The distance between business strategy and organizational design is eighteen inches
Tolstoy was right: every unhappy family is unhappy in its own way, but all happy families – or happy firms – are alike.
Compare Patagonia and Whole Foods.
The former, a $600M outdoor-clothing brand based in Ventura, California, while the latter, a $12B supermarket chain headquartered in Austin, Texas.
Two different markets. Two different missions. One simple lesson on how to be an innovative company: align business strategy with organizational design.
At a risk of $20M in sales, Patagonia made a commitment to exclusively use organic cotton. And in all aspects of its operations, Patagonia accepted challenges: fostering business relationships with suppliers and distributors to ensure quality; revitalizing a brand message around sustainable sourcing; and, cultivating collaboration among product designers to envision new products.
In the course of 18 months, Patagonia moved beyond the market trend of investing in isolated environmental and social improvements and became an organization that places conscious living at its core.
At Whole Foods, innovation is not the selling of natural and fresh products; innovation is the method by which stores operate. A tribal community is the big idea.
Each store is comprised of an average of 10 autonomous teams that interlock at points of leadership. Teams choose their teammates, their bosses, and the selection of foods they will stock. The result is a network of uniquely localized stores with employees who are committed to serving the customer and empowered to experiment with a variety of revenue streams.
While most companies have the ingredients of innovation - visionary leadership, customer centricity, and a thriving company culture - what sets happy firms apart is their ability to align the eighteen inches between their mind (business strategy) and their heart (organizational design).
Like Patagonia and Whole Foods, companies that follow this lesson are not only endearing, but also enduring.
© 2015 Dashell Laryea, or whomever made the things I didn’t make.