Strategy Implementation - Step 3/4 : Str. Mgt. Process/Framework II

    B. Type of Strategies

When an organization’s environment is stable and predictable, strategic planning can provide enough of a strategy for the organization to gain and maintain success. 

At the Business Unit Level there is generic competitive strategies put forward by Michael Porter viz.., Cost, Differentiation and Focus strategies and at the Corporate Level, there exists Stability, Growth, Retrenchment and combined strategy.   

The executives leading the organization can simply create a plan and execute it, and they can be confident that their plan will not be undermined by changes over time. But change affects the strategies of almost all organizations, understanding the concepts of intended, emergent, and realized strategies is important. Mintzberg & Waters, 1985 gave insight into these aspects.  

These are separately discussed and you can follow the link above or bottom to get additional reading. 

C.   Relationship between Strategy Formulation & Implementation

 Success is the most likely outcome when an organization has a good strategy and implements it well. In this case, all that can be done to ensure success has been done.

Environmental factors outside the company’s control such as competitive reactions or customer changes may still make a strategy unsuccessful. However, organizational objectives have the best chance of being achieved in this cell.

Roulette involves situations wherein a poorly formulated strategy is implemented well.

Two basic outcomes may ensue. The good execution may overcome the poor strategy or at least give management an early warning of impending failure.

Perhaps the field sales force recognizes a problem in the strategy and changes its selling approach to a more successful one.

Alternatively, the same good execution can hasten the failure of the poor strategy. Thus, it is impossible to predict exactly what will happen to strategies in the roulette cell, and that’s where it gets its name.

The trouble cell is characterized by situations wherein a well-formulated strategy is poorly implemented.

Because managers are more accustomed to focusing on strategy formulation, the real problem with the strategy – faulty implementation-is often not diagnosed.

When things go wrong, managers are likely to reformulate the strategy rather than question whether the implementation was effective.

The new (and often less appropriate) strategy is then re-implemented and continues to fail.

Failure is the most likely to occur when a poorly formulated strategy is poorly implemented. In these situations, management has great difficulty getting back on the right track.

 If the same strategy is retained and implemented in a different way, it is still likely to fail. If the strategy is reformulated and implemented the same way, failure remains the probable result.

Strategic problems in this cell of the matrix are very difficult to diagnose and remedy.

The analysis of the matrix makes two things clear.

1. First, strategy implementation is at least as important as strategy formulation.
2. Second, the quality of a formulated strategy is difficult to assess in the absence of effective implementation.

D. Nature of Strategy Implementation

Corporate strategy implementation depends on the blue print of the formulated strategy, taking- Competitive, environmental, organisational capabilities, and management values  - into consideration

The performance  of the organisation’s strategic implementation depends on the four important criteria of : profitability, solvency, growth and sustainanbility

The linkage established – between the organisation’s Vision and Mission ; Objectives and goals; as well as operational milestones that follow – determine the course of the organisations’ performance

Operationalising the formulated strategy must include a control system for monitoring and regulating deviations from the intended path

To take care of barriers that impede the smooth implementation of strategy must be addressed by an effective utilisation of models, especialy in relation to human resources and operational fit

The relationship between a formulated strategy and the actual implementation of it depends on corporate governanceRole of Top Management & Corporate Governance in  Strategy Implementation

 

Top management is responsible for establishing policies, guidelines and strategic objectives, as well as for providing leadership and direction for quality management within the organization. It should also establish those responsible and hold them accountable for a wide variety of management system processes.

Macro-organizational issues are large-scale, system-wide issues that affect many people within the organization. Galbraith and Kazanjian argue that there are several major internal subsystems of the organization that must be coordinated to successfully implement a new organization strategy. These subsystems include technology, reward systems, decision processes, and structure. As with any system, the subsystems are interrelated, and changing one may impact others.

Technology can be defined as the knowledge, tools, equipment, and work methods used by an organization in providing its goods and services. The technology employed must fit the selected strategy for it to be successfully implemented. Companies planning to differentiate their product on the basis of quality must take steps to assure that the technology is in place to produce superior quality products or services. This may entail tighter quality control or state-of-the-art equipment. Firms pursuing a low-cost strategy may take steps to automate as a means of reducing labor costs. Similarly, they might use older equipment to minimize the immediate expenditure of funds for new equipment.

Clarity and consistent communication, from mapping desired outcomes to designing performance measures, seem to be essential to success. Successful leaders have often engaged their teams by simply telling the story of their shared vision, and publicly celebrating large and small wins, such as the achievement of milestones. To ensure that the vision is shared, teams need to know that they can test the theory, voice opinions, challenge premises, and suggest alternatives without fear of reprimand.
The communications can involve slogans, posters, events, memos, videos, Web sites, etc. A critical success factor is whether the entire senior team appears to buy into the strategy, and models appropriate behaviors. Success appears to be more likely if the CEO, or a very visible leader, is also a champion of the strategy. 

The strategy implementation takes different form at different stages of development in the life of the firm as explained by the Greiner curve (1972).

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Types of Strategies