{"id":4696,"date":"2019-04-23T06:36:22","date_gmt":"2019-04-23T11:36:22","guid":{"rendered":"http:\/\/flevy.com\/blog\/?p=4696"},"modified":"2020-12-20T22:24:04","modified_gmt":"2020-12-21T03:24:04","slug":"when-demand-for-added-value-from-strategic-functional-organizations-becomes-the-priority-where-are-we","status":"publish","type":"post","link":"https:\/\/flevy.com\/blog\/when-demand-for-added-value-from-strategic-functional-organizations-becomes-the-priority-where-are-we\/","title":{"rendered":"When Demand for Added Value from Strategic Functional Organizations Becomes the Priority, Where Are We?"},"content":{"rendered":"

Functional organizations are facing dramatic changes. Businesses are becoming more focused around capabilities and demand leaders of\"\" functions to play a more strategic role. With a less stable environment and more intense competition, a premium is put on agility and flexibility with an increased emphasis on performance results. In effect, functions are pressured to boost operation excellence while reducing costs.<\/p>\n

But given the day-to-day transactional needs of business and the long-range in-depth efforts to build distinctive capabilities, how can Functional Leaders take on a new strategic role.\u00a0 With this dilemma, a new functional agenda is required.<\/p>\n

The Dramatic Changes Facing Functional Organizations<\/a><\/strong><\/h2>\n

\u00a0<\/strong>Functions exist to carry out many specialized tasks that our company needs to be done.\u00a0 Human Resources<\/a> recruit employees, manage benefits transactions, and oversee the evaluation and promotion process.\u00a0 Information Technology<\/a> supports the company\u2019s computer systems.\u00a0 Finance takes charge of all processes related to accounts, debts, and taxes.<\/p>\n

On the other hand, functional roles are transactional in nature.\u00a0 They fulfill day-to-day needs, meet legal and regulatory requirements, and accommodate requests from every business unit.\u00a0 They put out the inevitable firsts that erupt when there is a conflict or urgency.<\/p>\n

When Functional Leaders are asked to improve, it is basically doing the same thing but in a more efficient way and at a greater cost saving. Functional organizations are facing dramatic changes. The past years have seen Functional Leaders shifting into playing a more strategic role. Likewise, Functional Organizations must take on a new strategic role without having functions torn into two.<\/p>\n

The Strategic Functional Organization Framework<\/strong><\/h2>\n

The Strategic Functional Organization<\/a> is anchored on a framework build upon 3 core elements.<\/p>\n

\"\"<\/a><\/p>\n

    \n
  1. Priorities.\u00a0<\/strong>The functional agenda must be clearly articulated to support the company\u2019s overall strategic mission.\u00a0 These are the priorities, roles, and activities of the organization.\u00a0 Having clear and consistent priorities will allow companies to fulfill their strategic imperatives.<\/li>\n<\/ol>\n
      \n
    1. Fit-for-Purpose Operating Model.\u00a0<\/strong>The Fit-for-Purpose Operating Model<\/a> is essential in delivering value.\u00a0 This is the company\u2019s overall blueprint that spells out how to deliver the most value to the whole organization.\u00a0 It spells out how functions will work together to ensure the delivery of the greatest value.\u00a0 It also makes sure that the functional operating model is aligned with the company\u2019s overall strategy.<\/li>\n<\/ol>\n
        \n
      1. Execution & Resources.\u00a0<\/strong>The Execution and Resources is the degree of control and the right level of resources and funding that are necessary.\u00a0 It is at this level that proper monitoring of investments is conducted to maintain the efficiency of scale.\u00a0 By setting up formal and informal processes for allocating resources, decisions are made for the whole enterprise and not within a functional silo.<\/li>\n<\/ol>\n

        Measuring Company\u2019s Capabilities<\/strong><\/h2>\n

        Every function\u2019s first priority is to support the company\u2019s efforts to build the capabilities to carry out the strategic mission.\u00a0 This lies in the heart of the value our company delivers. Defining and measuring how much value each function is delivery through activities and initiatives is essential.<\/p>\n

        Key Performance Indicators<\/a> must be used to direct Functional Leaders to ensure maximum value creation.\u00a0\u00a0 Quantifiable impact, clear drivers of value, cost-effectiveness, and market validation must be used in assessing value.<\/p>\n

        By measuring functional performance, this focuses on capabilities, resources, and execution on areas that bring the company\u2019s strategy to life.<\/p>\n

        Interested in gaining more understanding of Strategic Functional Organization<\/a>? You can learn more and download an editable PowerPoint about the\u00a0Strategic Functional Organization<\/strong> here<\/a> on the Flevy documents marketplace<\/a>.<\/p>\n

        Do You Find Value in This Framework?<\/h2>\n

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        \u2013 Omar Hern\u00e1n Montes Parra, CEO at Quantum SFE<\/p>\n<\/blockquote>\n","protected":false},"excerpt":{"rendered":"

        Functional organizations are facing dramatic changes. Businesses are becoming more focused around capabilities and demand leaders of functions to play a more strategic role. With a less stable environment and more intense competition, a premium is put on agility and flexibility with an increased emphasis on performance results. In effect, functions are pressured to boost… When Demand for Added Value from Strategic Functional Organizations Becomes the Priority, Where Are We?<\/span><\/a><\/p>\n","protected":false},"author":111,"featured_media":4697,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"neve_meta_sidebar":"","neve_meta_container":"","neve_meta_enable_content_width":"","neve_meta_content_width":0,"neve_meta_title_alignment":"","neve_meta_author_avatar":"","neve_post_elements_order":"","neve_meta_disable_header":"","neve_meta_disable_footer":"","neve_meta_disable_title":"","footnotes":""},"categories":[408,85],"tags":[1538,811,1539],"class_list":["post-4696","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-management-leadership","category-organization","tag-functional-organizations","tag-key-performance-indicators","tag-strategic-functional-organization-framework"],"_links":{"self":[{"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/posts\/4696","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/users\/111"}],"replies":[{"embeddable":true,"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/comments?post=4696"}],"version-history":[{"count":6,"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/posts\/4696\/revisions"}],"predecessor-version":[{"id":8159,"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/posts\/4696\/revisions\/8159"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/media\/4697"}],"wp:attachment":[{"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/media?parent=4696"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/categories?post=4696"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/tags?post=4696"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}