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A question faced by many business leaders in today’s dynamic, uncertain, and changing business environment is: Is our organization “Fit for Growth?” In most cases, unfortunately, the answer to this question is “no.” Reasons include the manner in which costs are managed and resources deployed.
The fundamental question needed to be asked is: how to assess whether the organization is Fit for Growth? Such an assessment is effortlessly possible through answering the following 3 questions:
- Does the company have well-defined Strategic Priorities that concentrate on strategic growth and which direct its investments?
- Do the company costs align with the Strategic Priorities? i.e., efficient and effective employment of resources toward the Priorities.
- Does the Organizational Structure enable achievement of those Strategic Priorities?
Imagining the converse side of these queries makes the picture clearer. That is, what are the consequences of: Not having clear Priorities, Inappropriate deployment of Costs, Not having a well-designed organization.
Positioning the company to be Fit for Growth requires basing it on the following 3 pillars of Growth:
- Set clear Strategic Priorities.
- Transform Cost Structure.
- Reorganize for Growth.
Setting the company on the 3 pillars enables it to direct investments towards the Capabilities that are most crucial and reduce—or eradicate—other costs.
Let us delve a little deeper into the details of these 3 pillars.
Strategic Priorities
Numerous warning indicators are apparent if the Strategic Growth Priorities of a company are not crystalized.
Warning signs such as being unable to keep track of the numerous initiatives that the company has going at the same time.
Senior executives of the company attending lots of unrelated meetings in a day. Executives being divergent on the most important capabilities of the company and how they relate to the strategic objectives.
Areas that can distinguish the company from its competitors not being properly invested in.
Research has established an important correlation between Capabilities and Strategy. Capabilities require lots of attention and investment because of their cross-functional effect and limited number.
It is therefore, needed to have clear Priority regarding which Capabilities to invest in.
Cost Structure
Inappropriate Costs Structure is also an indicator of incorrect priorities, particularly the amount spent on non-essentials.
Organizations aiming to be Fit for Growth make themselves lean and expend money purposefully. They can maintain their commanding position in such Cost Transformations by pursuing the 12 principles.
Costs are managed for efficiency as well as effectiveness using tools and practices that are usually grouped into 3 categories.
Growth
Organizations, over time, become slow in reacting to opportunities and do not move quickly enough, or are not in-line enough to work in unison. These are common manifestations, even in organizations that are run and managed well.
Interested in learning more about Fit for Growth? You can download an editable PowerPoint on Fit for Growth here on the Flevy documents marketplace.
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"Strategy without Tactics is the slowest route to victory. Tactics without Strategy is the noise before defeat." - Sun Tzu
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