Strategy Execution Process
Once an organisation has decided upon a strategic direction the next stage is how to you implement the strategy? This how-to-guide walks through the main considerations that help to execute strategy effectively.
Firstly you need to decide who is involved in the strategy execution process and who is ultimately responsible for making sure that the task of implementing and executing strategy goes well. Usually good strategy execution requires a team effort from the entire management team. However, ultimate responsibility belongs to the CEO.
There are eight guiding principles that help to deliver on managerial components of the strategy-implementing/strategy-executing process. These are:
1. Building the organization with competencies, capabilities & resource strengths to execute the strategy
2. Marshalling sufficient money & people behind the drive for strategy execution
3. Institute policies & procedures that facilitate rather than impede strategy execution
4. Adopt best practices & push for continuous improvement in how value chain activities are performed
5. Install information & operating systems that enable staff to carry out their strategic roles well
6. Tying rewards directly to the achievement of strategic & financial targets & to good strategy execution
7. Instilling a corporate culture that promotes good strategy execution
8. Exercising strong leadership to drive execution forward, keep improving on the details of execution & achieve operating excellence as rapidly as feasible
There are also three facets of building an organization capable of proficient strategy execution:
- Staff the organization – strong management team, recruit & retain the right staff members with the needed experience, technical skills & intellect
- Building core competencies & competitive capabilities – develop proficiencies in performing strategy-critical value chainactivities & updating them to match changing market conditions & customer expectations
- Structuring the organization & work effort – organizing value chain activities & business processes & deciding how much decision-making authority to push down to lower managers & staff
The final section to consider is the role of budgets and resource allocation in successfully implementing and executing strategy. Each firm has choices – fund or not to fund. Managers need to ensure that the organization has enough funds to pursue the strategy & that staff have enough time to participate.
Another consideration around budgets is ensuring that a company’s budget is closely linked to the needs of a good strategy execution. This ensures that that staff are rewarded for the right reasons – gaining results & managing the strategy implementation. Otherwise if you don’t align the strategy to the rewards then the manager, staff member or team has no incentive to implement the strategy & undergo change. You can also benchmark the profitability of the implementation to ensure that margin is not eroded just to hit the outcomes for the strategy.
I hope that you find this a good general introduction to strategy implementation and execution for your business. Cheers Michael