Understanding strategy Implementation

Strategy Implementation
Strategy implementation is the responsibility of top, middle, and lower/line managers. It focuses on building capacity through projects and programs to strengthen the organization and enable it to better deliver value to customers while meeting stakeholders’ expectations. It is an action-oriented process for building a capable organization that can make the selected planned/formulated strategy work as intended.

A strategy is considered implemented if:

• The corporation has the capabilities, enterprise advantage, and business portfolio it wants (corporate strategy).
• The business unit has the customers, value proposition, and skills it has chosen to have (business strategy).

However, a strategy can never be fully implemented because assumptions made during formulation (about customers, technology, regulation, labor market, competitors, etc.) are constantly changing. There will always be a gap between where the company is and what its strategy calls for. Closing this gap is the essence of implementation.

Why Strategy Implementation Fails
Strategy implementation can fail for various reasons, including the organization’s inability to manage its strategy well when faced with challenging situations such as:

• Economy: Economic upheavals that hinder new businesses from surviving, growing, and thriving.
• Competitors: Actions of competitors.
• Market: Business challenges inherent in the market.
• Resource Availability: Lack of adequate resources.

These challenges are not the root cause of failure, as other businesses can survive, thrive, and grow. The real reason is often mismanagement - the inability of the business organization to manage its strategy effectively.

Effective Strategy Management
Effective strategy implementation management involves closing the “execution” gap - the gap between actual/current strategy performance and intended desired performance.

Strategy implementation involves changes in people, which typically takes a long time. This makes it more likely that the conditions under which the strategy was formulated will change, and unforeseen circumstances may arise to derail execution.

Management needs to understand the interactions among key execution decisions and actions, and contextual forces that create significant and persistent execution gaps as measured by the Operating Model. An important task of managers is to design strategic control systems for successfully implementing and executing a strategy.

Managing Organizational Change
Managing organizational change requires a system of controls - tools designed by managers to help monitor and evaluate the progress of activities directed towards executing the organization’s implemented strategy. Factors influencing execution success/failure include:

• Bad Strategy: A strategy that does not define an approach to respond to a challenge or solve a known problem.
• Bad Strategic Decisions: Strategic decisions whose outcomes are not as expected, leading to business failure/decline.
• Poor Implementation: Failure of strategic initiatives required to close identified strategic gaps.
• Inadequate Structure: A structure not aligned with and supportive of the strategy.
• Culture: The overall atmosphere within the company, particularly regarding its members and their involvement in how work gets done.
• Accountability: Clarifying roles and responsibilities, including ownership of P&Ls and a clear value-adding role for the corporate center.
• Poor Coordination: Execution involves many people and requires leadership in coordinating management and staff.
• Not Managing Change: Difficulty in managing employee resistance to change.
• Poor Leadership: Effective strategy execution requires leadership to communicate the vision and mission of the organization.
• Poor Communication: Failing to communicate effectively creates uncertainty and disrupts work and progress.
• Poor Planning: Inefficient utilization of resources and lack of capacity to manage change.

These factors are interdependent and their influences are non-deterministic, making it difficult for managers to comprehend their contribution to successful strategy execution. An organization needs a system and approach to support the management of these factors and their influence on successful execution.

Strategy Implementation Management
Strategy execution management is a process of managing people, strategy, and operations. It is a disciplined and systematic approach to managing the day-to-day decisions and activities undertaken at all levels in the organization, involving top management, middle management, and front-line managers and workers.

Strategic managers create control systems to monitor the quality of products. These systems provide managers with tools to regulate and govern their activities. In strategic control, managers first select strategy and organization structure, then create control systems to evaluate and monitor the progress of activities directed towards implementing and executing strategies. Finally, they adopt corrective actions through adjustments in the strategy if variations are detected.

Strategic control systems provide managers with tools to regulate and govern their activities through both proactive (feed-forward) and reactive (feedback) mechanisms. Proactive control systems help keep an organization on track, anticipating future events and responding to opportunities and threats. Reactive control systems help detect deviations after events have occurred and then take corrective actions. These systems help managers achieve superior efficiency, quality, innovation, and responsiveness to customers. They also encourage employees to think about innovation and make them more responsive to customers through monitoring and evaluating their behavior and contact with customers.