regardless of what they want to do and what the market is changing. Many feel it will make no difference or feel they can achieve something different without adapting that element they so wholeheartedly believe in.

To make it more interesting: different parts of an organisation may need to follow a different kind of strategy, depending on how important innovation, external collaboration, or process efficiency are to their strategy. Yet, many people management and cultural aspects are the same.

Adapting our capacity is much more than hiring some new profiles, or developing a specific skill, or competence. It covers multiple aspects and needs to be done in coordination.

How aligned is your organisation? What are the behaviours we need to promote and how do we do it? How often do we review their value? How do we make sure our company is aligned at all levels to move at full speed?

The right capacity makes an impact on our people, customers and results. Shall we review it?

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