What’s first? Org Strat or Tech Strat?

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I’ve been talking recently with a couple of colleagues about the logical flow of strategy within large organizations. Our clients often have multiple strategic challenges to address, particularly when they have just brought on a new leader, merged or divested their organizations, or gone through other broader company changes that require a transformation of the technology group. Two big strategic needs tend to emerge: one around designing the right organization and the other around developing the right technology architecture. People who believe, as we do, that strategy projects must be limited to a few months, may be faced with a dilemma on which challenge to tackle first.

(By the way, this dilemma is really only relevant to large technology organizations, those with hundreds or thousands of employees. Small organizations can and should cover all these topics in an integrated strategy over a couple of months.)

So where should you start? With the organizational strategy or the technology strategy? Both strategies begin with the same step, assessing the business’s needs for technology. But then, the organizational strategy dives deep to understand the current organizational design, its capabilities, and its performance model while the technology strategy dives deep into identifying and assessing the different layers of technology architecture. When defining the future state and implementation plan, though, both lead back to the other. A technology strategy, both its design of its future state and its implementation plan for transitioning to that future state, is heavily limited or enabled by the organization driving it. A technology strategy that ignores the organization supporting it is likely to be impractical and end up on the shelf. An organizational strategy is often defined by the current state and planned direction of its technology architecture. Plans for existing or new technologies may affect which groups can be outsourced or how development groups should be aligned.

Even within our company, we have a variety of opinions on the right ordering of strategy and honestly, I could pretty easily debate technology or organization strategy as the best starting point. But overall, without considering specific nuances of a given situation, I believe in starting with organization. Here’s why:

  1. You get payback sooner. You can design, plan and rollout a new organization in a few months, whereas designing, planning and rolling out a new architecture takes years.
  2. The technology strategy cannot be executed without strong structures and capabilities. It is likely to end on the shelf.
  3. Getting the right people into right roles builds towards a high performing organization that will make better technology decisions on an ongoing basis versus on a follow-the-architecture basis.

Of course, neither the technology strategy nor the organizational strategy will define a perfect end state. Nirvana will never be reached; both strategies will need to evolve interactively over the years. The organization will likely need to be reassessed once the technology architecture has shifted. Both will need to shift with broader business changes. Everything is linked. So we must pick a starting point, focus and make progress, and then pick the next highest impact area, focus and make progress and so on, always keeping in mind the significant interdependencies of the broader system.

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