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The Star Model, developed by organizational design expert Jay Galbraith, is a powerful framework for aligning your business strategy with your organizational operations. Implementing the Star Model involves analyzing and connecting five key components of your business – strategy, structure, processes, rewards, and people.
When these elements are aligned and working in harmony, you create an organization that can successfully execute its strategic vision. Misalignment leads to wasted resources and missed opportunities
Here are the steps to implement the Star Model in your business:
Create a Star Model Graph
The first step is to draw the five points of the star on a whiteboard or large sheet of paper, Place your core business strategy or value proposition in the center, This represents the gravitational force holding the elements together,
Start with Strategy
Begin your analysis with strategy, as this informs decisions about the other four points. Clarify your vision, mission, values, goals, and objectives. Ask:
- What is our long-term strategic direction?
- What goals are we trying to achieve?
- What trade-offs or choices does our strategy require?
Document the key strategic priorities on the strategy point of the star.
Move on to Structure
Next, examine your organizational structure – the specialized roles, hierarchy, and departmental groupings Ask
- What types of skills and roles does our strategy require?
- How should departments and teams be formed to support our strategy?
- What is the optimal workflow and placement of decision-making power?
Note the key structural implications of your strategy on the structure point.
Write Down Company Processes
Processes refer to your workflows, procedures, and systems for getting work done. Ask:
- What processes are needed to support our strategy?
- How should information and decisions flow between departments?
- What processes need to be redesigned or optimized?
Document important processes on the corresponding point of the star.
Write Down Company Rewards
The rewards system encompasses compensation, promotions, and incentives. Consider:
- What behaviors and outcomes should we reward to drive our strategic priorities?
- How can incentives be aligned with our goals and values?
- What changes should we make to our bonus structure or performance reviews?
Note key elements of your rewards system on the star.
Consider How People Relate to the Company
The people point includes policies for hiring, training, developing, and retaining talent. Ask:
- What talent requirements does our strategy have?
- How can we attract and retain suitable employees?
- What training or development is needed to build critical capabilities?
Document important people factors on the final point.
Share this Information with Employees
Once complete, share the Star Model analysis with managers and employees. Explain how each element reinforces the others in supporting your strategy. This builds understanding of “the bigger picture” beyond individual roles.
Revisit the Star Model as Your Business Changes
The Star Model is not a one-time exercise. Revisit it regularly to realign your organization with evolving strategic needs. Hold quarterly or annual strategy reviews to update the model.
Also re-examine the model when processes, capabilities, or corporate culture seem misaligned. Identify where adjustments may be needed across the five points to get back into balance.
Benefits of Implementing the Star Model
Deploying the Star Model brings many advantages:
Clarifies strategy – The process of creating the model builds understanding of strategic objectives across the organization.
Aligns operations – Connecting the elements visually shows how each supports the strategy.
Identifies gaps – The model reveals areas of misalignment to address.
Enables change – It provides a framework to redesign organizational elements.
Improves execution – Alignment between strategy and operations leads to better execution.
Boosts innovation – A balanced organization is more agile and adaptive.
Engages employees – Involving teams in the model builds buy-in for strategy.
Overcoming Challenges
Implementing a Star Model successfully requires overcoming some common challenges:
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Narrow thinking – People focus just on their job versus the broader strategy. Combat this by explaining how every role contributes.
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Silo mentality – Departments can prioritize their needs above the organization’s. Foster collaboration and shared goals.
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Complacency – People often resist change. Communicate the benefits of realignment.
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Short-term thinking – Some focus only on immediate needs, not long-term strategy. Tie everyday work to strategic vision.
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Analysis paralysis – Don’t get bogged down striving for the perfect model. It will evolve over time. Move forward with an adequate first version.
Key Takeaways
The Star Model is a powerful technique for creating a highly effective organization tailored to your strategy and business model. By methodically examining and connecting the five points, you can build an integrated organization focused on your most critical strategic objectives.
Implementing the model does take commitment and perseverance. But the long-term rewards of disciplined execution and competitive agility are well worth the investment. Use the Star Model to align your operations to strategy and propel your organization to new heights of performance.
The Star Model of Organizational Alignment
A business owner from the state of Washington called me the other day to discuss her company’s strategic plan. Beyond the standard SWOT analysis, assumptions, KPIs, budget forecasts, and timeframes, I asked the owner if her company was efficiently aligned. With that extended pause as a backdrop, I introduced the Star Model of Alignment (Galbraith, 1977) to her. Based simply on its self-evident configuration, the Star Model depicts the salient inter-relationships of the five integral organizational components.
Strategy: Strategy is the starting point of the Star Model, representing the company’s direction, goals, and key performance indicators. These numerical standards define “what” the company hopes to achieve, and as such, embody the essence to which other organizational components seek to be aligned. For example, as part of its new strategic plan, a landscaping company may decide to increase its Design-Build revenue by 20%, launch a new automated mowing service with a revenue goal of $25,000 per month, or improve its percentage of YELP ratings above 4.5 (out of 5) to 90%.
Structure: Structure identifies “which positions” on the organizational chart are expected to achieve the strategic goals. This feature refers to: specialization (i.e., skill set and staff size), organizational shape (i.e., tall or flat), distribution of power (i.e., centralization or decentralization), and departmentalization (i.e., newly formed or consolidated). For example, given the strategic goal of increasing irrigation revenue by 50%, an aligned organizational chart would likely add an Irrigation Manager and three new Irrigators.
Processes: Processes define information flow and decisions necessary for the structure to achieve the strategic goals. This component represents “how” the goals will be attained and may take the form of budgeting and planning (i.e., vertical information), and/or inter-departmental collaboration or workflow design (i.e., horizontal information). For example, to achieve the strategic goal of improving customer satisfaction scores by 10%, a company would design and implement a new work-order standard operating procedure (SOP) intent on improving timeliness and quality, and minimizing bureaucracy and cost.
Rewards: Reward systems must align with the previous components in that they determine “how well” the processes must be performed to achieve the strategic goals. To be effective, the reward systems must verify congruence between the individual’s personal goals and the company’s strategic goals. For example, a landscaping company that has a strategic goal of 95% annual contract renewal, should have a lucrative Field Operations Bonus Program of up to 15% salary potential, capable of motivating and reinforcing those employees to attain the stated performance expectation.
People: The People element of the Star Model identifies “who” is accountable for fulfilling the company’s strategic direction. These individuals, and their respective skill sets which must be aligned with the organization’s goals, need to be enveloped in a proper context inclusive of: recruitment, training and developing, and retention. For example, an organization with the goal of increasing the market share of its Tree Division by 25% in the local area over the next year, could begin hiring more Certified Arborists, as well as begin paying the related training costs for current employees to gain their own Certified Arborist credential.
In general terms, alignment is critical to effective organizational design and efficiency. Unfortunately, many companies talk more about alignment in a colloquial fashion, instead of understanding its intended competitive advantage. In that same breath, most organizations tend to focus inordinate attention on Structure and not enough on Processes and Rewards, thereby creating misalignment. Likewise, many companies fail to see the significant impact that organizational policies, culture, and communication can have on alignment effectiveness.
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Star Model in Organization Design Overview
FAQ
What is the star model strategy implementation?
What is the star strategy of a business?
What is the stars model in business?
What are the five components of the star model?
How to implement a star model for your business?
Here are the steps that you can follow to implement the star model for your business: 1. Create a strategy Successful implementation of the star model begins with creating a proper strategy. Strategy defines the plans a company has to achieve a goal, along with its values and mission.
How do you create a star model?
Create a Star Model graph. … Start with strategy. … Move on to the structure. … Write down the company processes. … Write down the company rewards. … Consider how people relate to the company. … Share this information with all employees. … Re-visit the Star Model as your business changes.
What is the purpose of a star model?
The purpose of the star is to demonstrate visually that each component relies on the others to meet the overall goals and strategies of the business. Some refer to t his model as the Galbraith Star Model, which gives credit to its founder, Jay Galbraith, a recognized international expert on strategy and organizational design.
How does a star model help a company meet its goals?
Helps a company meet its goals: The Star Model encourages companies to evaluate their goals and what resources they need to accomplish them. This creates a plan that informs them of the specific actions they need to take to meet their goals and to evaluate how certain processes may affect others, impacting their achievement of other goals.
