A while ago I had the opportunity to be a business consultant for a company.
The company was facing with major disorganization in the accounting department that transcended to other areas impacting the operational efficiency, as well as, profitability of the company. Primarily, the strategy was not clear, it was either confused or ambiguous. Hence, the execution was being greatly impacted by those factors. In the process of executing a strategy, Porter (2011) identifies four fundamental building blocks that managers can have an influence on that execution: clarifying decision rights, designing information flows, aligning motivators, and making changes to structure. The company I am describing was having issues on all of these aspects which caused it to work in a deficient and somewhat dysfunctional way.
To begin, the decision rights were not clearly defined. For instance, employees in two departments were holding each other accountable for work that was not getting done and pointing fingers to each other along the way. Porter (2011) explains that a strategy is the sum of decisions made by employees every day based on the information they have and their own self-interest. This issue alone causes the other aspects of the strategy execution to be affected.
Then, the flow of information was being constrained by the lack of clarification on employees’ responsibilities. The internal conflict did not allow the information to move faster among departments. In addition, the lack of automation on certain tasks was taking much longer for the work to be completed. Consequently, the president of the company did not access to timely and reliable information which would allow him to make strategic business decisions.
A Process Map in this case, would have been able to ensure that the flow of information moved smoothly along with finding opportunities for innovation along the way. For instance, software and apps could have been incorporated reducing manual labor and speeding up the time it took to complete certain tasks.
Furthermore, the company was trying to provide incentives to employees, but they were being ineffective because there was not clear definition of certain functions. As a result, employee morale was low causing them to be distracted from the company’s strategy and goals. The 15 daily stand-up meeting could offer a unique opportunity for managers to focus on solutions that will bring the company closer to its strategies and to reward the employees’ performance. Also, this was a chance for the president and owner of the company to explain the employees how their day-to-day choices affected the company’s bottom line.
Finally, contrary to what Porter (2011) mentions about organizational structure where companies start moving positions around, because of the size of this company, there was no need to shift people around different positions, but to define their roles more clearly.
Finally, as Porter (2011) reveals that the Balanced Scorecard addresses serious deficiency in traditional he management systems. He states that “the BSC aids as a way of communicating to manager the how to implement the value-maximizing strategies” (p. 34).
The combination of all of these elements mentioned above could have facilitated a successful strategy execution in this organization.
Porter, M (2011). The Five Competitive Forces That Shape Strategy. HBR’s 10 must reads on Strategy. Boston, MA: Harvard Business Review Press.