Structure Follows Strategy, in Strategy Driven Enterprise Organizations
Strategy execution represents a disciplined and systematic process of directing and controlling actionable/decisive decisions and activities that make an implemented strategy work resulting in the transformation of the organization and its institutions to strengthen it, and lead to sustainable growth and improved performance. Strategy execution requires the effective interplay of cooperation between strategic management and operations management in combining deliberate and purposeful actions demanded by the intended strategy from the strategic plan, and emergent strategy - as-needed reactions to unanticipated developments and fresh competitive pressures to realize the actual strategy.
Factors Influencing Strategy Execution Success/Failure
Strategies may fail at execution for a myriad of reasons including the six (6) factors discussed below. 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 in successful execution.
In the context of strategy execution, complexity refers to challenges to understanding an issue due to lack of information and lack of insight into the problem domain due to:
Organizations are by definition complex adaptive systems with several independent and interconnected factors that influence each other as well as the decision-making of several independent and interconnected stakeholders.
Poor Leadership Style
Poor leadership is manifested in a variety of ways, including:
A strategy may be defined variously as an approach to overcoming an obstacle; or a response to a challenge. A bad strategy is a strategy that does not define an approach/means to respond to a challenge (opportunity/threat) or solve a known problem. It reflects an organization's failure to face the problem. The strategy does not align with well diagnosed strategic issue and basic problem. A good strategy is a mixture of policy and action designed to surmount a challenge/problem.
This results in failure of strategic initiatives that define major efforts required to close identified strategic gaps so the organization can make progress towards its strategic goals. Poor implementation may result in weak strategic assets that do not close the strategic gap, and since execution takes place within the context of the implemented strategy, successful execution is unlikely.
Bad Strategic Decisions
Bad decisions result in the wrong outcomes. Bad strategic decisions are strategic decisions whose outcomes result in business failure/decline. Bad decisions may result from incomplete or short-circuited decision processes.
Strategic decisions are among the main means through which management choices are actually realized. They are difficult or expensive to reverse because they substantially alter (and irrevocably so in the short run) the relationships between the decision makers' organization and customers, competitors, etc. The decision's outcomes are usually contingent on effects - the behavior of other actors affected by the decisions and outcomes. These recursive relationships between decisions, decision outcomes, and effects on other actors' behavior make strategic decisions messier and more complex than operations decisions.
This results in inefficient utilization of resources such as time and labor as well as lack of capacity to managing change. Poor planning may lead to strategy execution failure resulting from: bad or unrealistic schedules for project team members resulting in waste of time and poor time management; lack of clear definition of strategy and project objectives; lack of budgetary controls leading to misuse of funds, etc.
Managing Strategy Execution
The actual strategy of an organization is realized through combined execution of the intended strategy - what managers have set out in advance and intend to do - as part of some important strategic plan, and as-needed reactions to unanticipated developments and fresh competitive pressures to realize the actual strategy New circumstances always emerge, whether important technological developments, rivals successful new products introductions, newly enacted government regulations and policies, etc., that create enough uncertainty about the future that makes it impossible for managers to plan every strategic action in advance and pursue their intended strategy without alteration.
Organizations need a system to support managers in influencing the effectiveness of planned actions (top-down) and as-needed adaptive reactions to unforeseen conditions ("unplanned" bottom-up strategy responses) in order to improve the likelihood of successful execution:
Strategy implementation is one of three co-incident processes involves in the strategy management. Strategy implementation provides the connecting loop between formulation and execution and control; Strategy implementation is key to any organization's survival and growth; and requires the collaboration of everyone inside the organization, and on many occasions parties outside the organization.
The focus of strategy implementation is strategic change in the organization; this is largely delivered through multiple simultaneous projects. Strategy implementation is the responsibility of top, middle and lower/line managers focused on building capacity (capacity development) through projects and programs to strengthen the organization, and enable it to better deliver value to customers and meeting stakeholders expectations. In a rapidly changing world any competitive advantage a firm creates is temporary and not sustainable; this requires changes to the firm's strategic plans and changes to the corresponding implementation plans.
Factors Influencing Strategy Implementation Success/Failure
Strategy implementation involves closing the gap between organization's current capacity development and the capacity development that the strategy calls for. And because of the rapid and on-going changes in the business position and technology the implementation is never fully completed. Strategy implementation fails for a myriad of reasons including the six (6) factors discussed below. 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 their strategy implementation decisions.
This is a capability the management of the organization must possess at decent levels to enable the organization's leaders and management to effectively organize, coordinate and communicate the organization's direction and vision to the workforce and keep them motivated and committed to achieve the mission and strategic objectives and goals.
Failure to properly perform the leadership functions can lead to the following:
Information Availability and Accuracy
This is the organization capacity to provide information System of processes and information flows that link the organization together and make accurate information available in a timely manner to support effective decision-making, communication and learning.
Inadequate information systems capacity leading to poor Information Flows and availability of accurate information to support fast and accurate progress tracking, timely intervention, and corrective action at the right time and place.may result in obstacles to successful implementation because of the degradation in certain management functions such as:
Uncertainty - Effects of Uncertainty
Uncertainty is a state of having limited knowledge of current conditions or future outcomes. Uncertainty deals with possible outcomes that are unknown; and is a major component of risk (the likelihood or scale of negative consequences). Uncertainty creates obstacles and challenges to decision-making due to limited knowledge of current conditions and gaps in future outcomes; and is manifested in management behavior such as:
Risk is a certain type of uncertainty that involves the real possibility of loss.
The structure and operating principles as well as governance of the organization becomes more complex and critical to manage. Structure Alignment problems - the overall strategy not properly aligned (i.e., working) with the current structure; the way people and tasks/work are organized, and roles and responsibilities are assigned to people not aligned with strategy would lead to implementation problems. Weak structure can create obstacles to successful implementation manifested in the following ways::
The structure enables strategic alignment which enables effective cascading of objectives, goals, and decision rights to the appropriate people (actors) in the organization with the capability and capacity to perform the actions at the right time and place to accomplish the requisite goals and objectives.
Organization structure provides an explanation of the decision-making process and clarifies the roles and responsibilities, allocation of human resources (the way people and tasks/work are organized and roles and responsibilities are assigned to people), and the enabled level of flexibility to respond to unexpected circumstances. The organization structure design and the degree to which it effectively enables managing complexity, coordination and control of organizational behavior is critical to effective decision-making as the decision rights cascade during strategy implementation and execution grows. Within the structure, rules, policies, and procedures are uniformly and impersonally applied to exert control over organizational members’ behaviors. .
Organizational culture is the collective behavior of humans who are part of an organization, and the meanings they attach to their actions. Culture includes the organizational values, visions, norms, working language, systems, symbols, beliefs and habits. Culture manifests itself in the particular way things are done in an organization including how decisions are made. It affects who gets hired, how they get trained (formally or informally), what behaviors get rewarded, who gets promoted, and virtually all organizational procedures and administrative protocols.
Organization culture defines the particular way the organization solves problems of survival through adaptation to external environment and internal integration which is supportive of the strategy. Weak culture is by definition not supportive of the new strategy and leads to organizational behavior and performance problems that present obstacles and challenges to successful implementation. Unsupportive culture is reflected in organizational behavior such as::
Execution requires supportive culture and demands ownership at all levels in the organization including management and workforce. People must commit to and own the processes and actions central to effective execution.
Human resources are the people that comprise the workforce including managers of an organization, and the adequacy of their competencies, knowledge and skills. Human resources represent one the category of assets employed by an organization to create and deliver products and services to customers. Poor Human Resource Management is manifested in the following ways:
Human resource management is a function concerned with ensuring that the organization obtains and retains the skilled, committed and well-motivated workforce it needs. Strategic Human Resource Management is particularly focused on the alignment of human resources as a means of gaining competitive advantage. Strategic Human Resource Management is particularly focused on the alignment of human resources as a means of gaining competitive advantage in terms of the adequacy of their knowledge competencies, and skills.
Technological trends include not only the glamorous invention that revolutionizes the lives of the actors in the organization and its environments, but also the gradual painstaking improvements in methods, in materials, in design, in application, unemployment, and the transportation and commercial base nd their diffusion into new industries and efficiency. The rate of technological change varies considerably from one industry to another.
Changing technology can offer major opportunities for improving goal achievement, or threaten the existence of the firm. Lack of organizational capability to adapt to technology changes is reflected in the conditions and gaps:
Changing technology can offer major opportunities for improving goal achievement, or threaten the existence of the firm due to unpredictable problems
Factors Supporting Effective Strategy Implementation
Effective strategy implementation and execution involves managing change in the organization's internal environment which then allows the organization to successfully adapt to the changing external environment in which it operates but cannot control. The key factors that support successful implementation and execution are the following internal environment elements:
These factors are generally in agreement with the key success factors or prerequisites for effective strategy implementation as identified by the McKinsey.
Organization capacity development can be measured in terms of changes in the enabling environment, organizational, and individual levels.
Each of the factors influences implementation outcomes (closing the gap) in a different way; if an organization fails to pay proper attention to one of these factors, it can result in implementation failure, therefore an organization needs a system and approach to support management in successful execution.
The factors that influence the successful implementation of a strategy are interdependent and their influences are non-deterministic it is typically very difficult for managers to comprehend the contribution of these factors to the successful outcomes of strategy implementation making strategy implementation very hard.
I am a computer scientist interested in modeling of complex business systems, and model-driven analysis and evaluation of strategic management and operations management and the interplay between them. Specifically, I am interested in the use of modeling to improve understanding of strategy, its formulation, implementation and execution, and the interplay between intended strategy, emergent strategy and leaning to inform better strategic decision-making.