Strategy drives structure: does your Service organisation stack up?

One of the key roles of a Service Leader is to periodically ask the question, is the current organisation structure going to deliver the shared business strategies. Taking a deeper reflection of this critical question will potentially be the difference between achieving the company objectives and capturing all the identified opportunities versus flat or no growth. 

Structures based on models you have seen; or your perception based on standard department structures; or built around mechanistic process or individual employee needs consistently underdeliver, i.e. someone resigns, and you simply replace; or a new job role is introduced in the absence of a total structural review; or you want to retain an employee who has resigned so you give them an expanded role. The key reason for this is context – very few organisations are in the identical context in terms of their growth ambition, business objectives, margin and profitability expectations, however, all of these are often consistent over a period of time for a given company, often known as the business plan or 1-3-year plan. The difference is the evolving and often changing business strategies and just like a chess game, need intervention if they are not achieving their identified ambition. As challenging as this activity is, reviewing the organisation structure versus complacency which is the enemy of success is critical. 

Strategic direction, company strategies, terms that are applied in different ways, however, consistently they reflect the focus of a company to achieve their states objectives/capture their business opportunities by leveraging their strengths, addressing organisational weaknesses, capture identified opportunities or alleviate threats to the current business. 

Enough of the background and theory, how do you evaluate the strength of your Service organisation structure. 

To commence a review of structure it helps to ensure you document or have in front of you the business opportunities your company is pursuing and stated strategies. In the visual above, the business opportunities and stated strategies are the WHAT, whilst the HOW is the structure, one of the core capabilities that will deliver on your companies’ aspirations. 

The visual below indicates an example of the steps or path a Service organisation may take on their journey from full Product to Service as their primary objective – which step is your organisation at? 

As you evaluate your current context, also consider the strategies your company is pursuing the next level, e.g. S1 to S2. In this example the structure to support this direction will potential require a very different leadership background when hiring, especially as the past often predicts the future in hiring. Leading a team aspiring to transition to the Service from Product as an additional capability will require a different capability, e.g. order taker to demand generator. 

Let’s continue the discussion with a macro look at the structural implications of this strategic direction. The visual below indicates the potential macro organisation structural change that will be critical to drive the new strategy. 

In this example structure the previous structure can be seen to be a traditional product focused machine sales organisation. The introduction of Service as a portfolio item will demand a new structure and most certainly the acquisition of new capabilities. 

Strategy drives structure is the mantra, the execution extends to a transformation exercise in most cases with various requirements being critical in the evolution of the new structure which may include new ways of working; revised accountability (DRCI/LPD) matrix and most certainly at the very least new job descriptions for the existing team and new job profiles for external hiring as many of your current team may not be aware of what this ‘new’ landscape looks like and should not be hiring the same type of people.  In addition, upskilling the workforce in new Selling Service or Internet capability will be core to enable delivery of the new strategy. 

In summary, structural evolution is not a nice to have but has to be driven to the strategic intent – a holistic approach is required if the transition is to be successful, critical to this is the hiring of the ‘right’ Service Leadership team – the right selection will accelerate the journey and deliver the aspiration. 

Good luck in your quest of building a competitive Service organisation and if you get stuck or feel you need support or even want to outsource the entire process, do not hesitate to contact us at: contact@serviceleadersmatters.com 

Richard Cowley

Founder and Partner – Service Leaders Matters.

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Service Leaders Matters partners with B2B businesses to assess and acquire top service leadership talent to drive breakthrough performance.

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