Organisation Shapes Strategy: Rethinking the Two-Way Relationship
On structural coupling, capability, and the real limits of choice
We often talk about strategy as if it comes first. Leaders design a strategy, and then “align” the organisation to deliver it. The familiar mantra is form follows function.
But the reality is more complex. Strategy and organisation are not linear. They are coupled.
Organisation always precedes strategy
As a good friend and co-author of Patterns of Strategy, Patrick Hoverstadt recently commented that strategy is always a product of the organisation. If the organisation lacks the information flows, decision rights, or capability to think and act strategically, then whatever strategy it produces will be weak.
Organisation does not just follow strategy. It shapes it.
The organisation you have defines the strategies you are capable of developing, let alone executing. This is not a constraint to be ignored; it is the practical reality in which leaders operate.
Two perspectives
There are two ways of looking at the relationship between organisation and strategy, and both are true.
Strategy → Organisation Strategy shapes intended behaviour. To carry out a manoeuvre, organisations often need to adapt structures, build new capabilities, enable people, and establish measures for progress and outcomes.
Organisation → Strategy Organisation is what conceives strategy in the first place. Its structures, processes, and relationships set the boundaries of what is possible. The actual strategies that emerge are a direct reflection of the organisation’s existing capabilities and couplings.
Neither perspective alone is sufficient. Strategy and organisation exist in constant interplay, each shaping and being shaped by the other.
Structural coupling
Here, the work of Humberto Maturana, the Chilean biologist and philosopher, is instructive. Maturana introduced the concept of structural coupling to describe how living systems adapt in relation to their environment. A system, through continuous interaction, does not simply impose its will on the environment. It also changes in response to what it encounters. Both evolve together in a process of mutual adjustment.
Organisations are no different. They are structurally coupled with customers, regulators, suppliers, competitors, and partners. Strategy, then, cannot be conceived as something detached. It emerges through the interplay between the organisation’s current structures and the external relationships it maintains.
This is why treating organisation and strategy separately is misleading. The organisation not only enables but also constrains strategic choices. At the same time, strategy feeds back into reshaping the organisation. It is a recursive, ongoing relationship.
What is doable?
The real question is not “what strategy do we want?” but “what strategy can we actually execute?”
Answering this requires leaders to look at the relationship between:
Requirements of strategy: stretch, rate of change, scope, manoeuvres, and novelty.
Organisational capability: performance, capacity to execute, ability to develop new capabilities, and historical change performance.
Viability lives in the balance between these two.
A bold strategy without the organisational capacity to sustain it is a fantasy. A strong organisation with no strategic manoeuvres is stagnating.
Adjusting the balance
When strategy and organisation are tightly coupled, leaders have only a few levers at their disposal.
Reduce the demand of the strategy by slowing the rate of change or adjusting the scope.
Increase organisational capability by enhancing change capacity, granting autonomy to change resources, or accelerating the change rate.
Enable more demanding strategies over time by deliberately building capacity for change.
Choose strategies that can be executed without major organisational change.
This is not about downgrading ambition. It is about matching manoeuvres with the organisation’s actual ability to carry them out. A strategy that cannot be executed is not ambitious; it is irresponsible.
Why this matters
Treating strategy and organisation as separate streams of work is one reason why so many strategies never become reality. A strategy on paper may look elegant, but if the organisation cannot conceive, adapt, or execute it, it remains theatre.
A more honest approach accepts the coupling:
Strategy is never independent of the organisation.
Organisation both enables and constrains strategy.
Leadership is the practice of working on the relationship between the two.
Seen this way, strategy is not just about where we want to go. It is about what manoeuvres are possible from here, with this organisation, and how we can build the capacity for the next move.
The structural view of leadership
If we adopt Maturana’s insight, then leadership becomes less about designing the perfect strategy and more about shaping conditions of structural coupling. Leaders must ask:
What relationships define our organisation today?
How do these relationships constrain or enable our choices?
What new couplings could open adjacent possibilities we cannot yet see?
By treating organisation and strategy as inseparable, leaders create space for more resilient and adaptive responses. Strategy becomes less about prediction and more about preparing to move with, and through, the structural couplings that shape viability.
A better question
Perhaps we should stop asking “What is our strategy?”
A better question is: “What strategies are we actually capable of, and how fast can we adapt our organisation to expand that set?”
The future will not be shaped by artefacts that sit on a shelf. It will be shaped by the lived interplay between organisation and strategy, coupled together in constant motion.
