STRATEGIC IMPLEMENTATION
Short term objectives and action
plans guide implementation by converting long term objectives into short term
actions and targets. Functional tactics whether done internally or
outsourced to other partners , translate the business strategy into activities that
build advantage.
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.
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
Main Steps to successful strategy implementation.
1.
Align your initiatives
A new strategy means new
priorities and new activities across the organization. Every activity (other
than the most functional) must be reviewed against its relevance to the new
strategy. A good way of doing this is to create a strategic value measurement
tool for existing and new initiatives. Initiatives should be analyzed against
their strategic value and the impact to the organization.
2.
Align budgets & performance
Ideally your capital budgets are
decentralized, so each division can both allocate and manage the budgets to
deliver the division’s strategic initiatives Organizational performance should
be closely aligned to strategy. Performance measures should be placed
against strategic goals across the organization and each division and staff
member. All staff will have job functions that will impact on strategy. Most
staff will have impact across a series of strategic goals (eg. financial,
customer service, product). Ensure employees are aware of their role and
influence on strategy delivery and performance. This is also important to
employee engagement
3.
Structure follows strategy
A transformational strategy may
require a transformation to structure. Does the structure of your organization
allow strategy to cascade across and down the organization in a way that
meaningfully and efficiently delivers the strategy?
4.
Engaging Staff
The key reason strategy
execution fails is because the organization doesn’t get behind it. If you’re
staff and critical stakeholders don’t understand the strategy and fail to
engage, then the strategy has failed.
How to engage staff
·
Prepare: Strategy
involves change. Change is difficult and human tendency is to resist it. So not
matter how enlightened and inspiring your new strategic vision, it will come up
against hurdles. Those hurdles are cognitive, resource, motivation and
political hurdles. It is important we understand each of these hurdles and
develop strategies to overcome them.
·
Include: Bring influential
employees, not just executive team members into the planning process. Not only
will they contribute meaningfully to strategy, they will also be critical in
ensuring the organization engages with the strategy. Furthermore, listen across
the organization during strategy formulation.
·
Communicate: Ensure every staff
member understands the strategic vision, the strategic themes and what their
role will be in delivering the strategic vision. Communicate the
strategy through a combination of presentations, workshops, meetings,
newsletters, intranets and updates. Continue strategy and performance updates
throughout the year.
·
Clarify: It is important that
all employees are aware of expectations. How are they expected to change? What
and how are they expected to deliver? Each individual must understand their
functions within the strategy, the expected outcomes and how they will be
measured.
5. Monitor and Adapt
A strategy must be a living,
breathing document. As we all know: if there’s one constant in business these
days it’s change. So our strategies must be adaptable and flexible so they can
respond to changes in both our internal and external environments. Strategy
meetings should be held regularly throughout the year, where initiatives and
direction are assessed for performance and strategic relevance. At least once a
year we should put our strategy under full review to check it against changes
in our external and competitive environments as well as our internal
environments.
Strategy is not just a document
written by executive teams and filed in the CEO’s desk. It is a vision for the
organisation, owned by the organisation. And to succeed the whole organisation
must engage with it and live and breathe it. Strategy should inform our
operations, our structure, and how we go about doing what we do. It should be
the pillar against which we assess our priorities, our actions and performance.
Strategies
Fail Because of the following
- Lack of
ownership: The most common reason a plan
fails is lack of ownership. If people don’t have a stake and
responsibility in the plan, it’ll be business as usual for all but a
frustrated few.
- Lack of
communication: The plan doesn’t get
communicated to employees, and they don’t understand how they contribute.
- Getting
mired in the day-to-day: Owners and
managers, consumed by daily operating problems, lose sight of long-term
goals. _ Out of the ordinary: The plan is treated as something separate
and removed from the management process.
- An
overwhelming plan: The goals and
actions generated in the strategic planning session are too numerous
because the team failed to make tough choices to eliminate non-critical
actions. Employees don’t know where to begin.
- A
meaningless plan: The vision, mission, and
value statements are viewed as fluff and not supported by actions or don’t
have employee buy-in.
- Annual
strategy: Strategy is only discussed at
yearly weekend retreats. _ Not considering implementation:
Implementation isn’t discussed in the strategic planning process. The
planning document is seen as an end in itself.
- No
progress report: There’s no method to track
progress, and the plan only measures what’s easy, not what’s important. No
one feels any forward momentum.
- No
accountability: Accountability and high
visibility help drive change. This means that each measure,
objective, data source, and initiative must have an owner.
- Lack of
empowerment: Although accountability may
provide strong motivation for improving performance, employees must also
have the authority, responsibility, and tools necessary to impact relevant
measures. Otherwise, they may resist involvement and
ownership. It’s easier to avoid pitfalls when they’re clearly
identified. Now that you know what they are, you’re more likely to jump
right over them!
key components necessary to support implementation
People- The first stage of implementing
your plan is to make sure to have the right people on board. The right people
include those folks with required competencies and skills that are needed to
support the plan. In the months following the planning process, expand employee
skills through training, recruitment, or new hires to include new competencies
required by the strategic plan.
Resources- You need to have
sufficient funds and enough time to support implementation. Often, true
costs are underestimated or not identified. True costs can include a realistic
time commitment from staff to achieve a goal, a clear identification of
expenses associated with a tactic, or unexpected cost overruns by a vendor.
Additionally, employees must have enough time to implement what may be
additional activities that they aren’t currently performing.
Structure- Set your structure of
management and appropriate lines of authority, and have clear, open lines of
communication with your employees. A plan owner and regular strategy meetings
are the two easiest ways to put a structure in place. Meetings to review the
progress should be scheduled monthly or quarterly, depending on the level of
activity and time frame of the plan.
Systems- Both management and technology
systems help track the progress of the plan and make it faster to adapt to
changes. As part of the system, build milestones into the plan that must be
achieved within a specific time frame. A scorecard is one tool used by many
organizations that incorporates progress tracking and milestones. See the
section “Keeping Score of Your Progress” later in this chapter for info on how
to create a scorecard for your company.
Culture- Create an environment that
connects employees to the organization’s mission and that makes them feel comfortable.
To reinforce the importance of focusing on strategy and vision, reward success.
Develop some creative positive and negative consequences for achieving or not
achieving the strategy. The rewards may be big or small, as long as they
lift the strategy above the day-to-day so people make it a priority.
MATCHING
ORGANIZATIONAL STRUCTURE TO STRATEGY
An organizational structure
defines how your business will function. The structure you choose to implement
in your business will dictate how employees, departments, and divisions work or
work with each other, and how work will be channeled through your organization.
Because certain organizational structures work better than others when applied
to different organizations, it is very important to consider how well the
structure you select will work in your type of company.
Steps in Matching Organizational structure to Strategy
Review the different organizational structures most commonly used: Understand
that a functional structure organizes workers by the job performed, a
divisional structure is organized by product or service produced, and a matrix
structure is a combination of the two.
Review your business size: Because few businesses that employ less
than 12 to 15 employees have the manpower to implement the divisional or matrix
structure, it is likely that a firm of this size will need to implement a
functional structure. Recognize, however, if you intend your company to grow
rapidly and recruit heavily that you may begin with a functional structure and
plan for an evolution into one of the other structures as they become more
appropriate.
Analyze the organizational structures of your competitors: See if
there are any variations in the structures they use and if those differences
attribute to comparable business success. Research each company’s history to
see if there have been any deviations from their current structure, and what
were the reasons and the impacts of the changes in structure.
Identify the standard structure used throughout your industry: See
if there are any significant reasons why that structure is the best for your
particular product or service. Recognize, for example, if the markets your
industry serves are typically located in different regions, then a divisional
structure may be more appropriate than any other. Identify how your industry
typically locates its work groups, such as an import businesses based at
international ports. This could indicate whether your business type can support
a decentralized divisional structure or a more centralized functional one.
Review
the costs of maintaining the different organizational structures: Maintaining
a divisional structure requires that each division operates as an independent
business unit and cost center resulting in higher operational costs compared to
a centralized functional structure. Recognize that the matrix structure creates
redundancies by incorporating elements of both functional and divisional
structures, so operational costs are even higher than the other two.
Weigh the benefits that each structure can bring to your organization:
Know that although the divisional
structure offers more flexibility than the functional structure, it does not
offer the level of operational control, and the matrix offers the benefits of
both. Identify if the implementation of one of the three structures will offer
any significant advantage that will make your company more competitive in the
market.
Differences between Strategy
Formulation and Strategy Implementation-
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Strategy Formulation
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Strategy Implementation
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Strategy Formulation includes
planning and decision-making involved in developing organization’s strategic
goals and plans.
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Strategy Implementation involves
all those means related to executing the strategic plans.
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In short, Strategy Formulation is placing
the Forces before the action.
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In short, Strategy Implementation
is managing forces during the action.
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Strategy Formulation is an Entrepreneurial
Activity based on strategic decision-making.
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Strategic Implementation is mainly
an Administrative Task based on strategic and operational decisions.
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Strategy Formulation emphasizes on
effectiveness.
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Strategy Implementation emphasizes
on efficiency.
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Strategy Formulation is a rational
process.
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Strategy Implementation is
basically an operational process.
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Strategy Formulation requires
co-ordination among few individuals.
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Strategy Implementation requires
co-ordination among many individuals.
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Strategy Formulation requires a
great deal of initiative and logical skills.
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Strategy Implementation requires specific
motivational and leadership traits.
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Strategic Formulation precedes
Strategy Implementation.
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STrategy Implementation follows
Strategy Formulation.
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