Organisations are complex entities because they are made up of people, systems, processes, beliefs, aspirations and so on. If we need to develop into effective managers of organisations, we need to find some ways of simplifying the complexity. We need to be able to break them down into components that we can get our heads around. We need to understand what is going on in them and, if appropriate, change them.
There is a basic framework which indicates the areas – at the heart of the framework (and the organisation) is its strategy, the plan by which it will achieve its purpose. Surrounding the strategy are four broad categories of activity; these are component parts of all organisations and they can be managed. They are:
- The processes – the flows of work through the organization
- The structure – how work is allocated or divided up
- The hierarchy – how the organization is supervised, how decisions are made and where accountability lies
- The people – what affects they work and behave
This is the basis we will use to enable us to understand organisations.
If the organization is to fulfill its purpose it must have a strategy to do so. In general a strategy has some broad component parts which the organization should have spent time developing, considering the implications of, and laying plans to support.
The components of organizational strategy should be:
- Purpose – which we have already discussed; a clearly articulated and agreed reason for being in existence. An answer, or series of answers, to the question: Why are we here and what are we here to do? That purpose should be developed in terms of the enduring reason for
- Existence – it should not be, as objectives are for example, time bound or subject to radical change. The way in which the purpose may be delivered may change, but usually not the purpose itself
- The organization also needs a vision. This really describes what fulfilling the purpose looks and feels like at some time in the future. The vision provides a destination (again not an objective) for the organization, a point of aspiration. It should pull the organization rather than pushing it. It should be shared. It does not matter how it is described just so long as everybody understands and shares the same vision
- Next we need a strategic intent; this is a description of the markets in which we are going to play, and the sorts of products and services we are going to provide. Strategic intent also describes how the organization will differentiate itself from its competitors and hence the strength and the competencies it will have to develop to be different
- Becoming more specific as we move on, the next set of things an organization needs are the critical success factors, those things which we have to get right in order for us to achieve our strategic intent. Critical success factors are, again, not objectives; they broadly describe things that must go right for us. They serve to concentrate the effort of the organization on achieving them, and they change as time goes on
- Strategic intent and
- Critical success factors
Help to frame the organisation’s strategy.
Increasingly, as the pace of change accelerates, strategies need revision, change and update. For some organisations a major strategic competence will be the need to be able to change fast. The way the organization is structured, the processes it uses and the conduct of its people will either assist or frustrate this need to change.
Next week: Responding to a radical change in strategy
Excerpts from The University of Leicester Diploma in Management – Resource Development International (RDI) Jamaica. www.rdijamaica.com