MAKing Sound strategy happen through Effective Implementation
Strategic Management
Strategic Management is a managerial process consisting of a set of managerial tasks - managerial decisions and actions - in managing a strategy through its life cycle stages. To be effective, strategic management requires that management possess the capacity to plan, organize, direct, monitor and control strategic decision-making and actions in adding value for customers, owners, and employees and doing its best work while avoiding misfires. Effective strategic management is a disciplined effort involving strategic decisions, judgment, and actions that shape the nature and direction of an organization's activities in the formulation, implementation and execution of strategies to achieve organization's mission and vision..
Organization Goals
The organizational goals are strategic intentions that an organization's leadership team establishes to outline expected future outcomes towards which present efforts are directed. These goals not only drive the organization as whole, but also guide employees' efforts towards achieving the company's vision. There are two (2) types of organizational goals, namely:
Organization goals are the result of strategic planning - an organization's process of defining its direction, developing a strategy, and documenting a plan to pursue that strategy. The Operative Goal concept is a layered goals model comprising three (3) levels:
An organizational goals model of the organization's strategy is a layered model of a hierarchy of goals at each layer/level with strategic goals at the top; tactical goals, created and cascaded beginning from the strategic goals to functional areas/departments, it the next layer; and operational goals in the bottom layer. The model allows the organization to capture the goals resulting from the goal setting process such as the company level goals, and the set of goals created and cascaded beginning from the company goals to departments and organization units that support the organization top level goals. The operational goals capture process and individual employee goals created to support department and unit level goals.
Benefits of Goals in Modeling
Goal models provides a consistent method reasoning as well as performance evaluation; the benefits of goals in modeling include:
Strategic Management is a managerial process consisting of a set of managerial tasks - managerial decisions and actions - in managing a strategy through its life cycle stages. To be effective, strategic management requires that management possess the capacity to plan, organize, direct, monitor and control strategic decision-making and actions in adding value for customers, owners, and employees and doing its best work while avoiding misfires. Effective strategic management is a disciplined effort involving strategic decisions, judgment, and actions that shape the nature and direction of an organization's activities in the formulation, implementation and execution of strategies to achieve organization's mission and vision..
Organization Goals
The organizational goals are strategic intentions that an organization's leadership team establishes to outline expected future outcomes towards which present efforts are directed. These goals not only drive the organization as whole, but also guide employees' efforts towards achieving the company's vision. There are two (2) types of organizational goals, namely:
- Official Goals - These are the formally stated goals of an organization and are described in its public statements such as corporate charter, mission statements and annual reports. Official goals help build the organization's public image and reputation. Official goals help communicate the general purpose of the organization and they describe what the organization would like achieve.
- Operative Goals - These goals are the concrete steps an organization plans to take to achieve its vision and purpose. They are the outcomes the organization actually seeks to attain through its operating policies and undertakings. These goals are derived from a strategic planning initiative. These goals describe what the organization needs to do to successfully achieve their mission.
Organization goals are the result of strategic planning - an organization's process of defining its direction, developing a strategy, and documenting a plan to pursue that strategy. The Operative Goal concept is a layered goals model comprising three (3) levels:
- Strategic Goals - These are broad long-term goals defined by the senior leadership and executive management toguide the direction of the company.
- Tactical Goals - These are goals at the functional/department levels and cover the organizatinal methods - big projects, activities, and programs that move the organization toward achieving its mission.
- Operational Goals - These are goals set to determine what business processes can help realize the operative goals. They define the business processes/activities needed to achieve the operative goals. These goals help determine the productivity, profitability and quality goals. Productivity goals focus on improving the way the product is created or delivered.
An organizational goals model of the organization's strategy is a layered model of a hierarchy of goals at each layer/level with strategic goals at the top; tactical goals, created and cascaded beginning from the strategic goals to functional areas/departments, it the next layer; and operational goals in the bottom layer. The model allows the organization to capture the goals resulting from the goal setting process such as the company level goals, and the set of goals created and cascaded beginning from the company goals to departments and organization units that support the organization top level goals. The operational goals capture process and individual employee goals created to support department and unit level goals.
Benefits of Goals in Modeling
Goal models provides a consistent method reasoning as well as performance evaluation; the benefits of goals in modeling include:
- Providing guidelines for action
- Directs and channels employee efforts
- Justfies a company's activities
- Identifies development opportunities
- Defines performance standards
- Allocates resources
- Defines standards of performance
- Provides constraints and parameters
- Provides incentives and a source of motivation.
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Strategy Formulation
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Implementation
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Execution
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Evaluation and Control
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Environments' Factors
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Strategy Formulation
Strategy formulation is a stage in the strategic planning process of strategic management involved in defining and selecting strategic alternatives to be implemented and executed. Management develops strategies to guide how the organization conducts its business and how it will achieve its target objectives; and to deal with those identified strategic issues facing the company. Successful strategy formulation produces a clear set of recommendations, with supporting justifications, that revise as necessary the organization's mission, its supply of resources and objectives (in meeting the expectations of the stakeholders).
Strategy-Making Process - Formulation of Intended Strategy
Strategy formulation is primarily an intellectual and creative act involving developing solutions to known strategic problems identified and defined through diagnosis of strategic issues and events. The process for formulating deliberate strategy follows the following steps:
Crafting Strategy Process
Strategy -making brings into play the critical managerial issue of how to achieve the targeted results in light of the organization's situation and prospects. Objectives are the "ends," and strategy is the "means" of achieving them. In effect, strategy is the pattern of actions managers employ to achieve strategic and financial performance targets.
Strategies are developed for each goal. Ideally, each strategy represents a single, distinct approach to achieving all or part of the goal. Like goals, strategies are directional. For example, a strategy for the "Raise Revenue" goal might be to "Increase Membership." While goals and strategies are directional, objectives are specific, measurable actions.
Strategy formulation is a stage in the strategic planning process of strategic management involved in defining and selecting strategic alternatives to be implemented and executed. Management develops strategies to guide how the organization conducts its business and how it will achieve its target objectives; and to deal with those identified strategic issues facing the company. Successful strategy formulation produces a clear set of recommendations, with supporting justifications, that revise as necessary the organization's mission, its supply of resources and objectives (in meeting the expectations of the stakeholders).
Strategy-Making Process - Formulation of Intended Strategy
Strategy formulation is primarily an intellectual and creative act involving developing solutions to known strategic problems identified and defined through diagnosis of strategic issues and events. The process for formulating deliberate strategy follows the following steps:
- Establishing Direction and Purpose - Developing a strategic vision and business mission. Senior Management deciding what business the company will be in and forming a strategic vision of where the organization needs to be headed - in effect, setting the organization with a sense of purpose, providing long-term direction, and establishing a clear mission to be achieved. Management's vision of what the organization seeks to do and to become is commonly termed the organization's "mission." A mission statement establishes the organization's future course and outlines "who we are, what we do and where we are going". The vision clarifies the long-term future direction of the company and its strategic intent.
- Setting Organizational Goals and Strategic Objectives - The purpose of setting strategic objectives involves setting organizational "operative" goals that convert managerial statements of business mission and company direction (strategic vision) into goals. The organizational goals are organization status statements which describe the organization's direction assuming it is successful in achieving its mission. There are several areas in which most organizations establish goals including: Market Share, Productivity, Profitability, Innovation, Resources, Management Performance, Employees Performance, and Social Responsibility.
- Setting Strategic Objectives - Strategic objectives serve as yardsticks for tracking an organization's performance and progress. A system of measures comprising two (2) types of performance yardsticks - Financial and Non-Financial Objectives/Measures - enables an organization to better track its performance. The objectives set must ideally embrace a time horizon that is both short-term and long-term. Short-term objectives spell out the immediate improvements and outcomes desired by management. These measures make it explicit that management not only must deliver good financial performance but also must deliver on strengthening the organization's long-term business and competitive positions.
- Gap Analysis - Strategy gap analysis looks at the company's strategy and is closely tied to bench marking (comparing yourself to competitors or best practices). Strategy gap is the gap between the current performance of an organization and its desired performance as expressed in its mission, objectives, goals and strategy for achieving them. For example, a company that wants to grow into becoming a larger company would first perform market gap analysis to find out what current competitors don't do, and markets they don't serve then they will perform strategic gap analysis that looks at their current skills they lack, if their current location is right what kind of advertising they need and what resources they would need to acquire. The Gap Analysis, as part of strategic planning, can look for strategic issues and adjust the strategy to better fit the situation, or realign the company's processes to align with the strategy.
- Review SWOT Analysis - This involves reviewing the information gleaned from completing the analysis to establish the strengths, weaknesses, opportunities and threats facing the organization. SWOT analysis informs the decisions determining what strengths - resources the business currently has - that can help reach the defined goals and objectives.
- Crafting Strategy - Crafting the strategy brings into play the critical managerial issue of how to achieve the targeted results in light of the organization's situation and prospects. Objectives are the "ends," and strategy is the "means" of achieving them. In effect, strategy is the pattern of actions managers employ to achieve strategic and financial performance targets.
Crafting Strategy Process
Strategy -making brings into play the critical managerial issue of how to achieve the targeted results in light of the organization's situation and prospects. Objectives are the "ends," and strategy is the "means" of achieving them. In effect, strategy is the pattern of actions managers employ to achieve strategic and financial performance targets.
- Strategic Issues Diagnosis and Identification - Strategic issues are fundamental policy questions affecting the organization's mandates, mission and values, product-mix/service-mix, clients, users or payers, cost, financing,management or organization design. Identify and resolve issues facing the organization and prioritize them relative to the relevance and importance to success. In this step the organization must establish target values for some of the organization's objectives.
- Define or review Values, Community vision, and Principles - Every organization has values, and these values should be coherent with the strategy. Values assessment involves looking into the personal values of the members of the organization, organization values, and the organization's operating philosophy. The Core Values are the essence of the organization's corporate culture and the expression of its "personality"; they are the strong enduring beliefs and principles that the company uses as a foundation for its decisions.
- Strategic Options Development- This involves analyzing strategic issues and crafting strategies to respond to identified problems in areas such as corporate strategy, business/competitive strategies, and possibly operations strategies. Corporate strategy is about domain selection; and includes decisions and choices about the following: (1) What should be the capabilities that distinguish the company? (2) What should be the company's comparative advantage in adding value to its individual businesses? (3) What businesses should the company be in?. These are the fundamental choices that a corporate strategy comprises and they frame and guide all the decisions that a company's corporate executives, functions, and staff make every day. Business/competitive strategy is comprised of answers to fundamental questions such as: (1) Who should be the customers that define our target market? (2) What should be the value proposition that differentiates our products and services with those customers? (3) What should be the capabilities that make our business better than any other in delivering that value proposition? These choices comprising the business strategy should drive the decisions of business units' management teams, functions, and staff that make every day decisions on pricing, R&D, where to manufacture, etc. Options development involves identification of practical and creative alternatives for resolving identified strategic issues. For each of the alternatives, enumerate the barriers to achieving the alternative. Prepare proposals for achieving the alternatives subject to the barriers.
- Choice of Strategy - Selection of strategic options based on evaluation criteria that look at factors such as described in the evaluation section below. Strategic choice refers to the decision-making process of selecting strategic option from a number of alternatives for implementation. Selecting a given approach from "approaches" (or means) among all options and choices that can be made at a given point in time; that "approach" becomes the "strategy" (strategic option). Every decision, every action taken from then on, will be based on (or aligned with) that "strategy". Strategic choice is a set of related options (typically combining options for products/markets and services, and resources) that form a potential strategy. The simplest form of choice is therefore between taking an option or not taking it - doing it or not doing it. Most choices have more shades of possibility than this. An option is a course of action that it appears possible to take. A strategic option is a set of of related options from a options network that address a strategic issue.
Strategies are developed for each goal. Ideally, each strategy represents a single, distinct approach to achieving all or part of the goal. Like goals, strategies are directional. For example, a strategy for the "Raise Revenue" goal might be to "Increase Membership." While goals and strategies are directional, objectives are specific, measurable actions.
Strategy Model
A company's strategy is typically a combination of (1) planned - deliberate and purposeful actions and (2) emergent - as-needed reactions to unanticipated developments and fresh competitive pressures. Strategy is the scope and direction of the organization over the long term which achieves advantage for the organization through its configuration of resources, within a changing environment, to meet the needs of markets and to fulfill stakeholders' expectations" (Johnson & Scholes, 2002). Strategies are the statements of how an organization is going to achieve its mission and realize its vision through a set of strategic decisions and actions.
The strategy model is a goals model comprising organization goals and related performance system goals and KPIs.
A company's strategy concerns how to:
The how of strategy tend to be company-specific, customized to a company's own situation and performance objectives.
Strategic Goals
Strategic goals are goals the organization is trying to achieve in a certain period of time, at some future date through solutions to identified strategic issues. Strategic goals are set by and for top management and focus on the organization as a whole. Strategic goals are general statements of what needs to be accomplished to implement a strategy, and may include for example; growing faster than the industry average, overtaking key competitors on product quality, better customer service or increasing market share. Strategic goals define a place - destination or focus area - where the organization wants to be, and they are comprised of corporate level strategic goals, and business level strategic goals.
Corporate Strategic Goals
Corporate level strategic goals concern strategic positioning and may include for example:
Business Strategic Goals
The strategic business goals are outcomes desired by the owners and top management and whose achievement is deemed most important to the current and future health and performance of the business organization. The outcomes are the difference the products and services, the business offers to customers, make- benefits the customer receives from the products/services offered. Identifying outcomes starts with understanding customers' needs - their challenges, issues, constraints, and priorities. Outputs are the important products, services, profits, an revenues: the What. Outcomes create meanings, relationships, and differences: the Why. The attainment of each goal may require a number of objectives to be reached.
Strategic Objectives
Strategic objectives are measurable results of the steps/actions in an action plan that an organization takes to achieve the (intended) strategy. The objectives detail what will be accomplished in relation to planning, policy, and investment considerations based on the the stated strategic goals. Objectives provide specific milestones with specific timeline for achieving a goal. The key strategic business objectives for example for a barbershop may include:
A company's strategy is typically a combination of (1) planned - deliberate and purposeful actions and (2) emergent - as-needed reactions to unanticipated developments and fresh competitive pressures. Strategy is the scope and direction of the organization over the long term which achieves advantage for the organization through its configuration of resources, within a changing environment, to meet the needs of markets and to fulfill stakeholders' expectations" (Johnson & Scholes, 2002). Strategies are the statements of how an organization is going to achieve its mission and realize its vision through a set of strategic decisions and actions.
The strategy model is a goals model comprising organization goals and related performance system goals and KPIs.
A company's strategy concerns how to:
- grow the business,
- satisfy customers,
- out-compete rivals,
- respond to changing market conditions,
- manage each functional piece of business,
- achieve financial and strategic objectives.
The how of strategy tend to be company-specific, customized to a company's own situation and performance objectives.
Strategic Goals
Strategic goals are goals the organization is trying to achieve in a certain period of time, at some future date through solutions to identified strategic issues. Strategic goals are set by and for top management and focus on the organization as a whole. Strategic goals are general statements of what needs to be accomplished to implement a strategy, and may include for example; growing faster than the industry average, overtaking key competitors on product quality, better customer service or increasing market share. Strategic goals define a place - destination or focus area - where the organization wants to be, and they are comprised of corporate level strategic goals, and business level strategic goals.
Corporate Strategic Goals
Corporate level strategic goals concern strategic positioning and may include for example:
- Increased Profitability - To reach this goal, objectives could consist of increasing annual sales by 50%; reduce expense objectives such as controlling and cutting overhead experiences e,g., utility bills by 15%.
- Better Customer Service - This may include goals such as reducing complaints by 50% over one year; improve resolution times to customer complaints to a maximum of one business day; improve the substance of the resolution to complaints. To meet this customer service goals objectives could include providing better training for barbers, implement a policy where customers are guaranteed to receive a refund if they have a complaint by the quality of haircut/shave.
- Improved Staffing - This may include goals such as improved recruiting, retention, and labor cost management. To make the goal improve employee retention, for example, more specific, measure the current turnover rate, e.g., one employee in 3 leaves after three months; and decide to double this figure to six months. Objectives could include implementing a training program that details new-hire activities for the first 90 days on the job; implement one-on-one bi-weekly meetings with employees in an effort to build rapport and find out what's on their mind.
- Increase in growth - This may include goals such as growth in sales volume, growth in sales revenue, etc.
Business Strategic Goals
The strategic business goals are outcomes desired by the owners and top management and whose achievement is deemed most important to the current and future health and performance of the business organization. The outcomes are the difference the products and services, the business offers to customers, make- benefits the customer receives from the products/services offered. Identifying outcomes starts with understanding customers' needs - their challenges, issues, constraints, and priorities. Outputs are the important products, services, profits, an revenues: the What. Outcomes create meanings, relationships, and differences: the Why. The attainment of each goal may require a number of objectives to be reached.
Strategic Objectives
Strategic objectives are measurable results of the steps/actions in an action plan that an organization takes to achieve the (intended) strategy. The objectives detail what will be accomplished in relation to planning, policy, and investment considerations based on the the stated strategic goals. Objectives provide specific milestones with specific timeline for achieving a goal. The key strategic business objectives for example for a barbershop may include:
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.
Defining the objective, scope and competitive advantage requires trade-offs which are fundamental to strategy. The strategy statement is a hypothesis of the means by which strategic goals i.e., sustainable growth, are 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.
There are three (3) dimensions of strategy, from a strategy formulation perspective, that can be recognized in every real life strategy problem situation, namely: strategy process, strategy content, and the strategy context. Strategy process refers to the manner in which strategies come about. Strategy content is the actual strategy i.e., the action to be performed, and is a product of the strategy process. Context is the environment within which strategy operates and develops. It is the set of circumstances in and under which both strategy process and strategy content are determined. (DeWit & Meyer, 2004).
Evaluating Formulated Strategy
The evaluation is based on a set of selection criteria that ensures the chosen strategies will be effective. An effective strategy is defined in terms of the degree to which the strategy meets those criteria including:
The whole point about strategy is that the critical factors determining its quality are often not directly observable or simply measured; and by the time strategic opportunities/threats do directly affect operating results, it may well be too late for an effective response.
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. Objectives are the "ends," and strategy is the "means" of achieving them. 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 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.
Defining the objective, scope and competitive advantage requires trade-offs which are fundamental to strategy. The strategy statement is a hypothesis of the means by which strategic goals i.e., sustainable growth, are 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.
There are three (3) dimensions of strategy, from a strategy formulation perspective, that can be recognized in every real life strategy problem situation, namely: strategy process, strategy content, and the strategy context. Strategy process refers to the manner in which strategies come about. Strategy content is the actual strategy i.e., the action to be performed, and is a product of the strategy process. Context is the environment within which strategy operates and develops. It is the set of circumstances in and under which both strategy process and strategy content are determined. (DeWit & Meyer, 2004).
Evaluating Formulated Strategy
The evaluation is based on a set of selection criteria that ensures the chosen strategies will be effective. An effective strategy is defined in terms of the degree to which the strategy meets those criteria including:
- Consistency - The strategy must not represent mutually inconsistent goals and policies.
- Suitability (Appropriateness) - Is the strategy consistent with the organization's mission, values, and operating principles? Does it fit with the vision and mission?
- Consonance - The strategy must represent adaptive response to the external environment and to the critical changes occurring within it as defined by the SWOT Analysis information..
- Value - Will the strategy contribute to meeting agreed-upon goals?
- Advantage - The strategy must provide for the creation and/or maintenance of a competitive advantage in the selected areas of activity.
- Feasibility . Is the strategy practical, given personnel and financial resources and capacity? The strategy must neither overtax available resources not create unsolvable sub-problems.
- Acceptability - Does it fit with the values of the company and the employees? Is the strategy acceptable to the Board, key staff, and other stakeholders?
- Flexibility - Can it be adapted and changed as needed?
- Cost-Benefit - Is the strategy likely to lead to sufficient benefits to justify the costs in time and other resources?
- Timing - Can and should the organization implement this strategy at this time, given external factors and competing demands?
The whole point about strategy is that the critical factors determining its quality are often not directly observable or simply measured; and by the time strategic opportunities/threats do directly affect operating results, it may well be too late for an effective response.
Strategy Implementation
Strategy implementation is a stage in the strategic management process. It provides the connecting loop between strategy formulation and strategy execution and control. Strategy implementation is key to any organization's survival; and requires the collaboration of everyone inside the organization, and on many occasions parties outside the organization. It is a continuous process of closing the gap between where the company is, and what the future vision indicates it wants it to be with respect to corporate strategy choices - capabilities, enterprise advantage, and business portfolio it wants; and business and competitive strategy choices - customers, value proposition and skills it has chosen to have. 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. There will always be a gap between where the company is, and what its strategies call for.
Strategy implementation is the responsibility of top, middle and lower/line managers focused turning strategic plans into reality in order to achieve strategic objectives by building capacity through projects and programs to strengthen the organization and close the strategic gap there by enabling the organization to better deliver value to customers and meeting stakeholders expectations. Businesses may find that they have to perform further planning even during implementation.
Strategy Implementation - Process View
The strategy implementation is the process to implement the strategies, policies, programs and action plans that allows a firm to utilize its resources to take advantage of opportunities in the competitive environment. It consists of all the decisions and action, and plans required to turn strategic choices into reality, and requires competencies such as leadership skills, precision planning, organizing of resources and activities, as well as motivation to ensure people's commitment to the new strategy. The process is comprised of the following steps:
Step #1 - Evaluate and Communicate the Strategic Plan
Evaluate the strategic plan (strategic goals and objectives) and selected strategies with respect to the initiatives, budgets and performance objectives prior to distribution to areas of the organization responsible for implementation. The following are the sub-steps to be undertaken in this step.
Step #2 - Develop an Implementation Structure
Create a structure that will serve as a framework and guide the implementation and execution of strategies. The structure must be clearly defined with well established lines of authority and responsibility within the organization's "chain of command" structure. Each member of the organization must know who s/he is accountable to, and who s/he is responsible for. The development sub-steps include:
Step #3 - Develop an Implementation-Support Policies and programs
These are policies and procedures that would be employed in aid of strategy implementation. The policies help define the guidelines to how members of the organization should behave. This establishes the organizational culture - the overall atmosphere within the company, particularly with respect to its members.
Step #4 - Budgeting and Allocation of Resources
The focus of this step is to equip the managers, responsible for implementing strategy, with the tools and other capabilities to perform their tasks and functions. This step includes the following sub-steps:
Step #5 - Discharge of Functions and Activities
This step involves making the tactics operational and putting the strategies into action, aided by strategic leadership, utilization of participatory management and leadership styles. This involves actual performance of tasks and activities; as well as management providing leadership and controlling the performance of activities or tactics in various levels of the organization. Throughout this step, the organization should also ensure the following:
The results of accomplishments in this step #5 will be the input in the third stage of Strategic Management: "Strategy Evaluation"
Strategy implementation is a stage in the strategic management process. It provides the connecting loop between strategy formulation and strategy execution and control. Strategy implementation is key to any organization's survival; and requires the collaboration of everyone inside the organization, and on many occasions parties outside the organization. It is a continuous process of closing the gap between where the company is, and what the future vision indicates it wants it to be with respect to corporate strategy choices - capabilities, enterprise advantage, and business portfolio it wants; and business and competitive strategy choices - customers, value proposition and skills it has chosen to have. 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. There will always be a gap between where the company is, and what its strategies call for.
Strategy implementation is the responsibility of top, middle and lower/line managers focused turning strategic plans into reality in order to achieve strategic objectives by building capacity through projects and programs to strengthen the organization and close the strategic gap there by enabling the organization to better deliver value to customers and meeting stakeholders expectations. Businesses may find that they have to perform further planning even during implementation.
Strategy Implementation - Process View
The strategy implementation is the process to implement the strategies, policies, programs and action plans that allows a firm to utilize its resources to take advantage of opportunities in the competitive environment. It consists of all the decisions and action, and plans required to turn strategic choices into reality, and requires competencies such as leadership skills, precision planning, organizing of resources and activities, as well as motivation to ensure people's commitment to the new strategy. The process is comprised of the following steps:
Step #1 - Evaluate and Communicate the Strategic Plan
Evaluate the strategic plan (strategic goals and objectives) and selected strategies with respect to the initiatives, budgets and performance objectives prior to distribution to areas of the organization responsible for implementation. The following are the sub-steps to be undertaken in this step.
- Clarifying the organization's strategy - Usually, strategic choices selected for implementation are expressed as high-level statements that resonate with the board, and executive level management. Ensure the strategic choices are sound and described in statements that clearly communicate what top management wants and expects. The statements should be expressed in terms that middle-level and line management would understand; such as the products and services to offer and in which markets; what resources, capabilities, and competencies are needed to support these products and services; how to acquire or build these resources.
- Evaluate Strategic Plan and Choice - Evaluate the difference between the organization's current state/position and desired future state as defined by the strategic plan (identified in terms of goals and objectives, and strategic choices) to drive specific strategies and guide allocation of resources to close the gap and achieve the desired future state..
- Aligning the strategies with the initiatives - Evaluate the difference between the current position/state and desired future through gap analysis. Check the strategies to ensure they are following the same path leading to the mission and strategic goals of the organization.
- Aligning budgets to the annual goals and objectives - This involves conducting financial assessments to identify budgetary issues that could impact the attainment of objectives, and ensure the budget provides sufficient support for it. In the event that there are budgetary constraints or limitations, they must first be addressed before launching fully into implementation mode.
Step #2 - Develop an Implementation Structure
Create a structure that will serve as a framework and guide the implementation and execution of strategies. The structure must be clearly defined with well established lines of authority and responsibility within the organization's "chain of command" structure. Each member of the organization must know who s/he is accountable to, and who s/he is responsible for. The development sub-steps include:
- Establish a linkage or coordination mechanism between and among the various departments and their respective divisions and units. This is mainly for the purposes of facilitating the delegation of authority and responsibility.
- Formulate the work plans and procedures to be followed in the implementation of the tactics in the strategies.
- Determine the key managerial tasks and responsibilities to be performed and the qualifications required of the role who will perform them.
- Determine the key operational tasks and responsibilities to be performed, and the qualifications/role rtequired of the person who will perform them.
- Assign the tasks to the appropriate departments of the organization. Enacting the operations plan involves allocation of resources to carry out the actions in achieving the goals. The implementation of the Operational Plan requires management to regularly monitor achievement and exert control to reduce any variance from the plan
- Evaluate the current staffing structure, checking if you have enough manpower, and if they have the necessary skills and competencies to carry out the tasks. This may result in to some extent in reorganization or reshuffling of people. In some cases, this may also require additional training for current staff members, or even hiring new employees with the required skills and competencies. This sub-step provides the focus to address two questions about the people in the organization essential to effective strategy execution, such as: "Do you have enough people to implement the strategies?", and "Do you have the right people in the organization to implement the strategies?"
- Communicate the details to the members - Management should also define the lines of communication throughout the organization. Employees, even those on the lowest tier of the organizational hierarchy ("chain of command"), must be able to communicate with their supervisors and top management, and vice versa. Ensuring an open and clear communication network will facilitate the implementation process.
Step #3 - Develop an Implementation-Support Policies and programs
These are policies and procedures that would be employed in aid of strategy implementation. The policies help define the guidelines to how members of the organization should behave. This establishes the organizational culture - the overall atmosphere within the company, particularly with respect to its members.
- Establish Performance Tracking and Monitoring System - The tracking and monitoring system will provide the basis for evaluating the progress of the implementation of strategies, and monitoring the rate of accomplishments of results, or if they were accomplished at all. Define the indicators for measuring the performance of every employee, of every unit or section, of every division, and of every department. This may include establishing annual objectives that relate logically to the strategy's long-term objectives. This establishes the basis: for allocating resources; as a mechanism for evaluating managers; as the major instrument for monitoring progress towards achieving long-term objectives; and for establishing organizational priorities.
- Establish Performance Management (Reward and Recognition) System - Encourage employee involvement through a recognition and reward system that enables performance management. Ensure the reward structure has clear and direct links to the accomplishment of results which will be indicated in the performance tracking and monitoring system.
- Establish Information and Feedback System - Establish a system that will enable you to gather feedback and results data, that will be used for strategy evaluation later on.
- Communicate these policies and programs to the members of the organization.
Step #4 - Budgeting and Allocation of Resources
The focus of this step is to equip the managers, responsible for implementing strategy, with the tools and other capabilities to perform their tasks and functions. This step includes the following sub-steps:
- Allocate the Resources - Allocating resources to various departments depending on the results of financial assessments as to their budgetary requirements. Budgets are financial statements of the resources required to achieve a set of finite objectives or put into action a formulated strategy. Resource allocation as expressed in the budget needs to be carefully linked to strategy. BCG Product Portfolio Matrix is one of the tools that can be used to link resource allocation decisions to choice of strategy. Budgets can be classified into the following categories: Capital Budgets, Revenue Budgets, and Expenditure Budgets.
- Disburse Resources - Disburse the necessary resources to the departments, making sure everything is properly and accurately documented.
- Monitoring and Control - Maintain a system of checks and balances to monitor whether the departments are operating within their budgetary limits, or if they have gone above and beyond their allocations.
Step #5 - Discharge of Functions and Activities
This step involves making the tactics operational and putting the strategies into action, aided by strategic leadership, utilization of participatory management and leadership styles. This involves actual performance of tasks and activities; as well as management providing leadership and controlling the performance of activities or tactics in various levels of the organization. Throughout this step, the organization should also ensure the following:
- Continuous engagement of personnel training and reorientation.
- Enforcing the applicable control measures in the performance of the tasks.
- Evaluating performance at every level and identifying performance gaps, if any, to enable adjustment and corrective actions. It is possible that corrective actions may entail changes in policies, programs and structures established and set in earlier steps. Make these changes when necessary.
The results of accomplishments in this step #5 will be the input in the third stage of Strategic Management: "Strategy Evaluation"
Evaluating Implemented Strategy
Strategy evaluation ensures that all key supporting elements of the business systems including Measures and Rewards, Structures and Processes, Culture and People are aligned behind the chosen strategies and hinged on the mission, vision, values and critical success factors (CSF) of the organization. The evaluation and control process is concerned with defining, attaining, and presenting constructive information for reviewing alternatives to the analyzed action plan.
The evaluation method is comprised of the activities defined by the process steps below.
Evaluation Process Steps
The implementation evaluation method assists managers in deciding whether or not the chosen strategies are steering the organization in the right direction towards achieving the strategic objectives and mission, It provides an intuitive and model-driven approach to assess the execution feasibility of the chosen strategy implementation. The evaluation method allows an organization to take into consideration a lot of the points that can influence successful implementation before an ideal strategy can be implemented. It is important to note that for a given organization and business environment not all strategies are executable.
Strategy evaluation ensures that all key supporting elements of the business systems including Measures and Rewards, Structures and Processes, Culture and People are aligned behind the chosen strategies and hinged on the mission, vision, values and critical success factors (CSF) of the organization. The evaluation and control process is concerned with defining, attaining, and presenting constructive information for reviewing alternatives to the analyzed action plan.
The evaluation method is comprised of the activities defined by the process steps below.
Evaluation Process Steps
- Define the strategy to evaluate - Managers need to specify the implemented strategy and the progress results that need to be evaluated. Such results have to be objectively measurable and consistent; and can be defined using goals modeling.
- Outline Predetermined Standards - Managers need to outline standards according to the chosen implemented strategy. These standards often consist of a tolerance of range which defines adequate variations.
- Obtain data to Map Out Onto Set Standards - Data to obtain consists of results from the actions taken on the chosen strategies.
- Measure Performance - Assess the performance of the mapped out data.
- Performance Match Standards -if the performance of the identified strategy achieves the standards within the tolerance range then the process stops here; otherwise, Take Corrective Action.
- Take Corrective Action - The performance measured does not achieve the standards; managers must take necessary actions to resolve and amend the implementation Process.
The implementation evaluation method assists managers in deciding whether or not the chosen strategies are steering the organization in the right direction towards achieving the strategic objectives and mission, It provides an intuitive and model-driven approach to assess the execution feasibility of the chosen strategy implementation. The evaluation method allows an organization to take into consideration a lot of the points that can influence successful implementation before an ideal strategy can be implemented. It is important to note that for a given organization and business environment not all strategies are executable.
Strategy Execution
Strategy execution occurs in the context of strategy implementation; it entails the decisions and activities undertaken at all levels in the organization involving top management through middle management, and front-line managers and workers to turn implemented strategy into commercial/social success. Strategy execution is one of the three (3) co-incident determinants of the strategic management process including strategy formulation and strategy implementation. Successful execution is the best possible results a strategy and its implementation will allow; and results in the organization's actual or realized strategy.
Strategy Execution Process
The Strategy Execution process is a decision-making process, and involves complex mix of decisions and actions on managing people, strategy and operations. The process steps include:
Strategy execution as a step-by-step process provides both a high level direction as well as some detail necessary for to capture strategy execution success. The execution process takes much longer period of time compared to formulation, making it harder for managers to focus. It is imperative to have well designed controls to enable managers to manage the process
Strategy execution occurs in the context of strategy implementation; it entails the decisions and activities undertaken at all levels in the organization involving top management through middle management, and front-line managers and workers to turn implemented strategy into commercial/social success. Strategy execution is one of the three (3) co-incident determinants of the strategic management process including strategy formulation and strategy implementation. Successful execution is the best possible results a strategy and its implementation will allow; and results in the organization's actual or realized strategy.
Strategy Execution Process
The Strategy Execution process is a decision-making process, and involves complex mix of decisions and actions on managing people, strategy and operations. The process steps include:
- Visualizing the strategy - This helps users understand what the strategy is. One of the most pressing challenges in strategy management is understanding what the strategy is. An effective way to improve understanding is through visualization methods that illustrate the strategy in terms of its components and how they relate to each other. The goals network model of the strategy enables visualization and helps improve this understanding by illustrating both the important elements of the strategy and how each relates to one another and to end state.
- Measuring the strategy - Key elements of the visualized strategy are assigned easily understood performance measures (financial and strategic or health measures). The full complement of financial and strategic measures are organized into a performance dashboard, e.g., Balanced Scorecard, or some other framework, so the reader can determine that progress is being made towards the desired ends.
- Reporting Progress - Review the strategy regularly to determine if the strategy is producing results as opposed to controlling performance. As part of the regular reporting, leaders must make ongoing strategic decisions to keep the strategy current and on course.
- Monitoring Environment Factors - Management must remain vigilant, and assess the environment, and make decisions that correct and evolve the strategy as conditions change. It involves the decisions and activities the organization undertakes in order to turn the implemented strategy into commercial success. These decisions and activities encompass the thousands of decisions and actions taken every day by executive, middle and line managers, and employees acting according to information they may have, and their own self-interest as influenced by organizational culture, and constrained by organizational policies and procedures. The strategy execution decisions have to be timely. Timeliness refers to "when" in the evolution of changes in the organization the decisions are made, rather than how much time the decision maker has to make the decision.
- Identify Strategy Projects - Organizations may have scores, if not hundreds, of projects ongoing at any point; to get a firm grasp of the type and range of these projects the organization needs to organize all projects and udentify strateggy projects in particular to improve project-oriented strategy execution.
- Align Strategy Projects - Once projects are captured they must then be aligned to the strategies or goals for the organization. Assess all projects - either proposed or ongoing; only those projects that directly impact the strategy should be resources and continued.
- Managing Initiatives - The organization must develop a capability in project management in order to execute the strategy effectively. The full complement of projects in the organization should be coordinated and controlled by a project management office with the responsibility of also monitoring both progress and performance. Monitoring progress creates feedback about the performance of the strategy and its execution allowing organizations to make adjustments accordingly.
- Communicating Strategy - Leaders 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.
- Aligning Individual Roles - Senior leaders must ensure that employees at all levels can articulate and evaluate their personal contribution towards achieving specific strategic goals.
- Rewarding Performance - After explaining the strategy and aligning the workforce to it, senior management institutes the incentives that drive behaviors consistent with the strategy.
Strategy execution as a step-by-step process provides both a high level direction as well as some detail necessary for to capture strategy execution success. The execution process takes much longer period of time compared to formulation, making it harder for managers to focus. It is imperative to have well designed controls to enable managers to manage the process
Strategy Execution System
Strategy execution system is comprised of the set of policies and subsystems that guide the decisions and inform management of activities the organization undertakes in order to turn the implemented strategy into commercial success. These decisions and activities encompass the thousands of decisions and actions taken every day by executive, middle and line managers, and employees acting according to information they may have, and their own self-interest as influenced by organizational culture, and constrained by organizational policies and procedures. These decisions and actions include decision areas such as:
Most organizations have management systems that support parts of a strategy management system, such as strategy planning, budgeting, HR planning, or performance reporting. These systems typically function as silos and lack the required overarching capability to integrate and align the vital strategic management and operations management processes needed successful strategy execution.
To enable effective interplay between strategic management and management of value creation and delivery processes strategy execution system provides an integrated model of strategy (strategy content) as a goals model with implementation and execution refinement and elaboration of the strategy-making goal model.
Execution 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.
Emergent Strategy Process
Emergent strategy is realized pattern that was not expressly intended or planned that emerged from execution. The emergent approach (also termed realized) states that the three (3) core areas are interrelated and the analysis is in advance of the other two. The different styles/approaches of strategy making complement each other. Emergent strategy is a set of actions, or behavior, consistent over time, “a realized pattern [that] was not expressly intended” in the original planning of strategy. Emergent strategies rely on the organization's ability to learn from actual experiences of all employees at all levels.
Emergent strategy is undertaken by an organization that analyzes its environment constantly and implements its strategy simultaneously (Lynch, 2000; 26). Emergent strategy formulation process is a learning process in which cycles of events are characterized as an ongoing process of experience, reflection, interpretation, and action (Kim, 1993; Kolb, 1976). The emergent approach to strategy formulation is characterized by trial, experimentation, and discussion, that is, by a series of experimental approaches rather than a final objective. An emergent strategy develops when an organization takes a series of actions that with time turn into a consistent pattern of behavior, regardless of specific intentions. Emergent strategy implies that an organization is learning what works in practice. Emergent strategy is bottoms up, akin to strategic learning through feedback mechanisms to properly respond to and adapt to changes in the business environment in order to be profitable. Emergent strategy is more of a cumulative effect from bottom-up - the ground engineers, sales people, and other executive staff. These are daily tactical operations decisions made by those who are not in the position or state of mind to conceptualize such strategies.
Strategy execution system is comprised of the set of policies and subsystems that guide the decisions and inform management of activities the organization undertakes in order to turn the implemented strategy into commercial success. These decisions and activities encompass the thousands of decisions and actions taken every day by executive, middle and line managers, and employees acting according to information they may have, and their own self-interest as influenced by organizational culture, and constrained by organizational policies and procedures. These decisions and actions include decision areas such as:
- Establishing Annual Objectives - These represent the basis for allocating resources; provide primary mechanism for evaluating managers; the major instruments for monitoring progress towards achieving long-term objectives; establishes organizational, divisional and departmental priorities.
- Setting goals
- Prioritization of goals and objectives
- developing plans for the business
- Continuous allocation of resources - to perform selected organization actions (i.e., projects such as marketing campaigns, product development, strategic initiatives to develop assets, or individual development capability). Resource allocation as expressed in the budget needs to be linked to strategy
- Establishing the right incentives
- Manage initiatives and projects - Prioritize initiatives and projects to drive resource allocation; monitor and evaluate performance.
- Monitoring progress
- Evaluating performance and Change
Most organizations have management systems that support parts of a strategy management system, such as strategy planning, budgeting, HR planning, or performance reporting. These systems typically function as silos and lack the required overarching capability to integrate and align the vital strategic management and operations management processes needed successful strategy execution.
To enable effective interplay between strategic management and management of value creation and delivery processes strategy execution system provides an integrated model of strategy (strategy content) as a goals model with implementation and execution refinement and elaboration of the strategy-making goal model.
Execution 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.
Emergent Strategy Process
Emergent strategy is realized pattern that was not expressly intended or planned that emerged from execution. The emergent approach (also termed realized) states that the three (3) core areas are interrelated and the analysis is in advance of the other two. The different styles/approaches of strategy making complement each other. Emergent strategy is a set of actions, or behavior, consistent over time, “a realized pattern [that] was not expressly intended” in the original planning of strategy. Emergent strategies rely on the organization's ability to learn from actual experiences of all employees at all levels.
Emergent strategy is undertaken by an organization that analyzes its environment constantly and implements its strategy simultaneously (Lynch, 2000; 26). Emergent strategy formulation process is a learning process in which cycles of events are characterized as an ongoing process of experience, reflection, interpretation, and action (Kim, 1993; Kolb, 1976). The emergent approach to strategy formulation is characterized by trial, experimentation, and discussion, that is, by a series of experimental approaches rather than a final objective. An emergent strategy develops when an organization takes a series of actions that with time turn into a consistent pattern of behavior, regardless of specific intentions. Emergent strategy implies that an organization is learning what works in practice. Emergent strategy is bottoms up, akin to strategic learning through feedback mechanisms to properly respond to and adapt to changes in the business environment in order to be profitable. Emergent strategy is more of a cumulative effect from bottom-up - the ground engineers, sales people, and other executive staff. These are daily tactical operations decisions made by those who are not in the position or state of mind to conceptualize such strategies.
Performance Evaluation and Control
Performance Evaluation entails the process of evaluating the performance of a strategy, reviewing new developments and initiating corrective action to make adjustments in long-term direction, objectives, strategy, or implementation in light of actual experience, changing conditions, new ideas, and new opportunities. Strategy evaluation involves the assessment of performance measures collected through monitoring of projects and programs to determine the effectiveness of a strategy in meeting strategic objectives.
Evaluation is about being open to continuing feedback and adjusting your program(s) accordingly. Strategic evaluation can help to assess whether the decisions match the intended strategy requirements. The three main types of evaluation methods are goal based, process based and outcomes based. Goal based evaluations measure if objectives have been achieved. Process based evaluations analyze strengths and weaknesses.
Strategic control involve actions that may include performance measurements, monitoring, consistent review of internal and external issues and factors, and making corrective actions when necessary.
Performance Measurement System
Any effective evaluation of the strategy begins with defining the parameters to be measured; these parameters should mirror the goals set in the direction setting stage of the strategic management function. To evaluate performance, firms' need to establish a set of "desired" outcomes as well as the metrics they will use to monitor how well their organizations delivered against those outcomes. Those outcomes may include: achieving certain levels of productivity, revenues, profits, market share, market penetration, customer satisfaction, etc.
Review Process
The review process relies on a system of measures such as provided by the Balanced Scorecard of metrics to guide review decisions. The review process may be formal periodic reviews or informal, however it is the style and openness of the review process that makes all the difference whether the organization will:
The review meeting can be a control tool as well as problem-solving session where the organization examines what it has learned since the last review, with data (the metrics), that serves as a basis for ongoing adjustments for even better performance. These adjustments are in the form of how resources should be allocated, and how people in the organization will use their time. Determine your progress by measuring the actual results versus the plan.
Monitoring
Monitoring internal and external factors to identify issues will also enable you to react to any substantial change in your business environment. Effective and ongoing monitoring provide organizations early signal that a strategy and/or plan (strategic, tactical/action, and operational) are failing. Monitoring of plans, activities, and results provide information for future action.
Monitoring Premises and Assumptions
These are planning premises and assumptions established early on in the strategic planning process and act as a basis for formulating strategies. The premise control app has been designed to check systematically and continuously whether or not the premises set during the planning and implementation processes are still valid. It involves the checking of environmental conditions. Premises are primarily concerned with two types of factors:
Monitoring Strategic Thrusts and Milestones
Monitoring strategic thrusts and milestones provide an additional source of feed forward information. Implementation control is designed to assess whether the overall strategy should be changed in light of unfolding events and results associated with incremental steps, and actions that implement the overall strategy.
Strategic Surveillance
Monitoring a broad range of events inside and outside the company that are likely to threaten the course of the firm’s strategy is necessary to safeguard the established strategy in a continuous way.
Management Corrective Actions
Managers can use the scorecard information to control organization performance in the following ways:
This involves assessing a firm's effectiveness which may happen at the end and beginning of the planning cycle since the information provided is the input needed for the next cycle.
Performance Evaluation entails the process of evaluating the performance of a strategy, reviewing new developments and initiating corrective action to make adjustments in long-term direction, objectives, strategy, or implementation in light of actual experience, changing conditions, new ideas, and new opportunities. Strategy evaluation involves the assessment of performance measures collected through monitoring of projects and programs to determine the effectiveness of a strategy in meeting strategic objectives.
Evaluation is about being open to continuing feedback and adjusting your program(s) accordingly. Strategic evaluation can help to assess whether the decisions match the intended strategy requirements. The three main types of evaluation methods are goal based, process based and outcomes based. Goal based evaluations measure if objectives have been achieved. Process based evaluations analyze strengths and weaknesses.
Strategic control involve actions that may include performance measurements, monitoring, consistent review of internal and external issues and factors, and making corrective actions when necessary.
Performance Measurement System
Any effective evaluation of the strategy begins with defining the parameters to be measured; these parameters should mirror the goals set in the direction setting stage of the strategic management function. To evaluate performance, firms' need to establish a set of "desired" outcomes as well as the metrics they will use to monitor how well their organizations delivered against those outcomes. Those outcomes may include: achieving certain levels of productivity, revenues, profits, market share, market penetration, customer satisfaction, etc.
Review Process
The review process relies on a system of measures such as provided by the Balanced Scorecard of metrics to guide review decisions. The review process may be formal periodic reviews or informal, however it is the style and openness of the review process that makes all the difference whether the organization will:
- quickly seek effective course adjustments
- seek excuses or praise with little real direction change
- ignore much of the scorecard (system of measures)
The review meeting can be a control tool as well as problem-solving session where the organization examines what it has learned since the last review, with data (the metrics), that serves as a basis for ongoing adjustments for even better performance. These adjustments are in the form of how resources should be allocated, and how people in the organization will use their time. Determine your progress by measuring the actual results versus the plan.
Monitoring
Monitoring internal and external factors to identify issues will also enable you to react to any substantial change in your business environment. Effective and ongoing monitoring provide organizations early signal that a strategy and/or plan (strategic, tactical/action, and operational) are failing. Monitoring of plans, activities, and results provide information for future action.
Monitoring Premises and Assumptions
These are planning premises and assumptions established early on in the strategic planning process and act as a basis for formulating strategies. The premise control app has been designed to check systematically and continuously whether or not the premises set during the planning and implementation processes are still valid. It involves the checking of environmental conditions. Premises are primarily concerned with two types of factors:
- Environmental factors from PESTEL Analysis for example, inflation, technology, interest rates, regulation, and demographic/social changes.
- Industry factors from Five Forces Analysis and Industry Analysis for example, competitors, suppliers, substitutes, and barriers to entry.
Monitoring Strategic Thrusts and Milestones
Monitoring strategic thrusts and milestones provide an additional source of feed forward information. Implementation control is designed to assess whether the overall strategy should be changed in light of unfolding events and results associated with incremental steps, and actions that implement the overall strategy.
- Monitoring Strategic Thrusts (new or key strategic programs) is useful in enacting implementation controls focused on (1) Early agreement in the planning process on which thrusts are critical in the success of the strategy or of that thrust; (2) Use stop/go assessments linked to a series of meaningful thresholds (time, costs, research and development, success, etc.) associated with particular thrusts.
- Milestone Reviews - Milestones are significant points in the development of a program, such as points where large commitments of resources must be made.
Strategic Surveillance
Monitoring a broad range of events inside and outside the company that are likely to threaten the course of the firm’s strategy is necessary to safeguard the established strategy in a continuous way.
Management Corrective Actions
Managers can use the scorecard information to control organization performance in the following ways:
- Investigating on a regular basis what has been achieved, and what has not.
- Implementing corrective action where tasks are not achieved, or achieved on time.
- Checking that resources will be available when needed.
- Supervising, supporting and motivating the people of the organization to ensure tasks are undertaken.
- Adjusting the operational plan if there is a need.
- Reporting problems to superiors, e.g., directors, committee personnel, the Board members of the organization.
This involves assessing a firm's effectiveness which may happen at the end and beginning of the planning cycle since the information provided is the input needed for the next cycle.
Environments Analysis
Analysis of internal and external factors is a key stage in creating the set of goals cascaded to departments and organization units - functions, divisions, etc. that support the organization's operative goals as well as the individual employee goals that support the unit goals. In this stage, gather as much information and data as possible that is relevant to accomplishing your mission and organization's operative goals. The focus of the analysis should be on understanding the needs of the business as a sustainable entity, its strategic direction, and identifying initiatives that will help the organization grow.
Environmental Scan
The vision, mission, and values drive the ongoing analysis of the organization's external environment to assess its opportunities and threats. Changes in the external environment can have direct impact on the way organizations are run and people are managed. Some of those changes represent opportunities, and some of them represent real threats to the organization.
Organizational Scan
The vision, mission and values drive the ongoing analysis of the organization's internal environment to assess its strengths and weaknesses with respect to strategic intent and relevant issues. It involves analysis and evaluation of the general economic and industry environment in which the organization operates; this includes a review of the organization's competitive position. It is essential to conduct a qualitative and quantitative review of the organization's existing product line.Internal analysis provides strategic decision makers with an inventory of organizational skills, and resources as well as their performance levels. Many resources can be combined to give organizations competitive advantage. In particular the advantages due to intangible assets including people and service capability provide the most difficult to imitate or copy advantage.
SWOT Analysis
This involves analyzing the organization's external/internal environments to identify any opportunities and/or threats; and strengths and weaknesses. It involves continuous monitoring of environments conditions for changes in environments' factors that may affect your organizations performance. The SWOT analysis helps executives summarize the major facts and forecasts derived from external and internal analyses.
Identify any areas of which the business must seek external resources.
Gap Analysis
Strategy gap analysis looks at the company's strategy and is closely tied to bench marking (comparing yourself to competitors or best practices). For example, a company that wants to grow into becoming a larger company would first perform market gap analysis to find out what current competitors don't do, and markets they don't serve then they will perform strategic gap analysis that looks at their current skills they lack, if their current location is right what kind of advertising they need and what resources they would need to acquire. The Gap Analysis, as part of strategic planning, can look for issues and adjust the strategy to better fit the situation, or realign the company's processes to align with the strategy.
Analysis of internal and external factors is a key stage in creating the set of goals cascaded to departments and organization units - functions, divisions, etc. that support the organization's operative goals as well as the individual employee goals that support the unit goals. In this stage, gather as much information and data as possible that is relevant to accomplishing your mission and organization's operative goals. The focus of the analysis should be on understanding the needs of the business as a sustainable entity, its strategic direction, and identifying initiatives that will help the organization grow.
Environmental Scan
The vision, mission, and values drive the ongoing analysis of the organization's external environment to assess its opportunities and threats. Changes in the external environment can have direct impact on the way organizations are run and people are managed. Some of those changes represent opportunities, and some of them represent real threats to the organization.
Organizational Scan
The vision, mission and values drive the ongoing analysis of the organization's internal environment to assess its strengths and weaknesses with respect to strategic intent and relevant issues. It involves analysis and evaluation of the general economic and industry environment in which the organization operates; this includes a review of the organization's competitive position. It is essential to conduct a qualitative and quantitative review of the organization's existing product line.Internal analysis provides strategic decision makers with an inventory of organizational skills, and resources as well as their performance levels. Many resources can be combined to give organizations competitive advantage. In particular the advantages due to intangible assets including people and service capability provide the most difficult to imitate or copy advantage.
SWOT Analysis
This involves analyzing the organization's external/internal environments to identify any opportunities and/or threats; and strengths and weaknesses. It involves continuous monitoring of environments conditions for changes in environments' factors that may affect your organizations performance. The SWOT analysis helps executives summarize the major facts and forecasts derived from external and internal analyses.
Identify any areas of which the business must seek external resources.
- Strengths - The internal positive attributes of your company that are within your control. These may include: successful business processes; assets you have in your teams i.e., knowledge, education, networks, skills, and reputation; physical assets the organization has, such as customers, equipment, technology, cash and patents; competitive advantages you may have over the competition.
- Weaknesses - These are negative factors that detract from your strengths. These are factors that relate to things you might need to improve on, to be competitive. For example, things your business needs to be competitive; business processes needing improvement, tangible assets i.e., money or equipment that your company needs.
- Opportunities - These are external factors in your business environment that are likely to contribute to your success. These may include factors such as, is your market growing and are there trends that will encourage people to buy more of what you are selling? Are there upcoming events that your company may be able to take advantage of, to grow the business? Are there upcoming changes to regulations that might impact your company positively? For an existing business up and running, do you customers think of you highly?
- Threats - These are external factors you have no control over that negatively influences your success. You may need to put in place contingency plans for dealing with them if they occur. These factor may include: potential competitors who may enter your market; will suppliers be able to supply the raw materials you need at the prices you need? Is consumer behavior changing in a way that could negatively impact your business? Are there market trends that could become a threat?
Gap Analysis
Strategy gap analysis looks at the company's strategy and is closely tied to bench marking (comparing yourself to competitors or best practices). For example, a company that wants to grow into becoming a larger company would first perform market gap analysis to find out what current competitors don't do, and markets they don't serve then they will perform strategic gap analysis that looks at their current skills they lack, if their current location is right what kind of advertising they need and what resources they would need to acquire. The Gap Analysis, as part of strategic planning, can look for issues and adjust the strategy to better fit the situation, or realign the company's processes to align with the strategy.
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