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Businesses Must Realign to Cope with Change
25-Feb-05 [ by Larry Chao ] 12022 Read and 4995 Comment

Business success in the years to come will depend on how well organizations breakdown functional barriers and realign their resources with constantly shifting strategic priorities‚ writes Larry Chao.

For businesses in Asia‚ 2003 portends another years of business uncertainty. The unpredictable gyrations of local and global economies‚ disrupting technologies and intensifying competition wreck havoc on even the best-laid corporate plans. To cope with change‚ chief executives must concentrate on keeping their organizations aligned and focused on strategic priorities by tearing down functional barriers.

"Teamwork and cooperation across functions is so critical‚" says Khun Supachai Chearavanont‚ chief executive of Telecom Asia. "Even with strategies and projects in place‚ the challenge is to align and energize people to work together and execute for results."

Never before has the need to break down functional barriers and align resources been greater. Moreover‚ because business conditions change frequently and rapidly‚ alignment is an ongoing process‚ rather than a once-off event normally associated with annual strategic planning.

"Success is all about harmonious execution between functions and an organization's ability to make important decisions without the CEO being involved all the time‚" continues Khun Supachai.

This is especially true in the fast-paced telecommunications sector‚ where change is rampant and companies feast or famine based on their ability to capitalize on winning technologies. The need for decisiveness and coordinated action is critical.

But continuous realignment represents a break from the past‚ when behemoth organizations grew successfully by building functional empires designed to minimize change and harvest stable markets. In this environment‚ functional priorities took precedence over company-wide priorities. More energy was spent figuring out how to win internal "turf" battles with other functions‚ rather than battles for market share.

Despite this shortcoming‚ this organization design model worked because the marketplace was predictable and competition less intense. Everyone knew their roles. Multiple management layers served as checks to prevent deviations from standard operating procedures. The result was tightly controlled operations and straight-line growth. Organizations became resistant to change.

For example‚ big corporations such as Unilever Thailand derived their strength not only from their brands‚ capabilities and people‚ but also from their sheer size and ability to bring vast resources to bear to ensure continuous market dominance.

Today‚ however‚ the game has changed. Big corporations can utilize their scale only if they are able to realign their resources to address changes in the marketplace faster than agile competitors. Functional focus must be balanced by a more general management perspective‚ supported by interdisciplinary teamwork and performance management and compensation systems that measure and reward overall company performance. Most importantly‚ an effective process for setting and assessing alignment with strategy and progress of business results needs to be institutionalized.

But where do you begin? How do you know whether effective alignment is an issue compromising business performance? The most common symptoms are too much talking too little action‚ delays in progress‚ and underachieving on results.

The first step might be to assess how "ready" is your organization to realign and manage change. Take this test: Ask your senior management team to list down their top eight functional business priorities. If there are major differences between functional heads with respect to cross-functional projects driving change‚ then the chances of strong alignment and successful organization change are limited.

What about your organization's track record in completing change projects‚ such as introducing new innovations into the marketplace or re-engineering operations to enhance customer service? Do these projects achieve desired results on time? Continuous delay or chronic failure to complete these projects suggests weak change readiness.

Savvy executives view strategic planning as an ongoing event and link it with continuous alignment and realignment. They are obsessed with teamwork and put systems in place to make sure that effective teamwork is achieved and rewarded.

"It is our objective to make sure there is strong cooperation across departments and that everyone has the same target‚" says Khun Supachai. "That is the only way for us to change successfully and compete in today's fast-paced business environment."

Larry Chao is managing director for Chao Group Limited‚ a strategic change management and training consultancy based in Bangkok (larry@chaogroup.com)


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