Strategic IQ: Creating Smarter Corporations

2.1

THE NEED FOR SMART STRUCTURE

To execute a strategy effectively, a firm needs the right structure.¹ And if a firm wants to change its strategy, then it must be able to adjust its structure to match. But this is not easy. Executives commonly complain that it is not so much a shortage of new strategies that leaves them vulnerable to competitive attack, but inflexible structure. Thinking up new ideas is easy; turning them into action is much harder. Structure demonstrates a lot of inertia.

While some theorists argue that a firm must decide its strategy first and then develop a structure to support it, practitioners are more aware of the time, money and effort required to effect structural change.² Large organizations are enormously complex;