10 basic tasks of the strategy execution process

This Chapter Will Help You Understand:

What managers must do to execute strategy successfully

Why hiring, training, and retaining the right people constitute a key component of the strategy execution process

That good strategy execution requires continuously building and upgrading the organization’s resources and capabilities

How to establish a strategy-supportive organizational structure and organize the work effort

The pros and cons of centralized and decentralized decision-making in implementing the chosen strategy

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Executing Strategy

Strategy execution:

Is operations-driven, involving management of both people and business processes

Is a job for the whole management team, not just a few senior managers

Can take many more years to develop as a real proficiency than implementing strategy

Requires a determined commitment to change, action, and performance

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Good strategy execution requires a team effort. All managers have strategy-executing responsibility in their areas of authority, and all employees are active participants in the strategy execution process.

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A Framework for Executing Strategy

Committing to executing a strategy:

Entails figuring out the specific techniques, actions, and behaviors necessary for a smooth strategy-supportive operation

Following through to get things done and deliver results

Making things happen (leadership) and making them happen right (management)

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When strategies fail, it is often because of poor execution. Strategy execution is therefore a critical managerial endeavor. The two best signs of good strategy execution are whether a company is meeting or beating its performance targets and whether they are performing value chain activities in a manner that is conducive to company-wide operating excellence.

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FIGURE 10.1 The 10 Basic Tasks of the Strategy Execution Process

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Staff the organization with managers and employees capable of executing the strategy well.

Develop the resources and organizational capabilities required for successful strategy execution.

Create a strategy-supportive organizational structure.

Allocate sufficient resources (budgetary and otherwise) to the strategy execution effort.

Institute policies and procedures that facilitate strategy execution.

Adopt best practices and business processes that drive continuous improvement in strategy execution activities.

Install information and operating systems that enable company personnel to carry out their strategic roles proficiently.

Tie rewards and incentives directly to the achievement of strategic and financial targets.

Instill a corporate culture that promotes good strategy execution.

Exercise the internal leadership needed to propel strategy implementation forward.

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Building an Organization Capable of Good Strategy Execution: Three Key Actions

Staffing the organization—putting together a strong management team, and recruiting and retaining employees with the needed experience, technical skills, and intellectual capital

Acquiring, developing, and strengthening the resources and capabilities required for good strategy execution

Structuring the organization and work effort

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Putting together a talented management team with the right mix of experiences, skills, and abilities to get things done is one of the first steps to take in launching the strategy-executing process.

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FIGURE 10.2 Building an Organization Capable of Proficient Strategy Execution: Three Types of Paramount Actions

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Staffing the organization. This includes putting together a strong management team and recruiting and retaining talented employees.

Acquiring, developing and strengthening key resources and capabilities. This action includes developing a set of resources and capabilities suited to the current strategy; updating resources and capabilities as external conditions and the firm's strategy change; and finally, training and retaining company personnel to maintain knowledge-based and skills-based capabilities.

Structuring the organization and work effort. The steps for this action include instituting organizational arrangements that facilitate good strategy execution; establishing lines of authority and reporting relationships; and deciding how much decision-making authority to delegate.

These actions will lead to both strategy-supportive resources and capabilities, and a strategy-supportive organizational structure.

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Staffing the Organization

Putting together a strong management team

Planners who ask tough questions and figure out what needs to be done

Implementers who can select, manage, and lead the right people

Executors who turn decisions into actions that drive the changes that produce sustainable competitive advantage

Key takeaway

A critical mass of talented activist managers

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In many industries, adding to a company’s talent base and building intellectual capital are more important to good strategy execution than additional investments in capital projects.

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