Strategic Planning: What Is Organizational Capital? - dummies

Strategic Planning: What Is Organizational Capital?

By Erica Olsen

In the strategic planning process, the second phase in the assessment of your company’s capabilities is reviewing its organizational capital. Now that you have people on board and in the right jobs, answer the following questions:

  • How is your work environment?

  • Do you and your employees like coming to work?

  • Does everyone get along?

  • Who’s running the show?

  • What’s your organizational culture like?

Organizations are made up of people, and the people determine what goes on at work. At the end of the day, every person is responsible for how the work gets done and how the organization functions.

Structure, teamwork, management, and leadership dictate how it feels to work in your business environment. Evaluate your organizational capital by looking at the following areas:

  • Structure: Structure does serve a purpose — to have an efficient flow of information for action and decision making. Normally, organizational charts look like a bunch of departments cobbled together because businesses grow and morph over time. Is your organization structured to allow everyone to operate effectively? How many signatures do you need to get approval?

  • Leadership: Leadership is the art of getting people to do what you want because they want to. Leadership comes in many styles, but the end result is the same. Leaders are responsible for setting the vision and the strategy. How’s your leadership?

  • Management: Managers are responsible for making sure that the work gets done and that employees are performing at their peak level. In your company, the lines between leaders and managers may be blurred. Your leaders may be managers, and your managers may be leaders. Either way, both are just as important in keeping your SUV moving down the road. Is your management team successfully getting the work done and helping your employees achieve their fullest potential?

  • Teamwork: How do you build a great team? Numerous theories exist that can easily fill the rest of this book. But nothing gets done in business, except maybe answering the phone, without teamwork. For your evaluation, ask yourself whether the whole is greater than the sum of the parts. Are your people achieving more together than apart?

Each of these areas has industries built around it. If you’re looking to dig in to improving one or more of them, look to an outside consulting firm or training course that focuses on the discipline specifically.

Patagonia — an environmentally-conscious, highly innovative outdoor clothing company — is notorious for its enviable culture. Under founder Yvon Chouinard’s leadership, the company has reached $240 million in annual sales. The business continues to maintain a complete and total commitment to environmentalism as well as blending work and play.

At times, profitability takes a lower priority than upholding the corporate values. The corporate culture emanates from the top through Chouinard’s philosophy and leadership style. His thoughts are consistently supported by managers, teams, employee internship programs, and the company’s lack of cubicles. Surfing at lunchtime or taking major customers skiing is part of Patagonia’s business and its culture.