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 contribute to making the implemented strategy work as intended, and turn implemented strategy into commercial/social success.
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. 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
Execution involves doing things (such as making decisions and directing activities) to create "fits" between the way things are done and what it takes (how things should be done) within the context of the strategy implementation to make the strategy work as intended. 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:
The economy, competitors, the market and its challenges, and the availability of resources are not the reasons at fault, since other businesses are able to survive, grow nd thrive. The real (causal) reason can be attributed to mismanagement - inability of the business organization to manage its strategy very well. Strategy management 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
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. 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.
Execution involves integration of both top-down and bottoms-up flows. The top-down integration involves cascaded flows of coordinated decisions and actions (participation and communication) through the implemented layers of corporate strategy, business strategy and operations strategy in the organization. The bottom up flows of participation and communication of information up to the organization managers through feedback mechanisms. Successful execution requires the capacity to monitor and evaluate changing environment factors and take decisive corrective action. The whole execution system/engine is synchronized by functional strategy that provide resources and capabilities to all three (3) strategy levels.
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.