Strategy Implementation

Building resource capabilities & structuring the organisation (chapter 9) Budgets, policies, best practices, support systems & rewards (chapter 10) Culture, ethics & leadership (chapter 11)

Seven-S Framework
Developed by McKinsey Strategy Structure Superordinate Goals/ Values Skills Staff Style Systems All elements interlink

the best companies have superordinate goals

Must have good fit between all seven elements

Strategy Implementation Process

8 components of strategy implementation process: org. competencies, capabilities, strengths - ch9 allocate resources - ch10 strategy-supportive policies - ch10 best practice & continuous improvement - ch10 information & communication systems - ch10 rewards & incentives - ch10 environment/culture/strategy fit - ch11 leadership - ch11

Strategy Implementation Action Agenda

Action Agenda

What? How? When? How long? Who?

Leading the implementation process

Key determinant of success Variety of styles and approaches Depends on background, skills, authority & view of role Need support of middle mgt Need strong sense of what to do to achieve results

Building a capable organisation

1. Selecting the right people for key positions 2. Building core competencies & competitive capabilities 3. Matching organisation structure to strategy

Building Organisation Capabilities

What skills need to become org. skills?
Integrating the skills & know-how of different people and groups in competitively valuable ways What co-ordination/collaboration is necessary to make this happen?

Building Core Competencies & Competitive Capabilities

Can relate to any strategically relevant factor
Broad & flexible base of c. Strengthening & deepening existing c. Developing new c. Nb of Selection, training, motivation, empowerment, culture, networking, flexibility, use of info.

 Purpose Division of work Coordinate divided responsibility Many approaches Hierarchical - Functional; geographic; SBU; divisional Matrix No ideal Use simplest one to do the job (Drucker) Trend is away from hierarchy Towards flatter structures Leaner staff/support functions STRUCTURE ADAPTS TO STRATEGY (CHANDLER)
see P. 289 - 299 T&S for advantages/disadvantages of each structure

Organise Into a Structure

Matching Structure to Strategy

Guidelines for helping structure to fit strategy: Pinpoint primary activities, comps, caps nb to strategy Decide on balance between internal & outsourced Primary activities, caps & critical units as building blocks of structure Degree of authority needed to manage each unit Co-ordination mechanisms Relationship with external environment

Supplementing Basic Structure

Special project teams Cross-functional taskforces Venture teams Self-contained work teams Process teams Contact managers Relationship managers Full-time integrators

Reengineering
Holistic approach Project team
Interdisciplinary/ multifunction
Culture Business Processes Technology
Technology

Redesigning, regrouping, eliminating, automating Aim for dramatic improvement

Cycle time; cost; quality

Beliefs and Behaviors

Customers

Jobs Org. Structures

Technology

Technology

Management Systems

Source: Dr. Michael Hammers Reengineering Diamond

Structures of the Future

The Horizontal Corporation, The Networked Org, The Virtual Org Flatter; decentralised; leaner; agile; responsive; innovative orgs Empowerment & self-direction Fewer/more permeable boundaries Better communication; access to info.; sharing knowledge; investment in learning

Why?
Move from standardisation to customisation Shortening product life cycles Accelerating pace of change Globalisation
Speed of response, agility and ability to capitalise on change