Feb10
Organizations often struggle with aligning their structure and behaviour with strategic objectives, leading to underperformance and, in some cases, failure. One major obstacle to organizational alignment is "organizational silence"—the reluctance of employees and stakeholders to communicate the unvarnished truth to senior management due to fear of negative repercussions. The Strategic Fitness Process (SFP), developed by Michael Beer, offers a structured approach to overcoming these challenges by fostering open dialogue and continuous learning.
This article delves into the Strategic Fitness Process, its implementation, and its impact on organizational effectiveness. It uses a case study of Hewlett-Packard’s Santa Rosa Systems Division (SRSD) to illustrate its practical application.
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A well-aligned organization requires a cohesive fit between its structure, leadership, business processes, culture, and people. However, many organizations fail to adjust their design and operations to fit evolving strategies and competitive conditions. Research shows that one of the primary reasons for this failure is the absence of honest, upward feedback, which prevents senior leaders from diagnosing and addressing misalignments before they escalate into crises.
Without a continuous learning process, organizations rely on external consultants who conduct isolated interviews and offer recommendations. While theoretically sound, this approach often fails due to a lack of internal commitment from leadership and employees. Instead, organizations require a dynamic and participatory method that involves all key stakeholders in shaping and implementing strategic change.
The Strategic Fitness Process (SFP) is a collaborative action research method that enables organizations to identify barriers to effectiveness, foster transparent conversations, and redesign structures to align with strategic objectives. The process unfolds in nine structured steps:
Senior leaders define the organization’s competitive strategy, capabilities, and cultural values. In the case of HP’s SRSD, the leadership team recognized the need for an ambidextrous strategy—balancing short-term profitability with long-term innovation.
A select group of high-performing employees, one or two levels below the senior team, is trained in data collection and analysis. This task force is responsible for gathering insights from employees across all levels of the organization.
The task force conducts structured interviews with approximately 100 employees and external stakeholders, focusing on three key questions:
The task force presents its findings in a “fishbowl” discussion, where senior leaders listen without interrupting or defending themselves. This step ensures that organizational silence is broken and leaders receive unfiltered employee insights.
Senior leaders, guided by consultants, analyze the feedback. Commonly identified barriers include:
With expert guidance, the leadership team develops a new organizational structure to address identified issues. HP’s SRSD adopted a matrix structure, enabling better coordination and resource allocation.
The task force reviews and critiques the proposed changes, ensuring that employee perspectives are incorporated into the final design.
The senior team revises the redesign based on feedback, enhancing the feasibility and acceptance of the new structure.
The final plan is communicated to all employees, and a structured implementation begins. HP’s SRSD institutionalized SFP as an annual practice, ensuring continuous adaptation and refinement.
HP’s SRSD, established in 1992, faced declining revenue and internal conflicts due to poor cross-functional coordination. Recognizing the urgency of change, the division’s leadership adopted SFP to identify root causes and realign the organization. The process revealed six key barriers, including unclear strategic direction and low employee trust. Implementing a matrix structure and a revamped strategic management process led to significant performance improvements. By institutionalizing SFP, SRSD cultivated a culture of continuous learning, ensuring sustained organizational effectiveness.
Beyond problem-solving, SFP is a research tool for developing organizational prototypes—experimental structures designed to improve strategic alignment. By applying SFP across diverse industries, scholars and practitioners can refine organizational designs based on empirical evidence rather than conjecture.
Additionally, SFP contributes to the development of dynamic capabilities—the ability of an organization to adapt and evolve in response to environmental changes. As organizations implement SFP iteratively, they foster a culture of adaptability, reducing the need for disruptive, large-scale transformations.
The Strategic Fitness Process offers a powerful mechanism for breaking organizational silence, fostering collaboration, and continuously refining organizational structures to align with strategic objectives. By integrating SFP into regular business processes, organizations can transform into learning organizations capable of sustained innovation and resilience.
As demonstrated by HP’s SRSD, SFP is more than a one-time intervention—it is a leadership philosophy that empowers organizations to anticipate challenges, experiment with new structures, and cultivate a workforce committed to strategic excellence. By embracing this approach, organizations can unlock sustainable competitive advantage, ensuring long-term success in an ever-evolving business landscape.
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By Andrew Constable MBA, XPP, BSMP
Keywords: Business Strategy, Innovation, Leadership
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