Strategy Implementation - Meaning and Steps in Implementing a Strategy

Strategy implementation is the translation of chosen strategy into organizational action so as to achieve strategic goals and objectives. Strategy implementation is also defined as the manner in which an organization should develop, utilize, and amalgamate organizational structure, control systems, and culture to follow strategies that lead to competitive advantage and a better performance. Organizational structure allocates special value developing tasks and roles to the employees and states how these tasks and roles can be correlated so as maximize efficiency, quality, and customer satisfaction-the pillars of competitive advantage. But, organizational structure is not sufficient in itself to motivate the employees. An organizational control system is also required. This control system equips managers with motivational incentives for employees as well as feedback on employees and organizational performance. Organizational culture refers to the specialized collection of values, attitudes, norms and beliefs shared by organizational members and groups. Follwoing are the main steps in implementing a strategy: Developing an organization having potential of carrying out strategy successfully. Disbursement of abundant resources to strategy-essential activities. Creating strategy-encouraging policies. Employing best policies and programs for constant improvement. Linking reward structure to accomplishment of results. Making use of strategic leadership. Excellently formulated strategies will fail if they are not properly implemented. Also, it is essential to note that strategy implementation is not possible unless there is stability between strategy and each organizational dimension such as organizational structure, reward structure, resource-allocation process, etc. Strategy implementation poses a threat to many managers and employees in an organization. New power relationships are predicted and achieved. New groups (formal as well as informal) are formed whose values, attitudes, beliefs and concerns may not be known. With the change in power and status roles, the managers and employees may employ confrontation behaviour.

Strategy Execution Process

Once an organisation has decided upon a strategic direction the next stage is how to you implement the strategy? This how-to-guide walks through the main considerations that help to execute strategy effectively. Firstly you need to decide who is involved in the strategy execution process and who is ultimately responsible for making sure that the task of implementing and executing strategy goes well. Usually good strategy execution requires a team effort from the entire management team. However, ultimate responsibility belongs to the CEO. There are eight guiding principles that help to deliver on managerial components of the strategyimplementing/strategy-executing process. These are: 1. Building the organization with competencies, capabilities & resource strengths to execute the strategy 2. Marshalling sufficient money & people behind the drive for strategy execution 3. Institute policies & procedures that facilitate rather than impede strategy execution 4. Adopt best practices & push for continuous improvement in how value chain activities are performed 5. Install information & operating systems that enable staff to carry out their strategic roles well 6. Tying rewards directly to the achievement of strategic & financial targets & to good strategy execution 7. Instilling a corporate culture that promotes good strategy execution 8. Exercising strong leadership to drive execution forward, keep improving on the details of execution & achieve operating excellence as rapidly as feasible There are also three facets of building an organization capable of proficient strategy execution: 1. Staff the organization strong management team, recruit & retain the right staff members with the needed experience, technical skills & intellect 2. Building core competencies & competitive capabilities develop proficiencies in performing strategy-critical value chainactivities & updating them to match changing market conditions & customer expectations 3. Structuring the organization & work effort organizing value chain activities & business processes & deciding how much decision-making authority to push down to lower managers & staff

The final section to consider is the role of budgets and resource allocation in successfully implementing and executing strategy. Each firm has choices fund or not to fund. Managers need to ensure that the organization has enough funds to pursue the strategy & that staff have enough time to participate. Another consideration around budgets is ensuring that a companys budget is closely linked to the needs of a good strategy execution. This ensures that that staff are rewarded for the right reasons gaining results & managing the strategy implementation. Otherwise if you dont align the strategy to the rewards then the manager, staff member or team has no incentive to implement the strategy & undergo change. You can also benchmark the profitability of the implementation to ensure that margin is not eroded just to hit the outcomes for the strategy.
What Is Strategy Execution?

Strategy execution as a process. The most notable book to date on strategy execution is Execution: The Discipline of Getting Things Done, by Larry Bossidy and Ram Charan. Bossidy, a retired CEO, and Charan, a renowned management consultant, make the case for execution as a discipline or systematic way of exposing reality and acting on it. They explain that the heart of execution lies in three core processes": 1. People 2. Strategy 3. Operations

They explain the processes and descriptions managers use to successfully drive business results.

Strategy execution as a system. The information presented in Execution is certainly useful, but the authors dont fully explain how an organization can implement their three core processes to achieve strategy success. There have been significant advancements in this area since Execution was published in 2002. In 2008, Harvard Business School Professor Robert S. Kaplan and his Palladium Group colleague David P. Norton wrote The Execution Premium: Linking Strategy to Operations for Competitive Advantage. In it they present their management system, which houses six sequential stages intended to help organizations capture what they call an execution premiuma measurable increase in value derived from successful strategy execution. They outline six stages in this system: 1. Develop the strategy 2. Plan the strategy 3. Align the organization 4. Plan operations 5. Monitor and learn 6. Test and adapt

Through detailed subactivities26 in total Kaplan and Norton explain how organizations have successfully executed strategy via application of their management system.

Strategy execution as a step-by-step process. Both of the models outlined above are important and anyone serious about the practice of strategy execution should be familiar with them, but they suffer from what might be called the Goldilocks Problem. The process view doesnt contain enough detail to help managers construct the three processes within an organization (i.e., too cold). Conversely, the systems view contains so many sub steps that it can be overwhelming to managers (i.e., too hot). So, how can we find a solution that is just right"? While there is no easy answer, the best of both approaches can be synthesized into 10 steps outlined below. These steps provide both high level direction as well as the detail necessary to capture the lions share of strategy execution success. Step 1: Visualize the strategy. One of the most pressing challenges in all of strategy is simply understanding what a strategy is. An effective way to improve this understanding is to visualize the strategy via an illustration that shows both the important elements of the strategy and how each relates to one another. Frameworks such as the Strategy Map by Kaplan and Norton, the Activity Map by Michael Porter, or the Success Map by Andy Neely help in this regard. Step 2: Measure the strategy. Key elements of the visualized strategy should be assigned an easily understood performance measure. The full set of strategic performance measures can be organized into a dashboard, a Balanced Scorecard, or some other framework so the reader can determine that progress is being made toward completion of the strategy. Step 3: Report progress. In the same way that a budget is reviewed monthly to ensure financial commitments are being kept, the strategy should be reviewed regularly, but with more of an eye toward determining if the strategy is producing results, versus controlling performance. Step 4: Make decisions. Strategy execution is much like sailing a boat toward a planned destination. A defined course and a full complement of navigational charts will never eliminate the need to remain vigilant, to assess the environment, and to make corrections as conditions change. As part of the regular reporting process leaders must make ongoing strategic decisions to keep the strategy current and on course. Step 5: Identify strategy projects. Organizations may have scores, if not hundreds, of projects ongoing at any point, but they rarely have a firm grasp on the type and range of these projects. The first step in improving project-oriented strategy execution is to capture and organize all projectsstrategy projects in particularthat are underway in throughout an organization. Step 6: Align strategy projects. Once projects are captured they must then be aligned to the strategies or goals for the organization. This step entails comparing each project, either proposed or ongoing, to the strategic goals to determine if alignment exists. Only those projects that directly impact the strategy should be resourced and continued. Step 7: Manage projects. Organizations must develop a capability in project management if they are to execute strategy effectively. In some settings, projects receive very little management. In others, projects persist well beyond their scheduled completion. The full complement of

projects in any organization should be coordinated and controlled by a central project office or officer with the responsibility for monitoring both progress and performance. Step 8: Communicate strategy. It is difficult to execute strategy when the strategy itself isnt well understood, or performance relative to it is not communicated. Leaders must communicate their visualized strategy to the workforce in a way that will help them understand not only what needs to be done, but why. Step 9: Align individual roles. Employees want to know they are making a meaningful contribution to their organizations success. Its up to senior leaders to ensure that employees at all levels can articulate and evaluate their personal roles toward achievement of specific strategic goals. This is perhaps one of the most critical aspects of the execution process. Step 10: Reward performance. In strategy execution, as in any other area of management, what gets measured gets done. Taking this one step further, what get measured and rewarded gets done faster. After explaining the strategy and aligning the workforce to it, senior managers institute the incentives that drive behaviors consistent with the strategy. Strategy execution is difficult in practice for many reasons, but a key impediment to success is that many leaders dont know what strategy execution is or how they should approach it. Homegrown approaches may be incomplete if they fail to incorporate many of the basic activities highlighted above. While the 10-step approach outlined here wont guarantee strategy execution success, it will greatly improve the odds, perhaps pushing the topic down a notch on the list of CEO concerns.