Strategy Implementation

Prof Ashish K Mitra

Implementation is a key component of strategic
Management.
Strategy is formulated and approved by the top
management but people across the
organization is involved in its
implementation. Implementation realizes the
intent of the proposed strategy.
Implementation can also be referred to as
process by which strategies & policies are put
into action by programs, budgets and
procedures , Annual Operating plans supported
by performance measurement. Translate Strategic Planning
actions to Job descriptions & KRAs
The implementation of strategy puts to test an
organizations ability to allocate resources,
design structures and systems (processes),
formulate functional objectives, and plan for
operational effectiveness.
Porters view of competitive strategy focused
on the external world of industry structure
and the strategy of the competitors.In contrast,
Prahalad & Hamel focused on the internal
world of a companys strategic architecture
consisting of all its resources and
competencies , and how it was leveraged.
A rational view-taking into considerations both
these approaches is that strategy is a dynamic
& evolutionary process of finding external
opportunities into which the competencies can
be meshed to provide competitive advantage.
These two views are connected through the
strategy implementation process. Even though
strategy may be deciding what to do based on
external /competitive considerations, implementation
is about getting it done through the use of resources
and competencies.
A superior strategy needs a superior ability to
execute. This comes from the portfolio of
resources & competencies.

The superiority can be maintained by continuously
improving on the strategic architecture, both by
strengthening existing competencies and by developing
or acquiring new ones.
Since implementation is done through large
number of people across the organization ( now
a days, often an extended one), it requires the
capacity to design good environments that
motivates and effectively coordinates
activities of people in the organization.
One of the important element in providing the
above is the organization structure. Another
one is the organizational culture, which
determines the atmosphere within the
organization.

The skill of management lies in the realm of
design of structures, systems and mechanisms
to guide and motivate the actions of the
employees.
Without a proper fit between strategy and
organizational design, various elements required
for implementation will not move in harmony,
ultimately leading to inefficient use of facilities
and failure.
For many organizations the chief challenge is
insufficient entrepreneurialism, a failure to
motivate top talent to seize opportunities and
make most of them.
For some, the problem is an inability to develop ,
apply, and capture value from new technologies
and practices, and to forge value creating
linkages between processes in business units,
and core functions. The design of the
organization must take all these factors into
consideration.
Too much emphasis on the best strategy
with inadequate consideration to
implementation aspects may turn out to be
inferior to second best strategy but
implementation aspects properly buttoned up.
(Planning School vs Process View)
Key Implementation Tasks
Having formulated a Strategy , its implementation
process involves
Designing appropriate Organizational Structure
Designing appropriate processes & control systems
Achieving a fit between strategy, structure and control
systems ( organizational design) & creating the right
environment in the organization
Then managing strategic changes
Strategy implementation Refers to how a company
should create, use and combine organizational structure,
systems, and culture to pursue strategies that lead to a
competitive advantage and superior performance

Organizational
structure
Strategic
Control
Systems
Organizational
Culture
Coordinates
and
Motivates
employees
To achieve superior
profitability
Efficiency
Quality
Innovation
Responsiveness
to customers
Implementing Strategy through Organizational Structure,
Control Systems and Culture
For gaining
competitive
advantage
Manage
Strategic
Changes
structure
Strategy
Skills
Staff
Style
Systems
Shared
Values

The McKinsey 7-S Framework
SHARED VALUES
LEADS TO CULTURE
McKinsey 7-S Framework ( also
explains meaning of Culture)
Just like every individual has a personality , every
organization has an equivalent aspect called -
culture. It is an intangible, ever present theme that
provides meaning, direction and the basis for action.
As personality influences behavior of an individual, the
shared assumption of beliefs and values among a firms
members influence opinions and actions within a firm.
McKinsey 7-S framework highlights the importance of
shared values which leads to culture of the
organization as a whole. It forms the nucleus of the
framework.

Strategy : A framework / set of decisions and
actions aimed at gaining a sustainable
competitive advantage
Structure: The way the organizations units
relate to each other in accomplishing successful
implementation of strategies; The organization
chart who reports to whom, how tasks are both
divided up and integrated.
Systems: The procedures, rules, regulations &
routines that characterizes how important work
is done, the flow of processes. Includes both
formal & informal systems, Financial systems,
appraisal systems etc.
Style: How key managers behave in achieving
the organizational goals, how managers
collectively spend time and attention. How the
management acts is more important than what
management says.
Staff: How companies develop their employees
and shape basic values. Includes selection,
placement, training of employee, compensation.
Skills: An organizations dominant capabilities
and competencies.
Shared Values: The interconnecting centre of
McKinseys model is shared values What the
organization stands for and what it believes in-
the shared vision of the company.
Shared Value is strongly related to the culture of the
company the commonly held beliefs, mindsets, and
assumptions that shapes an organization behaves.
The seven elements are distinguished in so called hard
Ss and Soft Ss
The hard elements strategy, structure and systems are
easy to identify ( found in strategy documents,
organization plans & other documents). Management
has some control over the hard elements & can exercise
influence over them.
The four soft elements are difficult to describe, are
continuously evolving & changing, and are determined
by people at work in the organization.

The 7 S framework highlights the
importance of interrelated and
interconnected factors within the
organization & their roles in strategy
implementation.
It is often difficult to identify which of the
seven factors would be the driving force in
changing an organization at a point of time.
Perhaps the 3 hard Ss are within more
effective control of management.
What is Culture, and Why it is important?
Organization cultures can be viewed as systems of
shared values ( about what is important) &
beliefs (about how things work)
that shape a companys behavioral norms ( the way we
do things around here)
A value is an enduring preference for a mode of
conduct or an end-state . Managers are frequently
unaware that their daily activities are usually governed by
culture and shared values
Organizational culture & values lead to givens, or what
is taken for granted , about how work is to be done & how
one should interact with others. Culture automatically
shapes the way members see their world and behave.
Organizational culture has inertial effect, is deeply
rooted in beliefs & values that members have internalized
Changing culture is a slow, demanding process.

How inadequacy of structure, systems &
culture can impede bringing strategic changes
Assume a Firm takes a strategic decision
to put thrust on bringing new innovative
offerings, new products continuously in
the market.
Despite its stated new strategic direction, it
is worried some months later, Why it still
takes a long time to make a decisions on
issues related to bringing a new product in
the market?

Delays could be because of Culture : people are
risk averse, culture of a failure viewed in a
condemning manner
Delays could be because of Structure : there
could be lack of co-ordination between different
people from different departments. Say lack of
co-ordination between sales, R&D and
manufacturing department.
Delays could be due to lack of systems to
provide timely and reliable inputs to managers
to act. Co-ordinate effort. The approval systems
could be very cumbersome & slow.

Strategic Control Operational Control
Basic
Question
Are we in RIGHT
Direction?
How are we performing?
Aim Proactively
continuously
questioning
Allocation & use of Resources
Main
Concern
Steering the
Organization
Action Control
Focus External
Environment
Internal Organization
Excise of
Control
Top Management,
Long term
Executive / middle management,
Generally Annual / short term
Main
Techniques
Environ scanning,
questioning,
reviewing
Budgets, schedules, & MBO