Strategy implementation

Strategy implementation is a term used to describe the activities within an organisation to manage the execution of a strategic plan.

Definition

There is no universally accepted meaning of ‘strategy implementation’. Many definitions can be found:

  • The sum total of the activities and choices required for the execution of a strategic plan (Wheelen and Hunger, 2004: 192)
  • Operationalisation of a clearly articulated strategic plan (Noble 1999: 119)
  • All the processes and outcomes which accrue to a strategic decision once authorisation has been to go ahead and put the decision into practice (Miller et al., 2004: 203).
  • A process by which large, complex, and potentially unmanageable strategic problems are factored into progressively smaller, less complex, and hence more manageable proportions (Hrebiniak and Joyce, 1984: 90).
  • A series of interventions concerning organisational structures, key personnel actions, and control systems designed to control performance with respect to desired ends (Hrebiniak and Joyce, 1984).
  • The managerial interventions that align organisational action with strategic intention (Floyd and Wooldridge, 1992).

Process

The process of strategy implementation remains largely unspecified. Only a few authors propose specific activities and systems (e.g. Hrebiniak and Joyce, 1984; Reed and Buckley, 1988; Wheelen and Hunger, 1992).

Multiple authors suggest that Strategy implementation relies upon the following activities:

  • Strategy articulation - Consensus agreement of the strategic objectives to be achieved
  • Strategy communication - Engage with stakeholders and consider human behaviour/psychology.
  • Strategy translation - Convert strategic objectives into clear short-term operating objectives
  • Strategy monitoring & controlling - Monitor the progress & control the strategic objectives are being achieved
  • Strategy engagement - Keeping managers engaged with achieving the strategy

Strategy articulation

The purpose of articulating the strategy is to translate the strategy into a form where managers and stakeholders agree consensually on what needs to be achieved, which is in line with research made by Keegan and Den Hartog (2004). The strategy articulation will describe the end goals, preferably, when possible, expressed with quantitative or qualitative goals (Reid, 1989). This strategy articulation can, for example, be expressed in the form of a Destination Statement (Lawrie and Cobbold, 2004).

In order to be able to achieve this, some prerequisites are need:

Strategy communication

Communicating the strategy is an essential part of the implementation (Heide et al., 2002; Noble, 1999; Kotter, 1995; Reid, 1989; Hrebiniak and Joyce, 1984; Hambrick, 1981). This communication can be internal to the organisation or external. In addition, when implementing a strategy, the human aspect also needs to be considered. And an implementation can be done only if the organisational members are engaged.

Internal communication

Communicate why the implementation is needed to organisational members with implementation responsibilities, and what they are required to do. Organisational members must be aware of the strategic goals of the firm (Kotter and Schlesinger,1979). Without this knowledge of the strategy, organisational members will not be able to place the strategy being implemented within a broader context and assess its importance. One way the communication can be done, is by cascading down the strategy into the organisation, where the strategic activities and outcomes are broken down into smaller set of change programmes and operational goals specific for each management teams, with the focus to achieve them in the near term - combining critical operational outcomes with the most urgently required change initiatives.

External communication

Sometimes, often in the public sector, it is also essential to communicate it to external stakeholders (Hambrick and Cannella,1989; and Nielsen, 1983).

Human behaviour and psychology

Other aspects of human behaviour and psychology can influence the engagement of the organisational members:

  • Leadership: A successful leader inspires followers through the communication of a captivating vision designed to motivate followers to pursuit ambitious goals (Huy, 1999).
  • Responsibilities and accountability: Clear implementation responsibilities, empowers the managers and has a positive influence on implementation performance (Allio, 2005). Managers cannot create coordination mechanisms or integrate strategic and short-term operating objectives if job responsibilities and accountability are unclear. Clarifying responsibility and accountability is vital to making strategy work. To execute strategy, responsibility and accountability must be clear. Use of a responsibility matrix or similar tool can help to define key execution tasks or activities and the people responsible for them. Without this clarification of roles and responsibilities for critical tasks, decisions, and outcomes, making strategy work is difficult, at best.
  • Motivation:
  • Achieving visible improvements in performance or ‘(quick) wins’ are important for successful strategy implementation (Kotter, 1995)
  • Subjects who set high goals performed better than those who set comparatively low goals. However, when organisational members have decided that it is impossible to reach a goal they stop trying to reach that goal. Goal setting research in the field of organisational behaviour has found that specific and hard goals, which are accepted by organisational members, result in better task performance (Erez and Kanfer, 1983).

Strategy translation

To be usable, a strategic needs to be translated into a set of actionable operational steps. The concrete and clear strategic objectives should be translated into operational implementation sub-objectives (Reid, 1989), be linked to departmental and individual goals (Kaplan, 1995), and be measurable (Reid, 1989). An essential part is to make sure that people understand what is they need to do and why.

In other words, the business strategy must be translated into a set of clear short-term operating objectives (activities and outcomes) in order to execute the strategy. Key issues, elements, and needs of strategy must be translated into objectives, action plans, and “scorecards” and this translation is an integral and vital part of the execution process. Developing this set of clear objectives, that relates logically to the strategy and how the organisation plans to compete, is an important aspect of an effective implementation process (Owen, 1982). Having a concrete, detailed and comprehensive implementation plan can have a positive influence on the level of success of an implementation effort. In addition it helps identify what will be required in terms of resources, capabilities and time.

Part of this strategy translation is to assign responsibilities (Owen, 1982) across the organisations members, not only as to engage them but also to monitor and control that each of the operating objectives is being taken care of.

Therefore to achieve strategic objectives, the short-term operating objectives need to be measurable. Performance appraisal and measurement of strategic progress simply cannot function without the existence of these critical metrics or measurable performance criteria. Progress measurement points or ‘milestones’ should be established (Owen, 1982). In addition, goal setting provides a sense of direction and pace setting for the implementation effort (Reid, 1989)

The pace of the strategy implementation can have an impact on its success:

  • Dooley et al. (2000) found that strongly committed decision teams lead to more effective implementation but slows down strategy implementation.
  • Implementation should occur incrementally so that organisations are not overwhelmed by trying to implement too many changes simultaneously (e.g. Leighton, 1996)
  • A radical implementation pace in which large changes are quickly made may not allow organisations the time to carefully plan and execute successful reorganisations or to engage organisational member participation and commitment. moreover operations can be dramatically disrupted and other unintended consequences may occur
  • The pace of the implementation: a slow implementation with small steps usually has a positive influence on implementation performance.

Strategy monitoring & controlling

Monitoring or evaluation should begin early on in order to cut an errant strategy before losses or negative impacts become too costly or damaging.

As mentioned in the Strategy translation, each short-term operating objectives needs to be associated with a measure whether it be an action plan with milestones or a metric (Owen, 1982). These small number of high-level measures with associated targets will track the implementation activities being undertaken and their consequences .

Monitoring these measures will help the organisation members in controlling that the strategy is being implemented successfully and if not in making them take decisions that will allow them to achieve the strategy. Strategy control, in turn, provides timely and valid feedback about organisational performance so that change and adaptation become a routine part of the implementation effort. Controls allow for the revision of execution-related factors if desired goals are not being met.

Strategy engagement

To achieve that there needs to be an agreed mechanism of intervention to enable the management to efficiently and effectively engage with their organisation to ensure the required actions are being carried out, and where these actions are not working as expected, to be able to change the actions as required (Amason 1996). For example a best practice for strategy implementation monitoring and control is to meet regularly in structured and time-limited sessions (Allio, 2005).

As mentioned previously, a slow implementation with small steps usually has a positive influence on engaging the management resulting in a better implementation performance.

Implementation evaluation can have a positive influence on future implementation performance, increasing engagement using past successes or based on lessons learned.

Links to other tools

Strategic implementation is often associated with performance management. Tools such as balanced scorecard and its derivatives such as the performance measurement, or the ACME (Articulate, Communicate, Monitor and Engage) framework can be practical and useful to successfully implement a strategy.