Create an organisational structure that supports your strategy
Simon Stremersch
Transformation Director | Strategy & Technology | Entrepreneur | Keynote Speaker
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In this new edition of "Transformation Insights," we will discuss how important is to structure your company in a way that supports a solid strategy.?
Private equity is fundamentally a people business. The return on investment (ROI) at exit often depends on the ability to mobilize the organization in executing the investment strategy. At KooKoo Ventures, we collected best-practices from our experiences across multinationals to SMEs, to provide a comprehensive overview of organisation performance levers for investment professionals.?
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In this newsletter, we elaborate on:??
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Organizational structures growth path?
Organizational structures are often under pressure when a company is growing exceptionally fast, as is often the case in buy & build strategies. A key question is what roles and functions should be centralized. A structure needs to support current business goals while being flexible enough to facilitate future growth; that's easier said than done.
Adjustments to the organizational structure can significantly increase performance but are among the most sensitive changes for employees.?
Biggest challenges and Tools?
One of the biggest challenges CEOs face today is finding the optimal organizational size that is both cost-efficient and supports business objectives. An inefficient organizational structure can lead to increased overhead costs, reduced agility, and a lack of clarity in roles and responsibilities.?
There is no one-size-fits-all answer. Your industry, history, and strategic targets determine what the optimal organizational structure looks like. Before you choose a preferred organizational structure, you should get clear on the competitive advantage your organization has over the competition and choose a structure best suited to that advantage. Are you cheaper, do you deliver higher quality, are you faster? These are considerations to keep in mind, and make sure they do not get lost as your organization grows bigger.?
The span of control is a key metric to account for in your design approach. Increasing the number of employees per manager can reduce costs, but excessive spans of control can compromise quality and employee satisfaction.?
The right organizational structure is a crucial enabler for business success both today and in the future. It provides the basis for operational efficiency, cost control, and strategic flexibility. Spend sufficient time on how you should adjust your organization over time to enable your strategy and EBIT targets.?
Business cases and best practices?
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Recent trends show a move towards flat structures that promote quick communication and decision-making, combined with a high degree of autonomy and responsibility at the individual level. Every company and sector is different, but have collected some best practices showcasing how specific organizational structures can enhance performance.?
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? Patagonia (Clothing) Adjusted its organizational structure to centralize sustainability in every business function, resulting in a company culture focused on environmental awareness and responsibility. This strategic focus has made Patagonia a pioneer in sustainable clothing.??
? ING Group (Bank) Redesigned its organizational structure to be more customer-centric by breaking down traditional banking departments and reorganizing around customer needs. This restructuring has led to increased customer satisfaction and a stronger position in digital banking services.
? Zara (Retail) Reduced hierarchy within the company to create a flat structure that promotes quick communication and decision-making. This organizational adjustment allows Zara to respond swiftly to market trends and maintain its leadership in the fast fashion industry.?
“An organizational structure is like the foundation of a building. If it's not solid and well-constructed, everything built on top will be unstable and can easily collapse”?
Visit our website: www.kookooventures.com ?
If you would like to expand to expand your context about organizational structures and other business cases, here is a few of my videos:?
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