Craft Strategy that Creates Value and 3 ways to Improve Competitive Advantage
Every "for-profit" or "non-profit" company, wants to attain sustainable growth and profitability to satisfy the expectations of its stakeholders. This requires having the right people and skills, products and services with strong market demand, effective strategic and operations management, and efficient operations. An organization is unlikely to achieve sustainable growth and profitability if it fails to effectively convert ideas into good strategies, and translate those strategies into workable and effective actions which are executable. Sustainable growth and profitability requires the successful interplay of effective strategic management utilizing the Strategic Engine and efficient Operations Management utilizing the Operations Engine. Effective strategic management involves strategic decisions, judgment, and actions which links rhetoric (what people say), choices (what people decide and are willing to pay for), and actions (what people do) in shaping the nature and direction of an organization's activities that determine the long-run performance of an organization.
Strategy is a critical differentiator and a necessary element for long-term success of an organization. Strategy unites the whole workforce, enables the development and nurturing of opportunities, and ensures endurance during crises or turbulent/tough times. Most companies however, fail to successfully execute their strategy to get the most benefits from it. There are a number of reasons for this lack of success including the lack of organizational capability in managing for strategic success. Managing for strategic success involve decisions where managers can actively influence outcomes, and success means doing better than rivals. This requires managers to possess the capability to actively influence outcomes by the way they lead, communicate and their ability to inspire and encourage others, place competitive bets, and thinking strategically first and applying the thought to action to beat rivals. Strategic decisions are means by which management intentions are realized.
[TBD]
Organizations are in business to be successful and prosper (survive, grow and thrive).
Success in business is not a random occurrence. It is the result of planning, organizing, directing and execution of the organization's strategy undertaken by leadership and executive management. Every company has a strategy; a strategy has to be good, implemented and executed for it to create value.
[TBD]
A firm must grow and nurture its capacity/capability at the organizational level to effectively manage the interplay of the strategic and operations engines to gain sustainable competitive advantage leading to profitable organizational growth. Organizational level capability refers to internal structures, policies, and procedures that determine the organization's effectiveness. It is at this level that the benefits of the external enabling environment are put into action through market-based view to strategy development. And a collection of individuals come together as a system.
The better resourced and aligned the market-based and resource-based views are, the greater the potential for growing capacity/capability and adding value over time to the business for for customers, owners, and employees.
Strategy is a critical differentiator and a necessary element for long-term success of an organization. Strategy unites the whole workforce, enables the development and nurturing of opportunities, and ensures endurance during crises or turbulent/tough times. Most companies however, fail to successfully execute their strategy to get the most benefits from it. There are a number of reasons for this lack of success including the lack of organizational capability in managing for strategic success. Managing for strategic success involve decisions where managers can actively influence outcomes, and success means doing better than rivals. This requires managers to possess the capability to actively influence outcomes by the way they lead, communicate and their ability to inspire and encourage others, place competitive bets, and thinking strategically first and applying the thought to action to beat rivals. Strategic decisions are means by which management intentions are realized.
[TBD]
Organizations are in business to be successful and prosper (survive, grow and thrive).
Success in business is not a random occurrence. It is the result of planning, organizing, directing and execution of the organization's strategy undertaken by leadership and executive management. Every company has a strategy; a strategy has to be good, implemented and executed for it to create value.
[TBD]
A firm must grow and nurture its capacity/capability at the organizational level to effectively manage the interplay of the strategic and operations engines to gain sustainable competitive advantage leading to profitable organizational growth. Organizational level capability refers to internal structures, policies, and procedures that determine the organization's effectiveness. It is at this level that the benefits of the external enabling environment are put into action through market-based view to strategy development. And a collection of individuals come together as a system.
The better resourced and aligned the market-based and resource-based views are, the greater the potential for growing capacity/capability and adding value over time to the business for for customers, owners, and employees.
-
Strategy Model
-
Implementation Model
-
Execution Model
-
Evaluation Model
<
>
Strategic Engine and Model
In the context of business, a strategy is the means by which a company achieves its long-term organizational goals such as: beating competitors in gaining more customers, revenues, or market share; improving community relations; or providing greater profits to their owners. An organization needs a valid and viable strategy that provide the means to effectively solve the underlying problems to strategic issues in order to prosper - survive, grow, and thrive. The importance of strategy to steer organizations through uncertain times in turbulent situations cannot be over emphasized.
Strategy Hierarchy Model
The strategy hierarchy model is a layered model of options/decision choices that define corporate, business, or operations strategy decisions. A strategy model is company specific, customized to the company's own situation and performance objectives. It is comprised of component options that address such concerns as how to grow the business, how to satisfy customers, how to out-compete rivals, how to respond to changing market conditions, how to manage the organization's functional areas, and how to achieve strategic and financial objectives.
In this model, CS and BS provide the right scope and direction for strategy formulation and execution. OS provides estimated details for the right implementation and establishment of the right processes. Those ingredients are vital part of the strategic management process and a core success factor. .The unique combination of top-down (CS and BS) with bottom-up (OS and BS) approaches ensures the right fit of strategy levels. It provides an intersection between vision and details, a crossing point between long-term and short-term objectives. The success of both approaches is reinforced by organization functions (e.g., marketing, HR, IT, Finance, etc.) and functional strategies which appear at all levels.
Approaches to Strategy Formulation
An approach to strategy development and execution through the integration of market-based view and resource-based view approaches to crafting and executing strategy that creates value and sustainable competitive advantage.
The market-based view works from the outside-in approach, and the resource-based view works from an inside-out of the firm perspective.
Successful strategy formulation involves crafting a set of good strategic options, and a clear set of recommendations for the selected alternative. Those recommendations revise, as necessary, the organization's mission, its supply of resources and objectives in meeting the expectations of the stakeholders.
Strategy Statement
The strategy statement describes what the organization's competitive game plan will be. A strategy statement communicates the company's intended strategy to everyone within the organization. A well written strategy statement will help employees and the organization to understand their roles when executing the company's strategy. Mixing the deliberate and emergent strategies in some way helps the organization to control its course while encouraging the learning process.
The statement consists of three (3) components objective, scope, and competitive advantage.
The strategy statement is a hypothesis of the means by which strategic goals i.e., sustainable growth, are achieved.
[TBD]
Strategy Hierarchy Goals Model
The logical view model of strategy is a goals model of the vision, mission, and desired outcomes the organization should achieve for a given chosen strategy. The model defines an integrated hierarchy of goals models representing vision, mission, strategic goals - corporate, business, and functional. The strategic goals define expected outcomes or results the organization wants to change to better meet the organization's mission. The strategic goals correspond to the various levels/layers at which strategy concept exists in the organization i.e., corporate, business, and functional levels. The strategy concept at each layer is the means of achieving the results defined by the strategic goals for that layer e.g., corporate strategy, business strategy, and functional strategy respectively.
Creating integrated goal models of corporate and business strategy collectively define the organization's strategic direction and intent in terms of the outcomes, achievements, or goals a business wishes to achieve over a specific time-frame..
The Strategy Formulation Logic Model is a visual representation, a road map, which shows the logical relationships among the various elements of a layered model of the concept of strategy. The intended and desired outcomes are represented as goals. A goal is a broad/general statement about intended state of the world we want to bring about.
A logic model of the strategy provides an explicit visual representation of it's constituent elements and their relationships to each other, and to the intended and desired outcomes to be achieved.
Goals and objectives provide the milestones for measuring the success of the strategy in achieving the mission and vision. Goals are statements of what needs to be done to implement the strategy. Objectives are specific milestones for meeting a specified goal. A strategy has to be sound, implemented and executed to have value.
Benefits
The explicit visual model of strategy makes the concept easy to grasp, and enables the organization to work out a shared understanding of the strategy. This helps managers clarify their thoughts and build consensus on the company's strategy; ensuring strategy determination does not degenerate into solemn recording of platitudes, useless for building consensus. The visual model also satisfies the needs of employees and stakeholders that cooperate to keep the organization alive and successful.
Strategy Evaluation
Strategy acceptability evaluation is based on soundness of the strategy, and a set of selection criteria that ensures the chosen strategies will be acceptable to stakeholders.
The soundness criteria involves assuring that
The acceptability criteria may include the following: Does it fit with the values of the company and the employees? Is the strategy acceptable to the Board, key staff, and other stakeholders? A viable strategy is defined in terms of the degree to which the strategy meets those criteria.
[TBD]
In the context of business, a strategy is the means by which a company achieves its long-term organizational goals such as: beating competitors in gaining more customers, revenues, or market share; improving community relations; or providing greater profits to their owners. An organization needs a valid and viable strategy that provide the means to effectively solve the underlying problems to strategic issues in order to prosper - survive, grow, and thrive. The importance of strategy to steer organizations through uncertain times in turbulent situations cannot be over emphasized.
Strategy Hierarchy Model
The strategy hierarchy model is a layered model of options/decision choices that define corporate, business, or operations strategy decisions. A strategy model is company specific, customized to the company's own situation and performance objectives. It is comprised of component options that address such concerns as how to grow the business, how to satisfy customers, how to out-compete rivals, how to respond to changing market conditions, how to manage the organization's functional areas, and how to achieve strategic and financial objectives.
- Corporate Level Strategy (CS) - Corporate strategy is concerned with choices regarding strategic positioning and direction, and sets the context for business strategy and operations strategy. Corporate strategy decisions/choices determine the long-term orientation of organization development, and corporate activities that evaluate current market positions and identifies investment priorities for the businesses.
- Business Level Strategy (BS) - Business strategy is concerned with how the organization competes within a specific industry/market. It involves decisions and choices regarding competitors, and the nature of competition and competitive advantage. It involves formulating responses to changes in the industry, crafting competitive moves and market approaches leading to sustainable competitive advantage by building valuable, rare and hard to copy competencies and capabilities.
- Operations Level Strategy (OS) - Operations strategy represents top-down reflection of what the business wants to do, simultaneously with bottom-up activity where operations improvements cumulatively build strategy. It involves translation of market requirements into operations decisions and exploits the capabilities of operations resources in chosen markets.
In this model, CS and BS provide the right scope and direction for strategy formulation and execution. OS provides estimated details for the right implementation and establishment of the right processes. Those ingredients are vital part of the strategic management process and a core success factor. .The unique combination of top-down (CS and BS) with bottom-up (OS and BS) approaches ensures the right fit of strategy levels. It provides an intersection between vision and details, a crossing point between long-term and short-term objectives. The success of both approaches is reinforced by organization functions (e.g., marketing, HR, IT, Finance, etc.) and functional strategies which appear at all levels.
Approaches to Strategy Formulation
An approach to strategy development and execution through the integration of market-based view and resource-based view approaches to crafting and executing strategy that creates value and sustainable competitive advantage.
- Market-Based Approach - An organization makes a decision regarding its positioning in the markets and the customers within those markets it intends to target. The organization's market position is one in which its performance enables it to attract customers to its products and/or services in a more successful manner than its competitors. Competitive factors (distinctive competencies) are its products and services order-winners (for example, price, quality delivery speed, etc.). Satisfying market requirements (expressed and measured in terms of competitive factors) by setting appropriate performance objectives for operations.
- Resource-Based Approach - Making decisions based on the deployment of operations resources which affect the performance objectives for operations. With this approach there is an assessment of the operations decisions regarding: (1) Structural Decisions - Physical arrangement and configuration of resources, (2) Infrastructural Decisions - Activities that take place within the operation's structure. The nature and complexity of formal and informal processes, tangible and intangible resources is central to the resource-based view of strategy.
The market-based view works from the outside-in approach, and the resource-based view works from an inside-out of the firm perspective.
Successful strategy formulation involves crafting a set of good strategic options, and a clear set of recommendations for the selected alternative. Those recommendations revise, as necessary, the organization's mission, its supply of resources and objectives in meeting the expectations of the stakeholders.
Strategy Statement
The strategy statement describes what the organization's competitive game plan will be. A strategy statement communicates the company's intended strategy to everyone within the organization. A well written strategy statement will help employees and the organization to understand their roles when executing the company's strategy. Mixing the deliberate and emergent strategies in some way helps the organization to control its course while encouraging the learning process.
The statement consists of three (3) components objective, scope, and competitive advantage.
- Objective - The Objective defines the ends that the strategy is designed to achieve within a specific time frame. The strategic objective is the single, specific objective that will drive your organization. This must not be confused with the company's vision, mission or values. The objective must be specific, measurable and time bound. It must be a single goal (i.e., growth or profitability), although subordinate goals may follow from the strategic objective.
- Scope - The Scope is the domain of the business - the part of the business landscape in which the company will operate. The company's scope revolves around three (3) dimensions - the target customers, location/geography and products. The scope must emphasize where the business direction and focus will go.
- Competitive Advantage - The Competitive Advantage is the essence of your strategy. It determines what you will do differently or better than the competition to achieve your objective. This component describes your strategies on how and why you will succeed and what makes you different from your competitors.
The strategy statement is a hypothesis of the means by which strategic goals i.e., sustainable growth, are achieved.
[TBD]
Strategy Hierarchy Goals Model
The logical view model of strategy is a goals model of the vision, mission, and desired outcomes the organization should achieve for a given chosen strategy. The model defines an integrated hierarchy of goals models representing vision, mission, strategic goals - corporate, business, and functional. The strategic goals define expected outcomes or results the organization wants to change to better meet the organization's mission. The strategic goals correspond to the various levels/layers at which strategy concept exists in the organization i.e., corporate, business, and functional levels. The strategy concept at each layer is the means of achieving the results defined by the strategic goals for that layer e.g., corporate strategy, business strategy, and functional strategy respectively.
Creating integrated goal models of corporate and business strategy collectively define the organization's strategic direction and intent in terms of the outcomes, achievements, or goals a business wishes to achieve over a specific time-frame..
The Strategy Formulation Logic Model is a visual representation, a road map, which shows the logical relationships among the various elements of a layered model of the concept of strategy. The intended and desired outcomes are represented as goals. A goal is a broad/general statement about intended state of the world we want to bring about.
A logic model of the strategy provides an explicit visual representation of it's constituent elements and their relationships to each other, and to the intended and desired outcomes to be achieved.
Goals and objectives provide the milestones for measuring the success of the strategy in achieving the mission and vision. Goals are statements of what needs to be done to implement the strategy. Objectives are specific milestones for meeting a specified goal. A strategy has to be sound, implemented and executed to have value.
Benefits
The explicit visual model of strategy makes the concept easy to grasp, and enables the organization to work out a shared understanding of the strategy. This helps managers clarify their thoughts and build consensus on the company's strategy; ensuring strategy determination does not degenerate into solemn recording of platitudes, useless for building consensus. The visual model also satisfies the needs of employees and stakeholders that cooperate to keep the organization alive and successful.
Strategy Evaluation
Strategy acceptability evaluation is based on soundness of the strategy, and a set of selection criteria that ensures the chosen strategies will be acceptable to stakeholders.
The soundness criteria involves assuring that
The acceptability criteria may include the following: Does it fit with the values of the company and the employees? Is the strategy acceptable to the Board, key staff, and other stakeholders? A viable strategy is defined in terms of the degree to which the strategy meets those criteria.
[TBD]
Strategy Implementation
Strategy implementation is an organizing function of the strategic management process. It is concerned with determining the resources and capabilities required by the organization to make the strategy work as intended. Strategy implementation is about investment decisions and plans to build a capable organization that can make the formulated strategy work as intended. Strategy Implementation process involves planning for acquisition of resources, and /or development of appropriate organizational capabilities to strengthen existing organizational capabilities and competencies, or building new organizational capabilities to improve the organization's strategic capability.
Organizational capabilities refer to a business's ability to successfully employ competitive strategies that allows it to survive and increase its value overtime. Organization capability and culture are intangible, soft assets not directly visible to the organization. They are managed through the hard disciplines that shape them, such as: organization structure, decision rights, talent, management systems, and measures and incentives.
[TBD]
A business can improve its strategic capability by strengthening its organizational capabilities and resources, enabling it to better perform its strategic management functions in tandem to its operations management functions. Those functions involve a number of different decision-making approaches. Most managers face difficult challenges with strategic decisions - decisions with consequences for the performance (sustainable growth and profitability) of the company.
[TBD]
Planning Change and Implementation
Planning involves thinking strategically first, then applying that thought to actionable implementation decisions. Changes in strategic direction do not occur automatically; operations plans must be established to make a strategy work as intended. There are three (3) types of plans generated during the implementation phase;
Tactical planning is intermediate-range (one to three years) planning that is designed to develop relatively concrete and specific means to implement the strategic plan. Middle-level managers often engage in tactical planning. Operational planning generally assumes the existence of organization-wide or sub-unit goals and objectives and specifies ways to achieve them. Operational planning is short-range (less than a year) planning that is designed to develop specific action steps that support the strategic and tactical plans.
Organization Operating Model
[TBD]
Strategic engine focuses on the creation, evolution and control of the means - strategy - by which organizations achieve mission goals and objectives. A valid strategy for an organization can gain extraordinary results for an organization with an average general level of competence and leadership. Most managers in organizations have difficulty developing valid strategy statements without the determination process degenerating into solemn recording of platitudes, and trappings of strategy which is useless for either clarification of the direction or achievement of consensus among managers.
[TBD]
Effective implementation is affected by factors such as: strategy development, environmental uncertainty, organizational structure, organizational culture, leadership, operational planning, resource allocation, communication, people, control and outcome.
[TBD]
The Strategy Implementation model is logic model of the organization is comprised of the following elements structure, culture, capabilities, positions and roles, and how they relate to each other and contribute to the organization as system. The model also includes the initiatives or programs that change and enhance the the capabilities or culture and their relationships to intended/desired outcomes represented as goals.
[TBD]
The operations plan brings everything together in a business. This is an area of strategic thinking that looks at ways to use resources, staff, and technology.
Some examples include thr following:
[TBD]
Strategy formulation is one of three (3) stages in the systematic discipline of strategic management including strategy implementation and execution, and strategy evaluation and control. It involves the process of determining and establishing the goals, mission, and objectives of an organization, and identifying the appropriate and best courses or plans of action among all available alternative strategies/strategic options to achieve them.
Strategy formulation is concerned with creating the framework which guides strategic decision-making in the specific courses of action to follow, or establishing the confines on how to act in order to achieve a desired end - the organizational goals.
Strategy Content Model
Strategy Dynamic Model
Model-based approach to strategy design and evaluation involves developing an explicit dynamic model of the organization and strategy. The dynamic model of strategy is a goals model of the aspects of strategy. The model defines an integrated hierarchy of the different levels of strategy through the corresponding goals models for each level, as well as goals models for the organization's mission and vision. The strategic goals define expected outcomes or results the organization wants to change to better meet the organization's mission. The strategic goals correspond to the various levels/layers at which strategy concept exists in the organization i.e., corporate, business, and functional levels. The strategy concept at each layer is the means of achieving the results defined by the strategic goals for that layer e.g., corporate strategy, business strategy, and functional strategy respectively.
Strategy implementation is an organizing function of the strategic management process. It is concerned with determining the resources and capabilities required by the organization to make the strategy work as intended. Strategy implementation is about investment decisions and plans to build a capable organization that can make the formulated strategy work as intended. Strategy Implementation process involves planning for acquisition of resources, and /or development of appropriate organizational capabilities to strengthen existing organizational capabilities and competencies, or building new organizational capabilities to improve the organization's strategic capability.
Organizational capabilities refer to a business's ability to successfully employ competitive strategies that allows it to survive and increase its value overtime. Organization capability and culture are intangible, soft assets not directly visible to the organization. They are managed through the hard disciplines that shape them, such as: organization structure, decision rights, talent, management systems, and measures and incentives.
[TBD]
A business can improve its strategic capability by strengthening its organizational capabilities and resources, enabling it to better perform its strategic management functions in tandem to its operations management functions. Those functions involve a number of different decision-making approaches. Most managers face difficult challenges with strategic decisions - decisions with consequences for the performance (sustainable growth and profitability) of the company.
[TBD]
Planning Change and Implementation
Planning involves thinking strategically first, then applying that thought to actionable implementation decisions. Changes in strategic direction do not occur automatically; operations plans must be established to make a strategy work as intended. There are three (3) types of plans generated during the implementation phase;
- Plan of Action - This involves the definition of objectives, the timing of strategy, the formulation of sub-strategies relating to markets, production, finance, distribution, pricing, R&D, investment, and personnel placement.
- Plan of Implementation - This deals with organizational design changes and structural modifications, motivational plans, reward and punishment systems, leadership style, and control and information systems.
- Plan of Policies - This covers changes in values, rules, policies, and procedures.
Tactical planning is intermediate-range (one to three years) planning that is designed to develop relatively concrete and specific means to implement the strategic plan. Middle-level managers often engage in tactical planning. Operational planning generally assumes the existence of organization-wide or sub-unit goals and objectives and specifies ways to achieve them. Operational planning is short-range (less than a year) planning that is designed to develop specific action steps that support the strategic and tactical plans.
Organization Operating Model
[TBD]
Strategic engine focuses on the creation, evolution and control of the means - strategy - by which organizations achieve mission goals and objectives. A valid strategy for an organization can gain extraordinary results for an organization with an average general level of competence and leadership. Most managers in organizations have difficulty developing valid strategy statements without the determination process degenerating into solemn recording of platitudes, and trappings of strategy which is useless for either clarification of the direction or achievement of consensus among managers.
[TBD]
Effective implementation is affected by factors such as: strategy development, environmental uncertainty, organizational structure, organizational culture, leadership, operational planning, resource allocation, communication, people, control and outcome.
[TBD]
The Strategy Implementation model is logic model of the organization is comprised of the following elements structure, culture, capabilities, positions and roles, and how they relate to each other and contribute to the organization as system. The model also includes the initiatives or programs that change and enhance the the capabilities or culture and their relationships to intended/desired outcomes represented as goals.
[TBD]
The operations plan brings everything together in a business. This is an area of strategic thinking that looks at ways to use resources, staff, and technology.
Some examples include thr following:
- Customer Retention Management Software - This improves the sales and fulfillment process and a part of broad-based operational planning. The software helps sales staff track the sales process from prospect to closed deal. It then moves the process to fulfillment where the order is prepared for delivery.
- Quality Management - Quality management tools can be used by strategic thinkers as a central component of operational plan.
[TBD]
Strategy formulation is one of three (3) stages in the systematic discipline of strategic management including strategy implementation and execution, and strategy evaluation and control. It involves the process of determining and establishing the goals, mission, and objectives of an organization, and identifying the appropriate and best courses or plans of action among all available alternative strategies/strategic options to achieve them.
Strategy formulation is concerned with creating the framework which guides strategic decision-making in the specific courses of action to follow, or establishing the confines on how to act in order to achieve a desired end - the organizational goals.
Strategy Content Model
Strategy Dynamic Model
Model-based approach to strategy design and evaluation involves developing an explicit dynamic model of the organization and strategy. The dynamic model of strategy is a goals model of the aspects of strategy. The model defines an integrated hierarchy of the different levels of strategy through the corresponding goals models for each level, as well as goals models for the organization's mission and vision. The strategic goals define expected outcomes or results the organization wants to change to better meet the organization's mission. The strategic goals correspond to the various levels/layers at which strategy concept exists in the organization i.e., corporate, business, and functional levels. The strategy concept at each layer is the means of achieving the results defined by the strategic goals for that layer e.g., corporate strategy, business strategy, and functional strategy respectively.
Strategy Execution Model
Execution is a function of the strategic management process, and it occurs within the context of strategy implementation. It is concerned with managing initiatives - this is where strategy is translated into practice or remains on paper - and building adequate organization strategic capability.
Strategy execution is about how decisions take place within an organizational context of power, culture, leadership and ability to manage change. This requires the ability to understand and manage the interactions among those execution 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.
[TBD]
Operating Model
The operating model is an abstract representation of how an organization operates across process, organization structure, partner network, technology domains in order to deliver value defined by the organization in scope. The Operating Model serves as a blueprint for how resources are organized and operated to get critical work done. It encompasses decisions around the shape and size of the business organization, where to draw the boundaries for each line of business, how people work together within and across these boundaries, how the corporate center will add value to the business units, and what norms and behaviors should be encouraged.
The Operating Model Component Elements:
The Operating Model is the result of the Operations Strategy, and is focused on how to best enable and implement the organization's strategy. Operations strategy defines through the Operating Model, an organization structure design on how an entire business will allocate its resources to support operations and its strategic goals.
[TBD]
Strategy execution depends on each member of the organization's daily tasks and decisions, so its vital that to ensure everyone understands not only the broader strategic goals, but how their individual responsibilities make achieving them possible.
Strategy execution is the continuous process of closing the gap between where the company is, and what the strategy calls for. Bringing the strategy "execution gap" may require addressing the shortcomings in the implementation and/or flawed execution plans. Technically, a strategy can never actually be fully implemented because every thing that was necessarily assumed when formulating the strategy - about customers, technology, regulation, labor market, competitors, and so on - is in a constant state of flux.
Model-Driven Execution
The Strategy Execution Model is an open, social systems model that captures the organization as system elements, their interactions (dynamic and static), and a state-space that captures the dynamic behavior and system properties.
In the traditional strategy execution, "Plan-then-Do" approach, the organization creates its best forecast of the future market and competitive landscape. Leadership then specifies a plan that it believes will position the company to win in this predicted future. This approach is prone to failure because in the today's fast-paced world, the "cone of uncertainty" surrounding future market and competitive conditions is too great for companies to prescribe every element of a multi-year strategy. An agile, test-and-learn approach is better suited to today's tumultuous environment.
[TBD]
Strategic capability refers to the organization's ability to harness all its skills, organizational capabilities, and resources in order to gain competitive advantage, and thus survive and increase its value over time. The focus of strategic capability is on the organization's assets, resources, market position in projecting how well it will be able to employ strategies in the future.
[TBD]
Successful strategy development and execution concerns balancing gut feel with in-depth situational analysis so that action is not delayed, but also focuses on areas of maximum impact.
[TBD]
Organizations must acquire the necessary organizational capabilities to better respond to changing environments in order to attain sustainable growth and profitability. Those required organizational capabilities include: accountability, leadership, coordination, strategic unity, and efficiency, in addition to talent.
Strategy Execution System Model
Effective strategy execution requires a systematic approach to exposing reality and acting on it. The organization's actions involve decisions made every day by employees acting, according to the information they have and their own self-interest, within the context of strategy implementation, and activities undertaken at all levels in the organization - top management, middle management, and front-line managers and workers - to turn implemented strategy into commercial/social success.
Strategy execution systems are social-technical systems that provide the framework that integrates the following elements:
Closing the strategy gap in organizations in today's world involves bridging the chasm that exists between great strategy, great execution, and great performance.
The execution system is a change management process model that integrates the series of integrated decisions/actions that take place over time, and inextricably changes the organization and its relationship with its environments. The change may be planned or emergent. Successful execution involves decisions about changes to strategy, structure, capabilities (organizational and individuals), and incentives, and involves coordination, information sharing, and controls that results in an organization's actual strategy.
[TBD]
Value Creating Strategy and Competitive Advantage
The competitive ability of a firm may be based on its capability to capitalize on opportunities and mitigate threats form external environment factors (top-down) or leverage its strengths while managing its weaknesses (bottom-up) approaches to create sustainable competitive advantage and add value to the organization.
Operations Strategy can be market-driven (top down), market-driving (bottom up) or both. Businesses must analyze markets before they can develop an operations strategy.They need to agree on the current and future markets in which to compete, and determine the known or anticipated order-winners and qualifiers within these markets.
[TBD]
Operations Management
Operations Management involves administrative and management process focused on operational control of the organization's capacity to efficiently carry out the tasks set forth by strategic and middle management decisions and decision-makers. Operations management focuses on how to best use the organizations production resources, capabilities and competencies to create and deliver value to customers.
Operations system is the joint configuration of resources and processes with the resulting competencies ...
Operations management focuses on the control of the means - processes and resources - by which organizations create and deliver value
It involves structured decision-making, concerned with how efficiently and effectively resources are utilized and how well operations units are performing. Operations management takes place within the context of broad policies and objectives set out by strategic decision-making.
Operations Management involves administrative and strategic decision-making processes focused on Operations Strategy design, Operations Systems design, operations process design and operations control systems design.
Execution is a function of the strategic management process, and it occurs within the context of strategy implementation. It is concerned with managing initiatives - this is where strategy is translated into practice or remains on paper - and building adequate organization strategic capability.
Strategy execution is about how decisions take place within an organizational context of power, culture, leadership and ability to manage change. This requires the ability to understand and manage the interactions among those execution 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.
[TBD]
Operating Model
The operating model is an abstract representation of how an organization operates across process, organization structure, partner network, technology domains in order to deliver value defined by the organization in scope. The Operating Model serves as a blueprint for how resources are organized and operated to get critical work done. It encompasses decisions around the shape and size of the business organization, where to draw the boundaries for each line of business, how people work together within and across these boundaries, how the corporate center will add value to the business units, and what norms and behaviors should be encouraged.
The Operating Model Component Elements:
- Structure - This defines the appropriate boundaries for lines of business and shared services, centers of expertise, and other coordinating mechanisms that allow a company to leverage scale and expertise. The structure also specifies the size and shape of the organization with indicative resource levels and locations. Organizations are composed of interrelated (sub) organization units serving as specialized function, departments, divisions, geographic locations, etc. The organization unit is conceptualized as a social system - complexes of people and/or groups that according to commonly agreed rules and procedures strive to realize one or more preset objectives. Typical functions in a business organization may include Finance, Marketing and Sales, Human Resources, Operations, etc. A Business organization is a dynamic social system in that it has a purpose and is greater than the sum of its parts. Essentially, you can think of this high level organizational chart as the "hardware" of the operating model with the next four dimensions (Accountability, Governance, Culture, and Capabilities) serving as the "software" that makes the "hardware" run. The organization structure design focuses on enabling effective management of complexity, coordination and control of organizational behavior. This is critical as the decision rights cascade grows, because the structure and operating principles as well as governance of the organization becomes more complex and critical to manage.
- Accountability - This describes the roles and responsibilities of the main organization 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 reward framework linked to accountability reinforces strong execution.
- Governance - Governance and behavior refers to executive forums and management processes that yield high-quality decisions on strategies, priorities, resource allocation and business performance management. A management dashboard with the key metrics keeps the focus on the company's top priorities.
- Culture and Values (Ways of working) - This describes the expected cultural norms for how people collaborate within and across functions or teams. 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, visions, norms, working language, systems, symbols, beliefs and habits. Culture manifests itself in the particular way things are done in an organization. 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. Organizational culture can be supportive of the following: Learning and Development (Growth), Participatory Decision-Making, Power Sharing, Support and Collaboration,
- Capabilities - This refers to how the organization combines people, processes, and technology in a repeatable way to deliver desired outcomes.
The Operating Model is the result of the Operations Strategy, and is focused on how to best enable and implement the organization's strategy. Operations strategy defines through the Operating Model, an organization structure design on how an entire business will allocate its resources to support operations and its strategic goals.
[TBD]
Strategy execution depends on each member of the organization's daily tasks and decisions, so its vital that to ensure everyone understands not only the broader strategic goals, but how their individual responsibilities make achieving them possible.
Strategy execution is the continuous process of closing the gap between where the company is, and what the strategy calls for. Bringing the strategy "execution gap" may require addressing the shortcomings in the implementation and/or flawed execution plans. Technically, a strategy can never actually be fully implemented because every thing that was necessarily assumed when formulating the strategy - about customers, technology, regulation, labor market, competitors, and so on - is in a constant state of flux.
Model-Driven Execution
The Strategy Execution Model is an open, social systems model that captures the organization as system elements, their interactions (dynamic and static), and a state-space that captures the dynamic behavior and system properties.
In the traditional strategy execution, "Plan-then-Do" approach, the organization creates its best forecast of the future market and competitive landscape. Leadership then specifies a plan that it believes will position the company to win in this predicted future. This approach is prone to failure because in the today's fast-paced world, the "cone of uncertainty" surrounding future market and competitive conditions is too great for companies to prescribe every element of a multi-year strategy. An agile, test-and-learn approach is better suited to today's tumultuous environment.
[TBD]
Strategic capability refers to the organization's ability to harness all its skills, organizational capabilities, and resources in order to gain competitive advantage, and thus survive and increase its value over time. The focus of strategic capability is on the organization's assets, resources, market position in projecting how well it will be able to employ strategies in the future.
[TBD]
Successful strategy development and execution concerns balancing gut feel with in-depth situational analysis so that action is not delayed, but also focuses on areas of maximum impact.
[TBD]
Organizations must acquire the necessary organizational capabilities to better respond to changing environments in order to attain sustainable growth and profitability. Those required organizational capabilities include: accountability, leadership, coordination, strategic unity, and efficiency, in addition to talent.
Strategy Execution System Model
Effective strategy execution requires a systematic approach to exposing reality and acting on it. The organization's actions involve decisions made every day by employees acting, according to the information they have and their own self-interest, within the context of strategy implementation, and activities undertaken at all levels in the organization - top management, middle management, and front-line managers and workers - to turn implemented strategy into commercial/social success.
Strategy execution systems are social-technical systems that provide the framework that integrates the following elements:
- Strategic decisions and actions taken resulting from decisions.
- Operations management decisions and activities performed resulting from decisions.
- Observing the outputs and outcomes of strategic actions through reporting and monitoring environment changes.
- Diagnosing the issues resulting from the patterns of organization behavior effected by organization outputs.
- Timely adaptation to changes in environment and timely response to any identified opportunities or threats to achieving the mission objectives and strategic goals.
Closing the strategy gap in organizations in today's world involves bridging the chasm that exists between great strategy, great execution, and great performance.
The execution system is a change management process model that integrates the series of integrated decisions/actions that take place over time, and inextricably changes the organization and its relationship with its environments. The change may be planned or emergent. Successful execution involves decisions about changes to strategy, structure, capabilities (organizational and individuals), and incentives, and involves coordination, information sharing, and controls that results in an organization's actual strategy.
[TBD]
Value Creating Strategy and Competitive Advantage
The competitive ability of a firm may be based on its capability to capitalize on opportunities and mitigate threats form external environment factors (top-down) or leverage its strengths while managing its weaknesses (bottom-up) approaches to create sustainable competitive advantage and add value to the organization.
- Top-Down: A top-down approach to operations strategy design involves senior management formally defining the mission, then progressively expanding this to give the corporate, business, and functional strategies. Once organizational purpose/mission, corporate strategy, business and competitive strategy, and values are clear, the organization can be structured in such a way that roles and functions are clearly defined and differentiated, lines of communications and accountability untangled, and decision-making procedures transparent and functional.
- Bottoms-Up: The actual business and corporate strategy eventually emerges over time from a bottom-up perspective as a result of the sum of the practical decisions made, and actions taken by managers in continually responding to actual conditions and problems as they arise in the organization. Operations strategy is the collective concrete actions chosen, mandated, or stimulated by corporate strategy
Operations Strategy can be market-driven (top down), market-driving (bottom up) or both. Businesses must analyze markets before they can develop an operations strategy.They need to agree on the current and future markets in which to compete, and determine the known or anticipated order-winners and qualifiers within these markets.
[TBD]
Operations Management
Operations Management involves administrative and management process focused on operational control of the organization's capacity to efficiently carry out the tasks set forth by strategic and middle management decisions and decision-makers. Operations management focuses on how to best use the organizations production resources, capabilities and competencies to create and deliver value to customers.
Operations system is the joint configuration of resources and processes with the resulting competencies ...
Operations management focuses on the control of the means - processes and resources - by which organizations create and deliver value
It involves structured decision-making, concerned with how efficiently and effectively resources are utilized and how well operations units are performing. Operations management takes place within the context of broad policies and objectives set out by strategic decision-making.
Operations Management involves administrative and strategic decision-making processes focused on Operations Strategy design, Operations Systems design, operations process design and operations control systems design.
- Operations Strategy design decisions are concerned with choices and commitment to organization performance and involve decisions on choices in operations infrastructure, facility - operations structure, performance objectives, and distinguishing competencies.
- Operations System for the organization's production unit - This is the joint configuration of resources and processes with the resulting competencies ...
- Tactical Decisions - Tactically, Operations Management focuses on utilizing the Operations System to carefully manage the processes and resources, of the organization to produce and distribute products and services to customers which in turn realize strategic decisions to capitalize on opportunities.
- Operational Control Decisions - Operational control decisions involve determining which organization units will carry out the tasks, establishing criteria for completion, resource utilization, and evaluating outputs. Operations decisions, unlike strategic decisions, are repetitive, routine and involve definite procedure for handling so they do not have to be treated each time as if they were new.
Production System
[TBD]
Operations Strategy can be market-driven (top down), market-driving (bottom up) or both. Businesses must analyze markets before they can develop an operations strategy.They need to agree on the current and future markets in which to compete, and determine the known or anticipated order-winners and qualifiers within these markets.
Operations Management
Operations Management involves administrative and management process focused on operational control of the organization's capacity to efficiently carry out the tasks set forth by strategic and middle management decisions and decision-makers. Operations management focuses on how to best use the organizations production resources, capabilities and competencies to create and deliver value to customers.
Operations system is the joint configuration of resources and processes with the resulting competencies ...
Operations management focuses on the control of the means - processes and resources - by which organizations create and deliver value
It involves structured decision-making, concerned with how efficiently and effectively resources are utilized and how well operations units are performing. Operations management takes place within the context of broad policies and objectives set out by strategic decision-making.
Operations Management involves administrative and strategic decision-making processes focused on Operations Strategy design, Operations Systems design, operations process design and operations control systems design.
[TBD]
Operations Strategy can be market-driven (top down), market-driving (bottom up) or both. Businesses must analyze markets before they can develop an operations strategy.They need to agree on the current and future markets in which to compete, and determine the known or anticipated order-winners and qualifiers within these markets.
Operations Management
Operations Management involves administrative and management process focused on operational control of the organization's capacity to efficiently carry out the tasks set forth by strategic and middle management decisions and decision-makers. Operations management focuses on how to best use the organizations production resources, capabilities and competencies to create and deliver value to customers.
Operations system is the joint configuration of resources and processes with the resulting competencies ...
Operations management focuses on the control of the means - processes and resources - by which organizations create and deliver value
It involves structured decision-making, concerned with how efficiently and effectively resources are utilized and how well operations units are performing. Operations management takes place within the context of broad policies and objectives set out by strategic decision-making.
Operations Management involves administrative and strategic decision-making processes focused on Operations Strategy design, Operations Systems design, operations process design and operations control systems design.
- Operations Strategy design decisions are concerned with choices and commitment to organization operations infrastructure, operations structure design.
- Operations System for the organization's production unit - This is the joint configuration of resources and processes with the resulting competencies ...
- Tactical Decisions - Tactically, Operations Management focuses on utilizing the Operations System to carefully manage the processes and resources, of the organization to produce and distribute products and services to customers which in turn realize strategic decisions to capitalize on opportunities.
- Operational Control Decisions - Operational control decisions involve determining which organization units will carry out the tasks, establishing criteria for completion, resource utilization, and evaluating outputs. Operations decisions, unlike strategic decisions, are repetitive, routine and involve definite procedure for handling so they do not have to be treated each time as if they were new.
Copyright Enterprise Design Labs 2005 - 2018