What Organizational Strategy Is And Why Your Business ...

At its most basic, an organizational strategy is a plan that specifies how your business will allocate resources (e.g., money, labor, and inventory) to support ... SlingisnowSlingbyToast!LearnmoreSlingisnowSlingbyToast!LearnmoreSlingisnowSlingbyToast!LearnmoreSlingisnowSlingbyToast!LearnmoreSlingLoginGetStartedLoginWhatOrganizationalStrategyIsAndWhyYourBusinessNeedsItHomeBusinessGrowth&ManagementOrganizationalstrategyisn’tjustforbigbusinessanymore.Evenastartupcoffeeshop orcateringbusiness needstoplanstrategicallyifitwantstogrowandthrive.Butwhatexactlyisorganizationalstrategy,andwhydoesyourbusinessneedit?We’llanswerthosequestionsinthisarticle,giveyoufourkeyfeaturesofagoodorganizationalstrategy,andshowyouthebestwaytogetstarted.TableOfContentsWhatIsOrganizationalStrategy?WhyDoesYourBusinessNeedAnOrganizationalStrategy?KeyFeaturesOfAnOrganizationalStrategyTheBestWayToCreateAnOrganizationalStrategyWhatIsOrganizationalStrategy?Atitsmostbasic,anorganizationalstrategyisaplanthatspecifieshowyourbusinesswillallocateresources (e.g.,money,labor,andinventory)tosupportinfrastructure,production,marketing,inventory,andotherbusinessactivities.Whenyousitdowntocreateyourorganizationalstrategy,youshouldfirstdivideitintothreedistinctcategories:CorporatelevelstrategyBusinesslevelstrategyFunctionallevelstrategyThinkofeachcategoryasabuildingblockinthelargerorganizationalstrategythatguidesyourbusiness.Here’sabriefdescriptionofeach.CorporateLevelStrategyCorporatelevelstrategy isthemainpurposeofyourbusiness—it’sthedestinationtowardwhichyourbusinessismoving.Commoncorporatelevelstrategiesinclude:ConcentrationDiversificationNoChangeProfitInvestigationTurnaroundLiquidationMostcorporatelevelstrategieswillbebroadinscope,complex,andgearedtowardtheoverarchinggoalsofyourbusiness.BusinessLevelStrategyBusinesslevelstrategy isthebridgebetweencorporatelevelstrategyandmuchofthe“boots-on-the-ground”activitythatoccursinfunctionallevelstrategy.Becauseofthat,businesslevelstrategyismorefocusedthanthecorporatelevelstrategythatdrivesit.So,forexample,ifyourcorporatelevelstrategyisdiversification,yourbusinesslevelstrategiesmightlooksomethinglikethis:Increasemarketing budgetRebrandInvestigatenewmarketsBroadenexposureThosemorespecificgoalswillthenguideyouinsettingyourfunctionallevelstrategies.FunctionalLevelStrategyFunctionallevelstrategies arethespecificactionsandbenchmarksyouassigntodepartmentsandindividualsthatmoveyourbusinesstowardthegoalscreatedbyyourcorporatelevelstrategy.Theyareadirectoffshootofyourbusinesslevelstrategies.Functionallevelstrategies,bynature,willbeverydetailed.Soifoneofyourbusinesslevelstrategiesistorebrandyourproduct,afunctionallevelstrategymightbeforthemarketingdepartmenttoinvestigatewhichcoloryourproductshouldbesothatitappealstoyourtargetaudience.Thosethreestrategiestogether—functional,business,andcorporate—makeuptheverybroad,verygeneralorganizationalstrategythateverycompanyneedstobesuccessful.WhyDoesYourBusinessNeedAnOrganizationalStrategy?1)SetsDirectionAndPrioritiesWe’vesaiditalready,butit’sworthsayingagain:anorganizationalstrategygivesyourbusinessdirection.Withoutthatdirection,yourbusinessmaybeflailinginthewind,sotospeak.Oneweekyou’reworkingtowarddiversification,andthenextweekyou’reworkingtowardnochange(oppositeorganizationalstrategies).That’sarecipefordisaster.Attheveryleast,anorganizationalstrategygivesyouconsistency.Anorganizationalstrategyalsogivesyourbusinesspriorities.Itdefinessuccessandshowsyouwhatactivitiesyoushouldputfirst(andsecond,andthird)inordertomoveyourbusinesstowardthatgoal.2)AlignsTeamsAndDepartmentsInACommonGoalGettingallyourdepartmentsandteamspullinginthesamedirectionishardenough.Withoutanorganizationalstrategy,it’snearlyimpossible.Whenyousetyouroverarchingstrategy —evenifit’ssomethingfairlyvague,likeincreaseprofits—yougiveallyouremployeesacommongoaltogetbehind.Thatcreatesalignmentwithindepartments(horizontally)andthroughoutyourorganization(vertically).3)ClarifiesAndSimplifiesDecisionMakingDecisionsaboutyourbusinesscanbesomeofthemostdifficultyou’lleverhavetomake.Butwithanorganizationalstrategyinplace,youcanreducethenumberofdecisions youhavetofaceandclarifywhichonesmakethemostsensebasedonyourgoals.So,forexample,ifyourorganizationalgoalistoincreaseprofitsbutyourproducthasalreadysaturatedthemarket,youonlyhaveoneortwochoices(e.g.,diversify).4)AllowsYourBusinessToAdaptIfyouaredrivingtoworkinthemorningandyouencounteradetour,doyouturnaroundandgohome?No.Youfollowthedetour(or,ifyouknowthearea,youfindabetterwayaroundtheconstruction)untilyouarriveatyourdestination.Yourorganizationalstrategyislikethatdestination(gettingtowork).Ifproblemsarisealongtheway,youdon’tgiveupcompletely;youadapt inordertocontinuemovingtowardtheultimategoal.KeyFeaturesOfAnOrganizationalStrategy1)RealisticYourorganizationalstrategyshould,firstandforemost,berealistic.Ifyourannualprofit isconsistently$100,000,thensettingthegoaltomake$1,000,000inprofitnextyearmightbeabitunrealistic.It’sgreattohavehighstandards,butmaybecreatingsmallergoalstogetyouthereincrementally(like$250,000nextyear,$500,000theyearafterthat,andsoon)isabetter,morerealisticdecision.2)MeasurableAllorganizationalstrategiesshouldbemeasurable.Sayingthatyouwanttogetbetter(aqualitativegoal)isfine,butyouneedtocomeupwithsomewaytomeasurehow you’regettingbetter.3)SpecificWhensettingyourorganizationalstrategy,makeitasspecificaspossible.Insteadofsaying,“Wewanttobethebestintheindustry,”say,“Wewanttohold51-percentmarketshareamongstallourdirectcompetitors.”That’saspecific,measurablegoalyoucanworktoward.4)LimitedYourorganizationalstrategyshouldn’tbeopen-ended.Itneedsadeadline.Mostbusinessesgivethemselvesthreetofiveyears(again,bespecific)toreachtheirorganizationalgoals.Thisdeadlinedictateswhatyoudoandhowquicklyyoudoit.TheBestWayToCreateAnOrganizationalStrategyOneofthebestwaystostartcreatinganorganizationalstrategyistoexamineyourcurrentprocedures.Scheduling,forexample,isnotoriouslycomplicated.Preparingyourbusinessforthechangestocomemeansstreamliningtheprocesssoyourteamcanbetteradaptonceyousetyourorganizationalstrategies.Fewthingscanhelpyouinthatregardthewayschedulingsoftware can.AppslikeSling provideeverythingyouneed—aneasy-to-useinterface,powerfulcommunications features,timeclock,laboranalytics,andmore—toreducethetimeittakestoscheduleyouremployees.Thatmeansyou’llhavemoretimetosetgoalsandguideyourbusinesstowardsuccess.Formorefreeresourcestohelpyoumanageyourbusinessbetter,organizeandscheduleyourteam,andtrackandcalculatelaborcosts,visitGetSling.com today.Seemorein:BusinessGrowth&ManagementFindthearticleuseful?Sharewithothers:RelatedarticlesCorporateLevelStrategy:WhatItIsPlus9ExamplesSuccessinbusinessisnotarandomoccurrence.It’stheresultofplanning,p...FunctionalLevelStrategy:WhatItIsPlus18ExamplesFunctionallevelstrategymaysoundlikeadifficultconcept,butonceyouunder...BusinessLevelStrategy:WhatItIsPlus3ExamplesIfyou’relookingforawaytobridgethegapbetweenyourmoregeneralcorpor...Youremailaddress