Growth and change can take business leaders by surprise. As opportunities to grow a business emerge, it's easy and tempting to begin acting quickly before fully considering how your business can and should function to deliver the results you want out of it. Organizational strategy involves planning ahead to figure out how to tweak your company so that it achieves all of the goals, functions, tasks and outcomes you want from it. These hopefully involve growth but, sadly, can include downsizing and restructuring to help keep a business afloat in tough times. Once you have set your goals with organizational strategy, you lay in your course using organizational design.
Organizational strategy involves a plan for how to take your organization from here to there. Your destination may involve growth, diversification, greater attention to customer service, faster turnaround times for product delivery or lower labor costs. Finding the appropriate path to the goal is the heart of organizational strategy. For example, if you need to lower labor costs, you might determine that restructuring your existing staff to avoid duplicate functions and changing employee roles is the best strategy for you. If your goal is to give the best customer service, you may decide to beef up your call center or customer service department, which means opening more positions. This constitutes an organizational change.
Organizational design is the detailed articulation of organizational strategy. Design translates the goals and desires of business leaders into actual, tangible plans. In a case where downsizing is the strategy, organizational design involves figuring out which positions or departments to trim. When introducing a new line of business, organizational design means figuring out who is responsible for the new business, how many positions should be opened and where in the reporting structure the new line belongs. Normally, businesses draft these changes into a formal organizational chart so that everyone involved can clearly understand the changes and how the business should operate.
Architect Frank Lloyd Wright is famous for his design concepts in which he followed his principle, "Form follows function." This is essentially the same relationship between organizational design and organizational strategy. Design does strategy's bidding. However, when constructing a building, sometimes architects, land surveyors and contractors discover unforeseen obstacles that require a revision of a building's design. The same is true with organizations. For example, if restructuring or reducing a key department or position endangers a business's ability to deliver an important service, then leaders have to reconsider their design. Similarly, some positions and departments may not be efficient or profitable, but may exist for regulatory compliance purposes.
In order for organizational changes to become truly effective, strategists and designers need valid, complete information. Business leaders should take a thorough inventory of all of the positions, departments, processes, tasks and functions currently in play before figuring out the best course of action. It may turn out that a business isn't growing or achieving because of inefficiencies or kinks in the current organizational structure; therefore, a restructuring strategy is the most cost-efficient method. Leaders may also learn where they are seriously over- or under-resourced. A business trying to grow may discover that the primary limit is lack of labor in a critical area and that business growth doesn't require a major restructuring, but simply the addition of some positions within an otherwise sound organizational structure.
Matters of strategy and design can be somewhat complex. They affect operations, business culture, finance, and the human reactions and feelings of the people within an organization. This is why many companies turn to organizational and business strategy consultants to help them facilitate and manage the strategy and design processes. While many people think of large corporations as turning to consultants for this type of work, smaller companies at critical growth junctures often need the help as much or more. Determining what a company needs to grow is a complicated business and success can hinge on how well a business's course is plotted.