What is Strategy Implementation ?
Strategic implementation can be defined as turning strategy into action for attaining the strategic objectives and goals. Since, implementing the strategy is more important than selecting it, hence, it is very important for the strategists to consider various factors while implementing. The strategy selected has to be well performed for the purpose of attaining the strategic objectives. Even a superior strategy tends to fail in the absence of efficient implementation. In other words, strategy implementation can be defined as a procedure which enables putting the chosen strategy into action. Implementing a strategy requires carrying-out various actions.
Definition of Strategy Implementation
According to Steiner :
"The implementation of policies strategies is concerned with the design. and management of systems to achieve the best integration of people, structures, processes, and resources, in reaching organisational purpose".
According to Mc Carthy :
"Strategy implementation may be said to consist of securing resources organizing these resource and directing the use of these resources within and outside the organisation".
According to Glueck :
"Strategic implementation is the assignment or reassignment of corporate and the employees SBU leaders to match the strategy. The leaders will communicate the strategy to Implementation also involves the development of functional policies about the organisation structure and climate to support the strategy and help achieve organisational objectives".
According to Harvey :
"Implementation involves actually executing the strategic game plan. This includes setting policies, designing the organisation structure and developing a corporate culture to enable the attainment of organisational objectives".
Steps in Strategy Implementation
Indeed, there is an essential relation between implementation and chosen strategy. Since, the chosen strategy has to be materialized, thus it raises an alarm for its ability to change previous resource obligations, structures of the organisation, policies involved and system of administration. If the changes in these areas are required by the organisation, in such a case, the strategy should be capable enough to plan out for bringing changes in them. In order to make the strategy process efficient, it should go along with the implementation process. Following 6 steps are involved in the process of strategy implementation :
1) Building an Organisation which is able to execute the Strategy :
The structure of an organisation should be such that it can turn the strategy into practical implementation. Moreover, the employees of the firm should be proficient enough in skillful execution of the strategy. For this purpose, the responsibility. for attaining the major implementation, job should be allotted to the suitable candidates or teams only.
2) Establishment of a Strategy-Supportive Budget :
For the purpose of attaining strategic targets, the firm should have the employee, equipment, amenities and assets needed for the successful accomplishment of the strategic plan. Moreover, the decision about the strategy has to be followed by recognizing the chief jobs to be done, the types of decisions to be taken, and the development of formal plans. The jobs to be done have to be organised in an order which consists of action plans lying within the objectives to be attained till a particular date.
3) Installment of Internal Administrative Support Systems :
Internal systems can be defined in terms of policies and processes which are required to ascertain desirable behavior, information systems, providing strategically critical information on time, and all the aspects which are required for giving significant strategy-executing ability of the firm such as inventory, cost accounting, customer service, materials management, and other administrative systems. These internal systems should help in supporting the management process, the manner in which the managers in a firm coordinate, along with monitoring strategic progress.
4) Rewards and Incentives :
The next step deals with the planning that helps in associating the rewards and incentive with strategy and objectives. The personnel of various departments should be motivated to work towards accomplishing the strategy. The organisation should motivate its employees with the help of rewards, incentives, constraints, etc. control, standards.
5) Giving Shape to the Corporate Culture for Fitting it in the Strategy :
A corporate culture which supports strategy is the major reason behind the diligence and intelligence of the organisations in attaining the strategy. Strategists should make an effort to focus on, the prevalent aspects that help in supporting the planned new strategies. It is desirable to recognize and change the feature of the prevalent culture which opposes planned strategy. It has been found through extensive researches that new strategies. are usually market-oriented and competitive. forces mostly define them. This is the main reason for which, altering the culture of the firm. for making it suitable for a new strategy is generally more efficient than changing the strategy to suit it with the prevailing organisational culture. There are a number of techniques available for changing the organisational culture, such as training, recruitment, transfer, restructuring and re modeling of organisational design along with positive motivation.
6) Exercising Strategic Leadership :
Dedicating and accomplishing strategy are the parts of strategic leadership. Constructive utilization or politics and power are involved in it, where politics help in establishing consent for supporting the strategy. Strong leadership skills are desirable in the managers in order to persuade the personnel to enthusiastically embrace the changes coming into the organisation and work for attaining the organisational objectives. It is a common consent that change can bring about success, in case the leaders have highly optimistic attitude towards its success.
Nature of Strategy Implementation
The characters or scope of strategy implementation can be described as follows :
1) Action-Oriented :
Strategy implementation is action-oriented in the sense that it helps in materializing the things. The ability of management to bring about organisational changes is a part of it. It strives to attain enhancement operations and in business procedures on an ongoing basis. It progresses towards operational superiority. Strategy implementation helps in creating and nurturing culture which supports the strategy. It seeks to meet the performance objectives.
2) Require Leadership :
A proficient leadership is required for the implementation of a new strategy in order to persuade others in favor of it. It makes an effort to eliminate the probability of suspicion through motivation and encouragement. It can be regarded as the safe commitment of the parties involved. Harmony and zeal are established by skillful leadership only. It helps in organizing and coordinating all the parts of the implementation.
3) Employee Involvement :
The entire management group and official staff are included in implementation and execution of strategy. Just like every part of a clock has to perform in order to function smoothly, all the parts of an organisation have to unite and work, in order to ensure proper execution of strategy.
4) Varied Contexts :
Different environment required for every implementation situation, each of which is affected by varied business practices and competitive scenarios, working culture environment, incentives and compensations policies, blend of personnel and the history of the organisation, etc.
5) Challenging Management Job :
Implementing strategy can be regarded as a difficult management task because of the following reasons :
- Extensive range of challenging managerial activities which have to be executed.
- Several ways for dealing with every activity.
- Numerous problem causing issues which have to be sorted out.
- Calls for efficient management skills by experts.
- Need for introducing and managing a number of ideas all together.
- Difficulty in uniting the efforts of several teams in order to attain smooth functioning of the entire group as a whole.
Aspects of Strategy Implementation
Those organisations which are successful at implementing the strategies are able to efficiently manage six major supporting factors or approaches, which are as follows:
1) Resources Plans/Resources Allocation :
Resource allocation can be defined as a procedure which involves assigning organisational resources to different departments, Strategic Business Units (SBUs) and divisions. It is mainly concerned with securing and assuring physical, financial as well human resources as per the strategic tasks for the purpose of attaining organisational goals. Allocation of resources can be regarded as an efficient device for the purpose of communicating strategy as it gives the much needed indication to the people involved. It helps in revealing the real face of the operational strategy. If the shifting of resources is not in accordance with the official strategy, it would not come into practice. The decisions regarding the allotment of the resources are related to the organisational goals, involving many questions such as-what sources have to be explored for acquiring resources? Which facts affect the process of resource allocation? What are the different approaches which could be adopted for allocating resources?
2) Project Implementation :
Project implementation (or project execution) can be regarded as the stage, which involves actualization of visions and plans. It is a logical conclusion drawn after evaluation, decision making. decision making, visualizing, scheduling, applying for the capital, and finally deciding about the financial resources for a project. The Project Management Institute of the U.S. has defined the project as, "a one-shot, time limited, goal-oriented, major undertaking, requiring the commitment of varied skills and resources". This means that prior decisions about time scheduling and costs help in making the project a specified activity. The projects help in creating the condition and facilities needed for implementation of the strategy, which is the part of project management.
3) Procedural Implementation :
For the purpose of strategy implementation, execution of the strategy is required on the basis of set rules, regulations and procedures as directed by the government. Despite the simplification of process done by liberalization, globalization, and i privatization, many of the procedures are yet applicable in the process of implementation of strategies. Hence, the study of the subsequent procedural features should be undertaken by the strategists before implementing the strategy.
4) Organisational Structure :
The structures of the organisations are built on the basis of their strategies Organisations can be structured in several ways or methods. The simple structure is required for the simple strategies, while flexible structure is required for the growth strategy and matrix structure is essentially built on the basis of complex strategies. Practically, to implement stable strategies, the organisation structure should be mechanistic in which the different parts work for the welfare of whole organisation. While to implement growth strategies, the organisation structure should be organic in which the whole organisation work towards its different parts.
5) Behavioral Implementation :
The features of strategic implementation that affects the behavior of the persons in organisation are dealt through behavioral implementation The behavior and activities of the personnel has to be directed in the desired directions as the human resources are a fundamental part of the organisation. Formulating a strategy successfully. does not assure its successful implementation, as practical execution is always a difficult task. Discipline, motivation, diligence and support on the part of the managers and personnel are some of the necessary elements required for successful implementation of strategy.
6) Functional Policies and Implementation :
The development of a plan and policy related to various areas or functions undertaken by the organisation deals with functional implementation. Production, finance, marketing and personnel are some key functions of the organisation. The key functions of the firm include production, marketing, finance, personnel. The guidelines to operational managers are given by functional policies, for the purpose of :
- Ensuring coordination across functional units. The decision regarding the strategy of the firm has to be essentially followed by modification of functional policies in order to meet the growing demands emerging out of new business.
- Execution of the strategies.
- Reducing the time taken by the mangers in decision-making.
- Handling of the similar situation unfailingly.
Barriers to Strategy Implementation
The following key issues arise from implementation of the strategy and their relationship with empowering system,which should be kept in mind by the mangers. Six barriers or issues in strategy implementation are as follows :
1) Time Horizon :
The organisation that believe in empowerment, is based both on long-term well as short term dimensions For example, the short term dimension can be in form of rewarding incentives like bonus based on efficiency by measuring quantitative performance. Whereas, it is quite apt to relate long term rewards with qualitative performance as well as some appropriate quantitative measures.
2) Risk Considerations :
A qualitative measure of performance can be more useful in case it is. desirable to have risk prone behavior, e.g rewards in the forms of stock options or the bonuses. The reason for this is that quantitative measures tend to avoid the risk. in order to eliminate the chances of failure, instead of taking the risk to attain the results.
3) Bases of Individual Rewards :
The systems of rewards should be related to the ability, diligence and job satisfaction of the individual. Accelerating the rewards to only one part of the performance may adversely affect the other parts of the performance
4) Bases of Group Rewards :
One of the significant issue involve in the reward systems is the choice between individual and group reward. It would be quite tough to reward individuals for their performances and efforts if the structure of the organisation doesn't permit to segregate individual's performance from that of the other people.
For example, in case of contributions by the managers to enhance the performance of the organisation can be regarded as useful as well as suitable, because contribution by the individual is comparatively independent from that of the others. In case the contributions given by the individual are dependent upon each other's performance, rewarding scheme formed on the basis of group performance would be more suitable.
5) Corporate and SBU Perspectives :
In case of the organisations with several divisions, a system of rewards based on both corporate as well as Strategic Business Units interests has to be formulated, giving more freedom and autonomy to the business units. Similarly, unit based rewarding system would be more useful in case SBUs are unlikely to affect performance of the organisation. But it is important to note here that, a balance authority scenario has to be formulated, if general managers and directors are shouldering the dual role of attaining corporate as well as units objectives.
6) Vision Barrier :
A large number of personnel fail to understand the strategy of the organisation. Such a scenario was quite suitable at the beginning of the 20th century, when the employees were mainly parts of the industrial mechanism and the value was drawn by efficient use of the organisational resources. On the other hand, in the present scenario the knowledge or information based values are created on the basis of non-material resources such as organisational culture and inter and intra relationship between employees and the higher authorities. Several organisations are still following the age old tradition of authority and control, which are otherwise inappropriate in the present scenario.
Guidelines for Overcoming Barriers in Strategy Implementation
Following are the tools which can help to overcome the obstruction coming in the way of strategic implementation :
1) Focus :
Having a lot of priorities implies lack d action as everything cannot be regarded as a priority. Distraction is quite obvious in case there are several priorities. Hence, it is the duty of the leaders to ascertain the point of focus for the organisation by limiting it to two or three major action plans which are agreeable to the objective of the organisation.
2) Clear Communication :
It is essential for part of the leaders to clearly define the objective of the organisation to the subordinates and they are also expected to explain them their roles in attaining the desired objectives. At every level of leadership, the tasks to be accomplished have to be recognized which should be followed by laying emphasis on the employees' efforts towards the accomplishment of major actions.
3) Teamwork :
The leaders at the senior level have to recognize the possible conflicts that might emerge while attaining the top organisational goals and they have to find-out the ways for resolving them. It might involve dealing with the situation by compensation or negotiation, which may involve conducting intense discussions regarding allocation of roles and what is expected from each personnel.
4) Regular Check-Ins :
Keeping an alarming deadline for a specific project acts as a great motivation for accomplishment of the task. Regularly examining the work done by the employee helps to ascertain the completion of assigned tasks within the stipulated time.
5) Accountability :
For ensuring the implementation of major objectives, it is essential to hold the employees responsible for not accomplishing the works assigned to them. The staff should be aware about their responsibilities and the consequences which might emerge in case they are not fulfilling the desired duties.
McKinsey's 7S Framework
The 75 are critical to the successful implementation of strategy. McKinsey's 7-S framework proposes that there are number of factors which influence the capability of organisations to change and achieve its objectives. In the 1970s, the 7S framework was developed by McKinsey Company which is a reputed management consultancy firm of USA. The 7S framework is a diagnostic tool which measures the strategic degree of fit between the organisation's current and intended strategies. It is a tool which can be used to bring about changes in the organisation.
This framework is used to enhance the organisational performance and its organisational culture. It brings about better co-operation between different units of the organisation. It also helps the organisation to develop a perspective the need and scope for organisational change. This framework is very flexible and can be used for small teams as well as for large project environments.
The 7S consists of seven interdependent factors which govern the performance of the organisation. McKinsey has divided the 7S into hard and soft elements. The hard elements are named as strategy, structure and systems which are all tangible factors and can be directly controlled by the organisation.. The soft factors are style, staff, skills and shared values which are less tangible in nature, uncontrollable and are of shared culture in the group. These emanate from the shared culture of the group.
Elements of McKinsey 7S Framework
The 7 elements of the McKinsey 7S model are :
1) Strategy :
The strategy concept includes the purpose, mission, goals, objectives, action plans and policies framed by the organisation. The 7S framework recognizes the fact that it is easier to frame a strategy than to execute it.
2) Structure :
The structure denotes the organisational chart. In other words, it signifies the whole business organisation in a systemic way. It also allocates various roles and responsibilities to each unit. This is the most visible and easiest to change element in the 7S framework.
3) System :
Systems determine the rules, regulations and procedures which govern the functioning of the organisation. These systems are made by the organisation and govern the way of doing business in the organisation. It is considered as the main agenda of managers during any process of organisational change.
4) Staff :
Staff is very important element of the 75 framework. It is concerned with the recruitment of individuals for different departments and evolves them as managers of tomorrow. It is a comprehensive process of recruitment, selection, motivation, and reward-giving. It also denotes the kind of culture the organisation wants to create in the organisation and whether new recruits are able to assimilate in the organisation.
5) Skills :
Skills are the unique competencies' which redirects the organisational abilities. These skills can be in form of engineering skills, new product development, market research, analytics. customer care and delight, quality, etc.
6) Style :
Style is a variable which determines the effectiveness of the management to successfully implement the organisational changes. It is a way the managers handle the clients, top-level management, several action plans, etc. Style defines a true leader of the company.
7) Shared Values :
Shared values are the basis of the McKinsey framework. It defines the values beyond the set goals and objectives of the organisation. These are the norms and etiquette's which govern the working of the organisation. and which guide the behavior of the members of the organisation. The shared values are also called super ordinate goals.