Strategy Driven Organization Change for Sustainable Profitable Growth

Introduction
Strategy execution is a disciplined and systematic process of directing and controlling actionable decisions and activities that make an implemented strategy work. Execution usually takes a long time - longer than the formulation of strategy; 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 by making it more difficult for managers to control execution. Execution also 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. .

Successful execution involves decisions about strategy, structure, coordination, information sharing, incentives and controls. These decisions take place within an organizational context of power, culture, leadership and capacity to manage change; and the capacity to understand and manage the interactions among those decisions and contextual forces. The execution flow involves both top down flows of decisions and actions from corporate strategy decisions through business strategy decisions to strategy implementation decision and actions (participation and communication down and across operating units), and bottom up flows of participation and communication information up the organization.  Execution leads to organizational learning so the flows include feedback loops, and the controls portion comprises feedback and change. 

Obstacles to Effective Strategy Execution
Strategies may fail at execution for a myriad of reasons including the following obstacles:

1. Poor Strategy
2. Planning and Execution are Interdependent
3. Implementation and Execution Takes time
4. Execution Involves Many People
5. Execution involves managers across all levels in the organization
6. Managing Change is Difficult
7. Clarifying Decision Rights and Norms
8. Clarifying Roles, Responsibilities and Accountability for execution activities
9. Poor Knowledge Sharing among functions and divisions
10. Dis-functional Incentives
11. Inadequate Coordination
12. No Guidelines and model to shape execution decisions and activities.

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. ​

Poor Leadership Style
Poor leadership is manifested in a variety of ways, including:

1. Failure of leadership to clearly communicate the reasons for the new strategy and garner the appropriate support to create consensus
2. Failure to generate enthusiasm and motivation in order to overcome any pockets of doubt and resistance to change resulting from successful strategy execution  
3. Failure of leadership to orchestrate the processes and major initiatives
4. Failure to coordinate management and staff in properly performing their tasks to accomplish work.
5. Failure to clearly articulate and communicate the vision and mission as well as the organization's values.

Good Strategy
Good execution begins with good strategy. A good strategy aligns with well diagnosed strategic issue and basic problem. 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. A good strategy is a mixture of policy and action designed to surmount a challenge/problem.

Organization Structure
Corporate structure - the organizational arrangement created in response to the demands of corporate strategy. The result of the decisions about structure is that different units focus on different tasks and specialties. To  achieve unity of effort and to combine the activities of these units, companies must pay formal attention to integrative methods and mechanisms through structural integration. Thus, structural integration refers to business processes that coordinate corporate functions with business unit operations..  Structure affects real costs and benefits. Different ways of organizing affect outcomes, but creating the right organizational structure is a real challenge.

Poor Implementation
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.

Poor Planning
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. 

Strategy Execution System
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.

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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:
  

Introduction
A strategy has to be implemented and executed to be of any use to an organization. The Strategy implementation stage is one of three co-incident stages (formulation, implementation and execution) of the strategic management process; 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 primary concerns of Strategy implementation is making the selected strategy operational throughout the entire organization. Making the selected strategy operational involves several actions and activities that must take place, including:

• Setting Annual objectives - This allows organization to translate long-term objectives into short-term and current targets.  Establishing annual objectives is one of the management issues central to strategy implementation.
• Developing Functional strategies - This enables corporate and business strategy to be defined at the functional level by determining how corporate and business strategy will work or is working at the function level.  A function strategy is the set of strategic initiatives taken, or programs in a functional area of the organization whose primary role is to support the overall business strategy. Functional strategies help in implementation of the overall business strategy by organizing and activating specific sub-units of the organization to pursue the business strategy in their daily activities.   
• Developing Policies - Policies guide and constrain decision makers and should ensure that the various functional strategies are integrated and complementary.   
• Resource allocation - This involves allocation of financial resources to the functional areas relevant to implementation of the strategy. 
• Action planning - Action plans relate to descriptions of the initiatives - "what" tasks must be carried out, "how" and "when" - to be pursued, if corporate and competitive strategies are to be implemented successfully and objectives achieved.

Strategy implementation is the responsibility of top, middle and lower/line managers focused on building capacity through projects and programs to strengthen the organization, and enable it to better deliver value to customers while meeting stakeholders expectations. 

Strategy Implementation Gap
Strategy implementation involves change - closing the gap between organization's current capacity development and the capacity development that the corporate and business strategy calls for. The implementation gap can be manifest as follows:

• Management Induced Gaps - This is a gap caused by the way management acts to implement strategic initiatives. Management can cause a gap between strategy and execution through both action and inaction. Some of the ways management causes this gap includes: failure to secure support for the plan, failure to communicate the strategy, failure to adhere to the plan, and failure to adapt to significant changes.
• Process Induced Gaps - This is the gap caused by the failure of traditional processes (e.g., budgeting, forecasting, reporting) used to implement and monitor strategy. The way these processes are approached can lead to strategy gap resulting from: lack of Strategic Focus, Calendar Based, Financially Focused, Internally Focused, Lack of Realistic Forecasting, Lack of accountability and commitment to the budgeting process, and Wrongly Focused Incentive plans.
• Technology Systems Induced Gaps - These refer to the technology systems used to support those processes such as planning, budgeting, forecasting, and reporting processes. Issues include fragmented systems, and misplaced dependency on ERP systems.

Strategic gap analysis attempts to determine what a company should do differently to achieve a particular goal by looking at the time frame, management, budget and other factors to determine where shortcomings lies. Strategy implementation decisions and actions are the means through which management intentions and choices are actually realized. 

Factors Influencing Strategy Implementation Success/Failure 
Strategy Implementation is fraught with challenges as evidenced by the low percentage of strategies that are effectively implemented. Strategy implementation require a number of key components to be successful, including: 

1. Leadership - This is the capability the organization must possess at decent levels to enable the organization's leaders and managers 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.
2. Information - This represents an 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.
3. Uncertainty - Uncertainty is a state of having limited knowledge of current conditions or future outcomes. Uncertainty creates obstacles and challenges to decision-making due to limited knowledge of current conditions and gaps in our understanding of future outcomes, and effects management behavior in performing their duties have on those outcomes. 
4. Organization Structure -  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. The structure enables strategic alignment - effective cascading of objectives, goals, and decision rights to the appropriate people (actors) in the functional areas of the organization with the capability and capacity to perform the actions at the right time and place to accomplish the requisite goals and objectives.
5. Organization Culture - 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. 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, vision, 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. 
6. Human Resources - 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. 
7. Technology Trends - 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. 

All these factors are interdependent and their influences on implementation success/failure are non-deterministic.

Leadership Style
The failure in leadership to properly perform the leadership functions can lead to management induced gap and implementation failure. Failure in leadership manifests itself as follows:

1. Lack of emphasis on the interfaces within the organization
2. Failing to get employees buy-in in the new strategy
3. Failing to direct employee capabilities toward the new strategy
4. Failing to keep employees motivated and committed to the strategy implementation
5. Lack of controls in terms of progress reviews and appropriate corrective actions.

Information Availability and Accuracy
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:

1. Coordination - Poor coordination
2. Strategic Decision-making - Poor strategic decision-making  resulting in bad decisions such as late and/or untimely decisions.
3. Strategic Decisions - Bad decisions

Uncertainty - Effects of Uncertainty
Uncertainty creates obstacles and challenges to decision-making due to limited knowledge of current conditions and gaps in our understanding of future outcomes and affects management behavior in performing their duties such as:

1. Managers delaying decisions until data becomes more accessible and reliable; of course delaying some decisions brings its own set of risks of failure.
2. Managers lacking the skills and judgment to identify and analyze the factors that can affect outcomes which would enable them to identify likely risks (e.g., strategic, financial, operational, legal, etc.) and potential impacts.
3. Managers having no idea in the short-term how much value their investment decisions and projects have created in some future situation. Typically, the value delivered by enhanced and/or strengthened assets is causally and temporally separated from the successful completion of the strategic initiatives that produced these assets through cause-effect relationships that may involve two (2) or more stages making it difficult for managers to fully comprehend the contribution of these assets to the strategy execution success or failure. 

Uncertainty deals with possible outcomes that are unknown; and is a major component of risk (the likelihood or scale of negative consequences). 

​Organization Structure
​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 gap. Structure not driven by the strategy can create obstacles to successful implementation manifested in the following ways::

1. Poor or inadequate information sharing
2. Unclear accountability of positions and roles
3. Working against the organizational power structure
4. Unclear roles and responsibilities
5. Motivations of employees not aligned with organizational purpose,

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
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::

1. Employees behaving in ways that prevent learning and development; they are unable to adapt to new mind sets (adopt new mental models).
2. Employees behaving in ways inconsistent with organizational values and principles. 
3. Organizational culture not supportive of the principles and values. Organizational culture can be supportive of the strategy by enabling: Learning and Development (Growth), Participatory Decision-Making, Power Sharing, Support and Collaboration, Tolerance for risk and conflicts.
4. organization is unable to change and adapt to new processes and practices

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
Poor Human Resource Management is manifested in the following ways:

1. Poor human resource policies and practices may lead to decreased productivity and poor quality.
2. HR systems inhibit the mobilization of new competencies and/or destroy existing competencies, contributing to organizational vulnerability.
3. Inadequate skills and misalignment
4. Lack of motivation and personal ownership.

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. in terms of the adequacy of their knowledge competencies, and skills. 

Technology Trends
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:

1. Forecast and identify relevant developments – both within and beyond the industry
2. Assess the impact of these developments on existing operations,
3. Define opportunities and threats
4. Lacking capacity development strength in creating technology strategy which deals with choices in. technology, product design and development, sources of technology, and R&D Management and Funding.

Changing technology can offer major opportunities for improving goal achievement, or threaten the existence of the firm due to unpredictable problems

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.

In a rapidly changing world any competitive advantage a firm creates is temporary and not sustainable; without systematic changes to the firm's strategy and plans so it can respond and take advantage of opportunities that emerge as a result of changes in the environment while managing emerging threats that successful execution. 
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The key factors that support successful implementation and execution are the following internal environment elements:

1. People - "Do you have enough people to implement the strategies?" and "Do you have the right people in the organization to implement the strategies?" This core issues area relates to the knowledge, experience, and skills of the people (workforce) in the organization, and .is a determining factor in implementation success. Organizations invest in recruiting and training to build this capability critical to successful implementation.
2. Resources - Do you have adequate funding (financial strength) to support implementation, covering the costs and expenses that must be incurred in the execution of the strategies?" and "Do you have enough time to see the strategy throughout its implementation?" Financial strength is a factor in its won right that influences other internal environment factors. 
3. Structure - Is the structure clear-cut with lines of authority and responsibility defined and underlined in the "chain of command?" "Are the lines of communication throughout the organization clearly defined by management?" Organization structure is essentially defines how the work needed to carry out the mission is divided among the workforce/people.
4. Systems - What systems, tools, and capabilities are in place to facilitate the implementation of the strategies? What are the specific functions of these systems? Hopw will these systems aid in the implementation? The availability of the appropriate systems can significantly impact the implementation and execution performance. If the right systems are not available,or the available systems are not up to expected standards then workers and management may be hindered in the performance of the duties. If the inadequate systems are used by customers then customer satisfaction will suffer.   
5. Culture - Organization culture is influenced by the values and beliefs of the organization, and manifested in the attitudes of employees and partners, and their ability to "go the extra mile". Negative attitudes can severely and adversely impact the organization's capacity to successfully implement and execute its strategies. 
6. Management - The capability of the management team and the leadership styles employed by managers will also have a major impact on employee morale and motivation, and organizational culture.

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.


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Typically, the implementation gap - the  gap between the strategic plan and its implementation - is caused by missing integrative links such as:

1. Focus on Strategic Implementation - Strategic change in organizations is largely delivered through multiple projects and programs. The absence of an implementation process that is focused on a portfolio of strategy-fulfilling projects can result in an implementation gap.
2. Common Top-Down Understanding - The firm's vision and strategic plan are generally created by top executives of the organization. The plan's implementation is carried out by middle and line management, and professionals and lower level employees through changes in operations and delivery of projects. Disconnects in both directions (top-down and bottom-up views) are often found to exist in the organization.
3. Organizational Focal Point - Lack of organizational focal point that is responsible for overseeing the implementation of all the strategic projects. A vertical implementation rather than a cross-organizational implementation, invariably occurs. Delegating responsibilities to the functional level VPs is a common problem.
4. Alignment Across Functions - This missing link relates to not having a cross-functional group that is responsible for strategic level decisions during implementation. The key here is making priority, resource, and other trade-off decisions among all the critically important projects.
5. Executive Transition Mitigation - Frequent turnover of executives at VP level or above often result in dramatic implementation slowdowns and organizational conflicts.
6. Feedback Loop - A missing link is a set of performance metrics and control reports that enable feedback, organizational learning, and continuous improvement over time. Sustaining competitive advantage over time makes continuous improvement mandatory.

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