Sustainable Organization Growth and Profitability through Strategy Driven Organizational Change
What is Strategy Execution?
Strategy execution is a disciplined and systematic process of managing - directing and 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 contribute to making the implemented strategy work as intended, and turn implemented strategy into commercial/social success. Execution involves both top-down and bottoms-up approaches. The top-down approach involves flows of corporate level strategy decisions through business level strategy decisions to strategy implementation decision and actions, and participation and communication down and across operating units. The bottom up flows of participation and communication of information up the organization managers through feedback mechanisms. 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 the executed as-needed reactions to unanticipated developments and fresh competitive pressures.
Strategy Execution Process
The execution process flow involves both top-down flows of decisions and actions and bottom up flows of participation and communication information up the organization. The strategy execution is a process of managing people, strategy and operations and 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. Execution management facilitates and guides a complex mix of decisions and actions on in doing what it takes to make the strategy work as intended.
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.
Factors Influencing Strategy Execution Success/Failure
Strategy execution involves change that typically takes over a long period of 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.
Effective strategy execution involves closing the execution gap by creating "fits" between the way things are done and what it takes for effective execution, to make the strategy work as intended. To understand successful execution, we need to understand the interactions among key execution decisions and actions, and contextual forces that create significant and persistent execution gap. These factors include:
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.
Closing The Strategy Execution Gap
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.
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
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.
Strategy Implementation Process
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:
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.
Typically, the value delivered by enhanced and strengthened existing assets or new assets is causally and temporally separated from the successful completion of the strategic initiatives that produced those assets. Any cause-effect relationships may involve two (2) or more stages; making it difficult for managers to fully comprehend the contribution of these assets to the success/failure of the implementation and execution of the strategy. In the absence of certain cause-effect relationships or experience in how these dialectical (verbal) processes between organizations will unfold, the firm can only hypothesize about the effects of different possible initiatives, and learn more about them through interaction with other actors such as competitors, regulators, customers, suppliers, and partners in its competitive landscape.
Strategy implementation involves change - closing the gap between organization's current capacity and the capacity the strategy calls for. The implementation gap can be manifested as:
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:
All these 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.
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:
Uncertainty deals with possible outcomes that are unknown; and is a major component of risk (the likelihood or scale of negative consequences).
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::
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. .
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. un-supportive 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.
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. Poor Human Resource Management is manifested in the following ways:
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
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.
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.
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.
Typically, the implementation gap - the gap between the strategic plan and its implementation - is caused by missing integrative links such as:
I am a computer scientist interested in modeling complex business systems, and strategic management processes to drive analysis and evaluation of strategic decision making and decisions. Specifically, I am interested in the use of modeling to improve organization managers shared understanding of strategy and its influence of organizational behavior and change. And how this understanding informs management's decisions and actions in effectively managing strategy formulation, implementation and execution,