How to align structure to strategy

Build Co. Limited was established in 1980. The company deals in engineering design and consultancy services. It boasts of over 120 engineers and consultants. Initially, the company’s major sources of revenue were plan designs, bills of quantities, project supervision and document processing considering the bureaucratic nature of the government institutions prior to plan approvals. However, new reforms and economic growth has attracted new entrants to the sector.

Since November 2010, Build Company has experienced difficulties especially meeting operational costs. The clients and prospects have increasingly become price sensitive. It is now difficult to find a client willing to pay USD50,000 per project as it used to be the case in the early 1990’s when the sector was still small with few competitors. These days clients have several alternatives. And the value of a strong brand name is no longer a big differentiator. Prospects say, if one is accredited by the regulator, then they are equally good.

Generational changes and the emergence of new money turks has eroded the firm’s good will and networks. Old friendships are no longer as important as far as business acquisition is concerned.

In the past, a mere mention of the brand name Build Company Limited would easily be associated with the company’s Charismatic founder – a tall, powerful man who was known for everything Golf. Today, such association is no more. The old man and his peers went in retirement long ago. The children took over. And that was the beginning of the catch: most children who grew in money had low interest in learning how to make it. They had it in abundance. So why suffer learning the ropes of making it?

They went to great schools, yes. They travelled highly, yes. They have a strong alumni community, yes. But they did not pay attention. When they went to school, they never bothered to create intellectual firepower. They just sat in class. And because they were in international schools, they focused on ‘confidence’, ‘free speech’, etc. They forgot that their parent’s businesses were grounded in the local markets where the ‘free speech ‘, skills would appear rather odd. They argued that they have a global perspective. But lacked the skills to ‘read the room’ and ‘contextualize’. In the end, they had learnt a lot without education.

Now at the helm of the business, the challenge is how to transform the business from a loss making position to profitable one. How to reduce the staff numbers without hurting people who have for long worked with them and see their future with the company?

To be continued

http://summitcl.com/align-structure-strategy/