The new functional agenda

What should corporate functions do? Until recently, the answer was relatively straightforward. Functions existed to develop the expertise to carry out the many specialized tasks that every corporation needs, in marketing, human resources management, IT, and so on. Over the past several years, however, CEOs, business unit leaders, and functional leaders themselves have been raising expectations: How can functions play a more strategic role? How can they deliver more value to the organization at large? How can they earn "a seat at the table"?

These rising demands provide functional leaders and staff with a golden opportunity. Instead of striving to be "best in class" in everything they do, they can become "fit for purpose" by focusing on activities that are strategically important to the enterprise and that help drive its distinctive value proposition.

The new functional agenda can help functions take on this more strategic role while still fulfilling their day-to-day transactional and expertise tasks. It is made up of three interconnected elements:

  • establishing priorities in line with the company’s overall strategy and its differentiating capabilities
  • aligning the operating model to deliver value in line with those critical priorities
  • allocating resources accordingly.

For functional leaders, this new agenda requires real understanding of the company’s strategy, deep comprehension of functional capabilities and the ability to match them to the strategy, and an even higher level of interpersonal skill to work across the organization. This approach can be a primary source of success not just for the function, but for the enterprise as a whole.

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Find out how functions like HR, IT, and finance can balance a new strategic role while still managing their own house.


Key publications

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There is a golden opportunity today for the leaders of HR, IT, finance, operations, R&D, marketing, sales, sourcing, and other corporate functions and shared services.
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Conventional organizational structures may be obsolete. How about a model based on capabilities instead?
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Strategy& has developed a profiler that lets compa­nies test the coherence of their supply chain capabilities against their defined "way to play" to ensure sufficient align­ment for premium returns.
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This Perspective lays out a three-step process that can help IT leaders become critical partners to the rest of the enterprise in building capabilities.


Further publications