Attaining Sustainable Organizational Growth and Profitability
Strategy execution is a disciplined and systematic approach to managing - directing, controlling and facilitating - the day-to-day decisions and activities undertaken at all levels in the organization involving top management through middle management, and front-line managers and workers that carryout the ongoing pursuit of a strategy and complete it. Strategy execution makes the implemented strategy work as intended, and turn implemented strategy into commercial/social success. Successful strategy execution involves the successful transformation of the organization to better position it to deliver its mission and meet the desired outcomes.
Successful strategy execution involves decisions about managing elements of the Operating Model which is concerned with how resources are organized and operated to get critical work done. Changes to certain elements of the organization's Operating Model such as governance, accountability, or culture, and in some cases overhauling the whole structure, when a company's strategy changes. These decisions about change take place within an organizational context of power, culture, leadership, and ability to manage change. This makes it more difficult for managers to control execution.
Factors Influencing Effective Strategy Execution
Execution involves more people at all levels in the organization than strategy formulation, this creates a challenge in communicating down the organization and/or across different functions relevant to the effective implementation of the strategy. The following are some of the factors that influence execution success:
All these factors are interdependent and their influences are non-deterministic; this typically, makes it very difficult for managers to comprehend the contribution of each of the factors to successful outcomes of strategy execution. Each of the factors influences execution success/failure in a different way; if an organization fails to pay proper attention to one of these factors, it can result in execution failure, therefore an organization needs a system and approach to support management of these factors and their influence on successful execution.
Why Organizations Fail at Strategy Execution
Strategy execution demands ownership at all levels of management and workers at customer touch points. People must commit to and own the process and actions to control effective execution. Strategy execution can fail - not accomplishing the desired outcomes - for myriad reasons including the inability of the organization to manage its strategy very well when faced with the following challenging situations:
These challenges - economy, competitors, the market and resource availability - are not the reasons at fault, since other businesses are able to survive, grow and thrive. The real (causal) reason can be attributed to mismanagement - inability of the business organization to manage its strategy very well. Managing strategy implementation and execution is a function of strategic management. Strategic management is one of the most vital activities since it encompasses the business organization's entire scope of strategic decision-making.
Effective Execution Management
Strategy execution management is a process of managing people, strategy and operations; Execution involves doing things (such as making decisions and directing activities) to create "fits" between the way things are done and what it takes to make the strategy work as intended. (how things should be done) within the context of the strategy implementation.
Effective strategy execution involves closing the "execution" gap - the gap between actual/current strategy performance and intended desired performance. The actual strategy realized from execution is the combination of the executed part of the intended strategy - what managers have set out in advance and intend to do - as part of some important strategic plan, and emergent strategy - the executed as-needed reactions to unanticipated developments and fresh competitive pressures. Management needs to also understand the interactions among key execution decisions and actions, and contextual forces that create significant and persistent execution gap as measured by the Operating Model.
Strategy execution involves change in people that typically takes over a long period of time, this makes it more likely that the conditions under which the strategy formulation took place will change and unforeseen circumstances may arise to derail the execution. Managing organizational change requires a system of controls - a tool designed by managers to help them monitor and evaluate the progress of activities directed towards executing the organization's implemented strategy.
An important task of managers is to design strategic control systems for successfully implementing and executing a strategy. Strategic control systems provide managers with the tools to regulate and govern their activities.
In strategic control, managers first select strategy and organization structure, and then create control systems to evaluate and monitor the progress of activities direected towards implementing and executing strategies. Finally, they adopt corrective actions through adjustments in the strategy if variations are detected.
Strategic control systems provide managers the tools to regulate and govern their activities through both proactive (feed forward) and reactive (feedback) mechanisms.
Strategic controls can be both proactive and reactive.
Strategic managers create control systems to monitor the quality of products. Strategic control systems further help managers achieve superior efficiency, quality, innovation and responsiveness to customers. Strategic managers can measure efficiency by comparing the total inputs with the total outputs (how many units of inputs are used to produce a unoit of output).
Strategic control systems can also help in encouraging employees to think about innovation. Strategic control systems make employees more responsive to customers through monitoring and evaluating employees' behavior and contact with customers.
I am a computer scientist by education and training. My interests are in modeling complex business and social systems to foster better strategic and operations management processes in delivering value to customers while meeting the expectations of stakeholders.