Strategy implementation involves:
* articulating the mission, objectives and intent of the strategy to all staff
* planning, acquiring and allocating organisational resources and managing impact on
* staff and external relationships
* creating the right organisational structure
* establishing appropriate organisational systems
* developing a management style that is supportive of organisational culture and takes a
* proactive approach to cultural change
* considering strategy at three organisational levels—corporate, business and functional.
These activities can be grouped together under the following headings—planning; organising; measurement, risk and reward; and management issues
Logically, strategy implementation follows on from the selection and optimisation of the organisation's current strategy. It may sometimes be necessary to implement strategies in times of crisis.
Implementation at the corporate level considers factors such as:
* how structural changes are to occur
* approval of budgets and finance plans for major acquisitions and developments
* changes in business names
* establishment of new departments
* the appointment of change agents (e.g. the heads of new departments).
At the business level, strategy implementation is concerned with:
* the redesign of departments
* coping with the enlargement or contraction of budgets
* changes in geographical responsibility and staff numbers
* planning improvement and change programmes to align with corporate-level goals
* selection and (sometimes) retrenchment of staff.
A two-stage process that is usually adopted for planning the implementation of functional-level strategy involves:
* analysing the elements of the chosen strategy to identify which functional areas of the business unit need to change their current operations
* identifying the changes that need to occur within the functional area to implement the strategy.
Changes within each functional area will vary according to the requirements of the strategy and the internal conditions of the organisation.
The implementation of strategy and management of change are inseparable activities. Strategy implementation planning is concerned with the design of changes to the organisation. It considers factors such as adjustments to structure, how resources are to be reallocated, competency development, and how all of this can be fitted in while maintaining current operations. Strategic change management is concerned with making these changes as efficiently as possible and involving staff, who are usually one of the key resources of the organisation.
Three factors must be in place for successful implementation:
1. sufficient space/allowance must be created in the work environment to relieve staff from normal activities and to participate in the required change
2. the implementation process must be integrated into the organisation's operations (time scheduled for meetings, planning and deliverable outcomes) so that it becomes a legitimate organisational process
3. appropriate resources must be acquired and/or allocated to enable the strategy to be implemented.
Resources that will need to be acquired, allocated and managed when implementing a new strategy include: technology, time, finances, and especially,
human resources. Without the right type of resources in adequate quantities, even the best-planned, best-organised strategy will not come to fruition.
As we discussed in the previous topic, the maintenance of relationships with external groups is an important issue for strategy implementation. Stakeholder groups that should be considered include: shareholders, subcontractors, unions, related government departments (especially if 'partners' or customers), industry bodies, agents and suppliers.
Effective communication with and involvement of relevant stakeholders is vital prior to and during strategy implementation. It is much better if external partners can be involved before the functional-level strategies are finalised, as they are often able to provide useful information and suggest alternatives. Also this will give them adequate warning of likely changes so that they can adapt in time to meet new demands.
New strategies cannot always be achieved using existing organisational structures. Structural change is often a pivotal component of implementing a strategy. Organisations usually require structural change to reorganise resources and competencies into configurations that can deliver the required competitive advantage. A new structure can evolve out of a new cross-organisational arrangement of resources or the addition of new resources from outside the organisation.
Organisational structures reflect the way in which groups are organised to create and distribute a product or service. Traditionally, most organisations are structured along functional lines. However, this rationale is no longer adequate for the establishment of an effective organisational structure. Organisational structures must now accommodate rapidly changing market forces, be able to innovate effectively and allow individuals to develop strong working relations.
Two important factors to consider when making decisions about appropriate organisational structures are the:
* degree of centralisation
* focus of resources and competencies within the chosen structure.
Organisations often struggle with determining the correct amount of centralisation. Centralisation creates a clear-cut division of authority, clear lines of formal communication and clear-cut organisational systems. A centralised organisation, however, can tend towards bureaucracy and may lose its responsiveness to market requirements.
Some strategic initiatives will require a special focus if they are to receive the amount of management attention and resources they need to be successful. In this case, a decision must be made regarding whether this focus is to come from a cross-functional taskforce established specifically to address the initiative or whether one of the existing business units should take on the new task.
Burgelman and Sayles (1986) discuss the various combinations of administrative and operational linkages that produce nine different 'organisational design' alternatives within which innovative strategies can be implemented
Direct integration. Where the innovative strategy has high strategic importance and is closely related to existing operations, strong administrative and operational linkages will be needed.
New product/business unit. A separate product business unit can be created around an entrepreneurial strategic project where there is significant potential for sharing capabilities and skills.
Special Business Units. Where an innovative strategy is of high strategic importance but low operational relatedness, it may be appropriate to create dedicated new special business units outside the existing operating structure (but which are still wholly owned by the organisation).
'Micro' new ventures department. Where relatively 'peripheral' projects of uncertain strategic importance are likely to emerge from within existing operating divisions on a somewhat continuous basis, a 'micro' new ventures department may be appropriate.
New venture division. This design is suitable for situations where both strategic importance and the degree of operational relatedness are uncertain.
Independent business units. Too much uncertainty and negligible operational relatedness may make external venture divisions attractive.
Nurturing plus contracting.
In some cases the new business unit may not be important to the implementation of the corporate strategy, but may make a significant contribution to the business-level strategy. Such ventures may be too small for the company to set up and service profitably, but they may offer opportunities for the development of a small business.
Contracting. The possibilities for nurturing are low where the required capabilities and skills of the new business are less related.
Complete spin-off. If strategic importance and operational relatedness are both low, a complete spin-off from the originating organisation will be most appropriate. This involves starting a separate organisation from which the parent organisation may or may not choose to take some form of return.
To make a success of new organisational designs, the operations and objectives must fit with the corporate strategic goals and current organisational activities. Eventually, there must be some form of advantage for the parent organisation.
The best approach is to start small and search for demonstration projects that will not damage the organisation if they should fail—as some may well do. Experience will allow for more elaborate designs, ambitious plans and high levels of success.
From the implementation perspective, we can view organisational culture as a combination of characteristics that supports and inhibits the implementation of the strategy. Cultural characteristics that may support the implementation of the strategy include: customer-focused behaviours high levels of skills flexible working relationships high levels of cohesion strong alignment with ethics and values of the organisation high levels of autonomy.
Some cultural characteristics that inhibit the implementation of the strategy include: strong internal political influences., low levels of skills., low levels of cohesion., divisionalism., backward-looking perspectives., low levels of training., infrequent experience of change.
Effective management of strategy implementation relies on an appropriate system of success measurement and reward for team members and managers. A key requirement is to be aware of the changing nature of risk as the selected strategy is implemented. In the early stages when operational uncertainty is high, effective work in reducing that uncertainty must be rewarded.
Successful strategy implementation, and especially the implementation of innovative new products or services, requires a particular management style. Rosabeth Moss Kanter (1983) reported that there is a strong association between successfully carrying out an innovative accomplishment and employing a participative–collaborative management style.
Managers can successfully implement new strategic directions by:
* persuading rather than ordering, though managers sometimes use pressure as a last resort
* building a team, which entails frequent staff meetings and considerable sharing of information seeking inputs from others by asking for ideas about users' needs, soliciting suggestions from staff, welcoming peer review and acting upon inputs
* being politically sensitive and acknowledging others' stake or potential stake in the project
* willingly sharing rewards and recognition.
The early days of implementing a new strategy are filled with unpredictable barriers and discouragement, so a strategy champion is needed. A major requirement for a strategy champion is the ability to keep improvising solutions and maintaining others' confidence in the organisation's ability to achieve the strategic goals.
As a result of their complexity, most strategy implementations will need to employ a series of projects to move the different aspects of the strategy into place. To successfully coordinate these projects requires an understanding of the processes of project management.
The most distinctive features of project management are that it is temporary and goal-directed. A project team is assembled to accomplish a specific, carefully constrained task. Once the task is completed, the team is usually disbanded.
Project management can be approached in two different ways: functional and multi-functional. Because of their interrelatedness, all functional perspectives should be represented from the beginning in such implementation projects. Multi-functional project approaches are the most effective approach for shortening time cycles and improving organisational learning
A major cause of strategy implementation failure is the lack of a balanced approach. Managers are often more comfortable with 'hard' variables and so focus on budgets, structures and systems in implementing a new strategy. The successful implementation of a new strategy can be negatively affected if managers ignore the 'soft' variables of people, culture, motivation and required management style.