In theory, structure always follows strategy — according to Alfred Chandler and Henry Mintzberg — but in practice, this is certainly not always the case. An organization regularly sets out a new strategy, for example when appointing a new CEO or due to changes in the outside world. But this does not automatically mean that she subsequently also changes the structure. In fact, that often does not happen, even though it is necessary. This leads to all kinds of frictions, ambiguities and extra complexity, so that the execution of the strategy is unsuccessful. In this article, Casper Hendriks, management consultant, and Dolf L'Ortye, one of the founders of Summiteers, emphasize the importance of regularly assessing whether your organization is still optimally equipped to implement the strategy.

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The structure tells the story (if it's good)

If a company has its structure in order, you can tell what the strategy is from the structure. If an organization is clearly organized around customer groups, the strategy is probably aimed at optimally serving those customer groups - for example in certain geographies - and their specific needs. On the other hand, a company that focuses on an innovative product will have a structure that is organized around that product. Take an organization like Tesla; they produce its cars in Germany, among others. Customers order online — in the absence of dealers — and it doesn't matter if a German, a Dutchman or a Norwegian drives a Tesla. The experience is the same. For Tesla, a country structure is therefore less relevant. Their focus is on the product. This is reflected in the structure of the organization.

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Have the guts to change the structure

Your structure is a tool, an instrument and that instrument must fit. After all, you're not going to screw into the wall with a hammer either. However, many companies are struggling to adapt the structure, even though they know it is necessary. This is because it involves a lot of work, such as designing that new structure with associated responsibilities, roles, and functions. You may even have to go through participation processes. Another important reason is that the structure directly affects the influence of the current management. Are they waiting for it? Fine to change the strategy, but should that also affect my job right away? These processes can be time-consuming and complex, so people tend to leave the structure untouched. But without these adjustments, effective implementation is very difficult. There is then noise about exactly who is ultimately responsible for certain tasks because the old responsibilities no longer match the new direction. Imagine that a director of operations operates at the same level as the director of customers or the director of products, while in the new strategy, it actually makes more sense to subordinate operations to product groups. After all, making a strategy does not stop with determining the direction, it should also say something about how you're heading in this direction. This means that you need to involve the right people and that the structure of your organization must match that. This is the only way to achieve a workable and successful strategy.

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The need for regular structural review

Our advice to organizations is therefore that they can test more often whether the structure is still optimal for implementing the strategy. This does not necessarily mean that a major reorganization is necessary, but it does mean that you regularly make small adjustments to ensure that the structure matches the strategy. This helps to reduce complexity and increase the effectiveness of the organization.

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