Strategy implementation is a term used to describe the activities within an organisation to manage the execution of a strategic plan.
Contents
Definition
There is no universally accepted meaning of ‘strategy implementation’. Many definitions can be found:
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
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:
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 affect its success:
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.