Which should come first, Structure or Strategy?
Even for the most raw and rapidly conceived start-up company, the entrepreneur and initial management team have some strategy in place – some reason to believe that they should begin conducting business. For more established businesses, strategy has been in place from the beginning regardless of whether it was the result of careful consideration and study of the marketplace or whether it has been improvised over time in a series of convulsions reacting to customers, competitors and internal capabilities.The important point moving forward is that a company at any stage in its evolution will benefit from serious, deliberate evaluation of its company’s basic strategic building blocks (markets, customers, competitors, competencies, opportunities, threats and all the rest!). Once the business analysis has been performed and the company strategy is formalized, then structure should be chosen to support the strategy in the most effective way possible. The implication here is that a management team formalizing their strategic plan for the first time may realize that they need to make significant changes to their structure. In many cases, these changes do not require immediate, disruptive and, perhaps, risky re-structuring moves. Clear structural changes indicated by an adjustment in business strategy should be undertaken to maximize the long-term structural benefits without compromising existing revenue streams, customer and employee relationships and market position in the near term.