Operationalizing Strategy with a Systems Perspective

While there are many books and much research on organizational development, this system view combined with some validated learning over time is a powerful way to look at organizational challenges as a coach/consultant.

Let’s take a closer look to define these areas then apply some validated learning from my own experience.

Business Outcomes – the outcomes desired from the business strategy selected

Org Structure – the structure of power and authority to facilitate decision making

Incentive Systems – rewards for individual and group performance

Work Systems – how people get work done in the organization

Collaboration Systems – systems to overcome the friction to collaboration introduced by the org structure

People Systems – hiring, firing, development, HR systems – both tactical and strategic

Validated Learning (observations and experiences over time)

• Business outcomes are required to think about the other dimensions; and interestingly, in my experience even some top leaders can struggle to articulate these, so it may require some elicitation and dialogue. I like to use the pithy term “operationalize strategy” when discussing this topic.
• Incentive systems usually mirror org structure fairly closely.
• The org structure will help determine both work systems and collaboration systems; however, collaboration systems have a stronger relationship because they must overcome the friction introduced by the structure itself.
• Incentive systems and people systems strongly impact everything else except strategy.
• People tend to focus first on org structure and work systems because they are the most visible, tangible, and even “fun” to work with.
• Each organization design decision made will impact the other dimensions so as the design is created, the entire system must be reevaluated.
• Organizations are typically good at people systems when it comes to tactical training and development, but more powerful levers are hiring, firing, and strategic training needs.
• The most common constraint on change involves incentive systems.

What observations and experiences do you have using a systems perspective to view organizational challenges? Has the use of a systems perspective helped overcome these challenges? Leave your comment below so that we can get the conversation started.