Organization and Business, which is which and what’s important

Before we get into an in-depth discussion on the structure, team and equipment, we need to understand the difference between the Organization and the Business. Over the years, people have used the words interchangeably, and also across the private, public and non-profit sectors. Org transformation 1What we need to understand is that every business is supported by an organization. The business is outwardly focused and profit driven, making sure that our product is delivered to market in the correct quantity at the correct quality and on time. The organization on the other hand, is inwardly focused. It is a set of internal arrangements that service the business.

In terms of these definitions, the table shows where the words we use in our everyday lives fit.

Business Organization
Mission / Vision Leadership
Markets Values
Core competence Ethics
Customers Structure
Products / Services Culture
Brands Policies, Rules and procedures
Reputation Management & Supervision
Prices Staff Skills & Competencies
Margins Relationships & Communication
Competition Budgets & Targets
Stock availability (materials included) Training
Regulatory Requirements Remuneration

There is no pattern to be followed when reviewing ourselves, what is important is to understand where your efforts will generate results, and the importance of the organisational skills in supporting the business requirements. An example is Regulatory requirements, a business requirement set by outsiders which need to be achieved to stay in business. The supporting requirements, where we need to focus in order to achieve compliance are training, skills, competencies, policies, rules and procedures. If we have these in place, and the culture is one of delivery, we can be competitive in highly regulated markets. We also need to have the organization requirements in place to protect our brands and reputation and retain customers.

When we start reviewing our vision, we need to ensure that our ethics, values and culture support it at all levels within the organization, not only at a leadership level. This is where shared vision and team learning are very important. The biggest challenge for leadership is to ensure there is a balance between inward and outward focus, and that they support and benefit each other.

If you want to optimize your supply chain and operations performance and would like to chat further, please contact Dave at SA Coaching  You can also follow Dave on LinkedIn and SA Coaching to get the notification of articles as they are published.

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