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. 

1. Update strategy - The strategy at this stage is the action plan designed to achieve your vision. A company needs to update its strategy based on changes in its competitive environment and on the strategy execution feedback from previous cycle. The strategy should be measurable and easy to understand. 
2. Communicate Strategy - Once the update is complete, finalized and approved by all stakeholders, focus on communicating the strategy throughout the whole organization.  Leadership must communicate visualized strategy to the workforce that will help them understand not only what needs to be done, but why. It is difficult to execute a strategy when it is not well understood, or performance relative to it is not communicated.
3. Cascade Strategy - Break down the objectives into smaller chunks for the next level in the organization structure. The process stops at the smallest unit level unit - typically teams/groups - the organization hierarchy. It is crucial to achieve macro alignment between the objectives - vertical and horizontal integration. On a micro level you need to balance your objectives across perspectives such as the four (4) traditional perspectives of Financial, Customer, Internal Processes, and Learning and Growth (People). The full complement of financial and strategic measures are organized into a scorecard - a system of performance dashboard, so the management can ascertain if progress is being made towards the desired ends.
4. Compare and Learn -Your strategy is a hypothesis, its your best estimate of the route to success. It is essential to check your hypothesis at the end of an execution cycle; compare your initial strategic assumptions with what you have learnt from the reality of the results from the completed execution cycle.  In addition, look back at your Strategy Execution Capability as well to ensure it is supportive of your strategy. Update your strategy and fine tune your execution capabilities if necessary.
5. Manage Initiatives - This is about selecting, prioritizing, and executing the right initiatives; those actions that will lead to the realization of your objectives. Initiative management involve activities to link to project management activities and execution..
6. Set Objectives (Personal Goals) - Set individual performance goals and objectives for managers and employees. Make to link  all individual objectives with the strategy at the organization level. Aligning Individual Roles - Senior leadership must ensure that employees at all levels can articulate and evaluate their personal contribution towards achieving specific strategic goals.
7. Monitor and Coach - Monitor and coach regularly to motivate and provide feedback in the right way.
8. Evaluate Performance - Most organizations conduct a formal performance evaluation and review at the end of the individual  performance management cycle. The evaluation should answer the basic question; "have the individual performance objectives been achieved?"

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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:

1. Bad Strategy - 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. Bad strategy is reflected on an organization's failure to face the problems that pose threat to its survival and profitable growth. A good strategy aligns with well diagnosed strategic issue and basic problem; and is an approach to overcoming an obstacle; or a response to a challenge.  A good strategy is a mixture of policy and action designed to surmount a challenge/problem. 
2. Bad Strategic Decisions - Strategic decisions are among the main means through which management choices are actually realized. Bad strategic decisions are strategic decisions whose outcomes are the wrong expected outcomes, and result in business failure/decline. 
3. Poor Implementation - This is failure of strategic initiatives that define major efforts/actions required to close identified strategic gaps to achieve intended objectives, so the organization can make progress towards its strategic goals. The gaps may be (1) between strategy and organization capabilities, (2) between strategy and the reward structure, (3) between strategy and internal support systems, and (4) between strategy and the organization's culture. Poor implementation may result in weak strategic assets that do not close the strategic gap, and make successful execution is unlikely. 
4. Inadequate Structure - The organization structure defines appropriate boundaries for lines of business, shared services and functions, centers of expertise and other integrative and coordinating methods and mechanisms that allow the company to leverage scale and expertise. The structure in addition specifies the size and shape of the organization with indicative resource levels and locations. Inadequate structure is a structure that is not aligned with the strategy and supportive of it. 
5. Supportive Culture - Organizational culture is the overall atmosphere within the company, particularly with respect to its members and their involvement in how work gets done.  The company should foster a culture of being responsible and accountable for one's actions with corresponding incentives and sanctions for good and bad behavior.
6. ​Accountability - This specifies and clarifies the Roles, Responsibilities of the main organizational entities, including ownership of P&Ls and a clear value-adding role for the corporate center. There should be clear guidelines for the roles each organizational unit will play in critical decisions. A rewards system linked to these accountability reinforces strong execution.  
7. Poor Coordination - Implementation and Execution Takes time, Execution Involves Many People, Execution involves managers across all levels in the organization this requires leadership in coordinating management and staff in properly performing their tasks to accomplish work.
8. Managing Change - This relates to the difficulty of managing employee resistance to change. People become comfortable with the way the business is run; they know the expectations and their role within the company. When a major change disrupts their familiarity, some employees become upset; they don't want to relearn their jobs or change the way they have done things. The leadership in the organization need to support the employees and provide training for any new responsibilities to ease the transition.
9. Poor Leadership - Effective strategy execution requires leadership and management effectively communicate the vision and mission of the organization to employees and ensure they are aligned with the vision and mission goals and objectives.  Leadership must also understand the the current climate (influenced by culture) and ensure the organization climate is appropriate to support successful strategy execution or make the appropriate and necessary changes to culture.  Clarifying Decision Rights and Norms.
10. Poor Communication - Failing to communicate effectively creates uncertainty and makes employees feel as if they are not part of the team and decisions. This invites fear and rumors into the work environment, disrupting work and progress towards change implementation. Keeping employees updated regularly about the progress of strategy performance improves employee involvement.
11. Poor Planning - This results in inefficient utilization of resources such as time and labor as well as lack of capacity to managing change. Without adequate planning, change in the organization is likely to fall apart or cause more problems than benefitsPoor 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. 

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.
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​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
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