Organisational Strategy Formulation – A Territorial Tale

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Customers had consistently complained about the difficulty of penetrating the organisation to get things done. Account managers were responsible to customers for these multi-million dollar technology service businesses, even though they did not control delivery. They confirmed that the they just did not have the authority to get problems solved.

The company had long had a powerful business operations unit controlling delivery that was able to tell account teams what they would and would not deliver, based on their own priorities. They were even in a position to determine which capital programs to promote and which to condemn, using internal costing arguments.

Operations was structured along functional and technical competence lines. When the complaints became irritating Operations appointed ‘account managers’ who were to liaise with the client-facing account teams, but their careers were based in Operations. Arguments that Operations were not client-focused were now rejected; they had account managers liaising with their ‘internal customers’.

Several attempts were made at ‘reinventing ‘ the (customer) account manager’s role and responsibilities. The result was that a few exceptional account managers had a greater success rate, but at the expense of other accounts. Good account managers failed and left.

Eventually a strategic workshop became the place for a showdown between customer accounts and operations. The accounts teams’ leader battled with the operations leader and other leaders took sides.

The workshop laid out various organisational options, the most popular one was to restructure operations along lines of business instead of functions, the lines of business would deliver according to the accounts’ ‘orders’. The horse would be put before the cart, operations would respond to the customers’ needs and the operational leaders would be measured on customer delivery metrics, not just on technical delivery metrics.

It took the departure of an operations leader to enable this strategy to be approved and the change program to be resourced.

The Organisational Realignment change program that followed is another story but implementation of this strategy greatly improved resposiveness to customer needs.

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