Building a capable organization

The eight levers of strategy implementation

Presented by Amitesh Singh

AGENDA

• Implementation: Bridging the gap between formulation and performance

• Structures and managerial skills -The eight levers
• Balancing the implementation levers
• Conclusion
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IMPLEMENTATION

WEAK POOR

Future Strategy Formulation

WEAK
IMPLEMENTATION

 PROBLEMS:
• Employees don’t understand or are not aware of the strategy
• Major percentage of the strategy not implemented
• The gap between formulation and performance comes from the gap
between formulation and implementation
•

IMPLEMENTATION : OPPONENT OR ALLY

IMPLEMENTATION : Opponent or ally

• Implementation seen as opponent:

 Beer and Eisenstat(2000) – Confront the six silent killers
• Top-down senior management style
• Unclear strategy and conflicting priorities
• An ineffective senior management team
• Poor vertical communication
• Poor coordination across functions,businesses or borders etc
• Inadequate down the line leadership skills and development
•
• Tendency to use powerful terminology to describe the importance of
implementation as though it requires a strategic warfare
•
• Appropriate levers of implementation needed to make it an ally and not an opponent
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RESEARCH


• Objective: To get an insight into how the companies have attempted,

either successfully or unsuccessfully, to mesh their structural
and managerial skills in their implementation efforts.
•
• 124 organizational stories
• Consumer companies - 69
• Business-to- business - 15
• Service companies - 33
• Nonprofit companies - 7
IMPLEMENTATION VARIABLES

Frame work to operate.

Strategies implemented through the structures

Behavioral activities managers engage in

Key indicators of successful implementation

-Bonoma and Crittenden (1988)

THE EIGHT LEVERS - Structural
• ACTIONS: Cross functional integration and company collaboration.
• Input and co-operation of every member of a company’s workforce
• Strategy should fit with the cross functional ability to implement
•
• PROGRAMS: Organizational learning and continuous improvement practices.
• Creative capital must be planned for in the firm
• Right People + Right Environment = Innovation
•
• SYSTEMS: Strategic support systems.
• Timely access to quantitative and qualitative data
• Issues: Quality of information technology needed and security/privacy concerns
•
• POLICIES: Strategy supportive policies.
• In response to a pattern of incidents and not just particular incidents
• Not just a list of activities but a support to the company’s overall mission
THE EIGHT LEVERS – Managerial Skills
• INTERACTING: Exercising of strategic leadership.
• Key responsibilities and skills of a leader
• Critical implementation lever for building a capable organization
•
• ALLOCATING: Understanding when and where to allocate resources.
• Use of money, people and capabilities
• Financial resources, Physical capital, Human capital, Organizational capital
•
• MONITORING: Tying rewards to achievement.
• Monetary incentives – bonuses, stock options, perks
• Non-monetary incentives – praise, recognition, job security
•
• ORGANIZING: Strategic shaping of corporate culture.
• Clearness in content, Consistency in nature, Comprehensiveness in coverage
• Shared values(what is important) + Norms (attitudes and behavior)
BALANCING THE LEVERS
• Established firms able to overcompensate with another lever to reduce the
impact of a weak lever
•
• For startups it is imperative to understand how each of the levers relate to
the company’s strengths and weaknesses
•
• Identify levers that might serve as barriers to the company’s long term
success
•
• Equal use of all eight levers not necessarily required while building a
capable organization
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CONCLUSION

• Strategy implementation and formulation process work side by side

•
• A well formulated strategy enables a company to achieve its longer term
vision of a good mission, good planning, and overall corporate success
•
•


 Strategy implementation is an ally and not an opponent

  THANK YOU
•