Introduction
Many business organisations have problem in converting their excellent strategic plans into action. It is estimated that more than sixty percent of business strategies are not successfully implemented (Barrows, Ed. 2014). But it is possible to make a successful implementation of a strategic plan if the key people in the organization consciously contemplate the plan and work together. Working out the plan is the key in strategic execution. Though there is no single way to execute the strategy there are certain principles that are presented by consultants and researchers such as Ram Charan, Michael Porter, Gary Hamel, Jim Collins, Clayton Christensen, etc. which can help a business to implement a strategy. With so much of information and knowledge available on this subject, we are well placed to synthesise out our own course of action for business strategy.
Execution Paradigms
Strategy execution can be viewed from two angles, one strategy as a process and another strategy as a system. In the process view, as explained in the book ‘Execution: The Discipline of Getting Things Done,’ by Larry Bossidy and Ram Charan (2002), execution is a discipline or “systematic way’ for exposing the reality and acting on it. They further point out, “the heart of execution lies in three core processes": People, Strategy and Operations. The information presented in the book ‘Execution’ is useful, but it does not explain how to implement the three core processes to achieve strategy goals.
Strategy execution as a system, suggests six sequential steps for implementation. It also proposes a measurable value system which can be derived as the strategy is executed (balanced scorecard). The six stages of in the system are Develop strategy, Plan the strategy, Align the organization, Plan operations, Monitor and learn, Test and adapt. This system of linking strategy to operations was proposed by Robert S. Kaplan and David P. Norton.
The process view does not provide details to implement strategy and the systems view presents many substeps (about 26) that it is overwhelming to follow. By combining the principles of process and system view points, a step-by-step execution process may be developed. The following steps are suggested for turning the strategy into operational reality.
- Visualise the Strategy
Before beginning to act, the company management must ascertain that a robust strategy (a strategy clearly stated and focused) is available with them. If the strategy is precisely defined, clearly communicated and flawlessly understood by the stakeholders such as employees, customers, investors, partners, etc. the chances of success are increased, and its implementation becomes much easier. Hence the top management must ensure that they have an energizing, plausible and simple strategy.
Tesco, the company in focus here, is a British multinational grocery and general goods retailer. After Wal-Mart, it is the second-largest retailer in the world in terms of profits and revenues. The core strategy of Tesco is to buy, move and sell products and services to the customers and use customer insights to do this slightly better each time. This is very simple, easy to understand and very much possible to be implemented (Tesco, 2012). Tesco has a very good strategy in hand. Every company must have a strategy that is written in less than thirty words and easy to comprehend for all.
- Develop Business Metrics
The business success should be measured, and key elements of the visualized strategy should be linked to performance measure. A set of strategic performance metrics should be gathered into a ready reckoner, for example, a Balanced Scorecard, or other measuring frameworks. The metrics must help the stakeholders to gauge the progress in strategic direction. Tesco retail business focuses on four simple activities i.e. insight, move, buy, and sell. Tesco needs to develop metrics for each of these activities. The customer insights are gathered from customer interactions and are used for driving incremental improvements in customer services. The metrics for insight dimension may be the number of insights gathered. Tesco must reckon and review the customer insights on a day to day basis because all their business activities depend on this input. Similarly, Tesco can develop metrics for the ‘sell’ activity. The number of shopping trips a typical customer makes to Tesco and the level of satisfaction the customers get from shopping could be the metrics of ‘Sell’ function.
- Communicate the Strategy
Executing strategy can be extremely difficult if the strategy is not understood well, or performance expectations are not communicated. Before the launch of the strategy, preparation for communicating the strategy is needed. The management must decide what will be the strategy message, when, by whom and at which occasions. Communicating the strategy is part of the implementation process. Leaders must communicate the visualized strategy to the stakeholders in a simple way that will help them understand easily. Tesco can organise, seminars, discussions, meetings, lectures, webinars, blogs, workshops, video shows, etc. to communicate to the stakeholders about the strategy.
- Align roles and relationships
Jim Collins (1998) in his book ‘Good to Great’ presents that in great organizations strategic direction is not what is decided first; instead they bring right people on the board and allow the misfits to leave. Only when the right people team up, the strategic direction is decided. The activities within an organization can be divided into core, maintenance, supportive and traditional. The key business activities are the core of the organization. The core activities must be performed by select few who are capable of understanding and implementing the strategy. This core group can later form their own teams to carry out the strategy. Similar process may be repeated throughout the organization. In a large company like Tesco, employees and middle management may want to know they are making a meaningful contribution to the business success. Tesco senior leaders must ensure that managers and employees at all levels are made aware of their respective roles and relationships for achieving the strategic goals. This is one of the most critical features of the execution practice.
- Identify strategy tasks
It is observed in many large organisations that many projects are ongoing at any point of time, but very rarely only the people in the organization have a firm hold on the control of these projects. Many of the projects do not contribute to the business of an organization. The first step in improving project- strategy link is to examine whether the execution of the project will have a beneficial effect on the targeted customer satisfaction. Tesco needs to take up only those projects that contribute to the improvement of insight, buy, move and sell functions.
- Align the projects
After identifying the strategic projects, they must then be linked to the strategic goals of the organization. In this step, compare every project, either proposed or ongoing, with the strategic goals to determine the alignment. As discussed earlier, only those projects that directly impact the strategy should be funded and continued. Since Tesco is a large company, the skills of evaluation of the projects with respect to strategy must be taught to managers in each store. Once managers master those skills, the projects in each of the outlets may be reviewed and ascertained whether they are in line with the strategy.
- Manage projects
. All the managers in the organizations must develop competence in project management. There are various certifying bodies that evaluate the knowledge of project manager. In certain organisations, projects receive very little management and in others projects persist beyond their scheduled completion. Tesco may coordinate and control the approved projects through special officers with the responsibility for reviewing both progress and performance.
- Review Progress
The strategy execution, as with other areas of management, follows the doctrine; what is measured gets done. Strategy and its implementation steps need to be reviewed periodically to ensure financial commitments, customer satisfaction, business growth, etc. After the launch of each improvement, the results of the implementation processes should begin to provide feedbacks. A well-established review process is available with Tesco; they need to maintain a regular duration between reviews. For maintaining commitment and involvement and for people to take the work seriously, regular review is needed.
- Reward Performance
After communicating the strategy, aligning the employees, identifying projects, etc., Tesco managers must develop a system with incentives that promote behaviors consistent with the strategy. A properly designed reward system will bring in line the well-being of the employees with their contributions to strategy execution and the achievement of goals. For making Tesco a high-performing organization, they have to build a cadre of aspiring people who relish the opportunity for growth, seek a challenge, thrive in a performance-oriented environment, etc. One step Tesco can take is to tie incentives to outcomes linked to good strategy execution and financial performance.
Organising Resources for Strategy Implementation
When a business strategy is decided, right amount of resources must be arranged, so that the strategy does not get derailed dues to dearth of resources. Implementing strategy with abundant resources is a myth, resources are limited and they must be applied in a prudent manner. Aileron (2012) in Forbes magazine recommends a three-pronged method for this.
Aileron (2012) advises to initially invest in the core businesses only so that all core activities are supported well. If resources are not available for non-core and lesser projects, without hesitation it may be deferred to the future or even may be eliminated from the plan. Second instruction is to supply resources to those projects that have the potential for earning revenues in future. Such projects require more resources and attention. Finally, he suggests weighing the risks of the projects and choosing the ones that promise stable long-term returns. We must bear in mind that many times the costs of implementation are underestimated and the enterprise must develop the skill of estimation and managing the project with in that limit.
Time line and Evaluation of Strategy execution
A strategic plan must have goals / milestones, strategies to achieve the goals, and a timeline for implementation. The major activities for implementing a strategy are already described earlier. Those activities need to be scheduled in a timely manner to reach the goals in most efficient manner. The activities may be arranged in the fallowing manner, beginning with Strategy formulation, Developing an implementation plan, establishing an organizational structure, aligning and allocating resources, initiating the required projects (serially or parallel), reviewing the progress, evaluating the project and finally rewarding the stakeholders. This sequence may be followed with exact dates and allocating responsibility to people. The proposed time line may be used as a guide for reviewing planning documents with strategy executioners and other stakeholders.
With respect to evaluation of strategy execution, there are many interventions and evaluation methods for assessment. Some of the prominent evaluation methods suited for strategy are cross sectional surveys, questionnaire surveys, review of financial data, focus groups, interviews, media analysis, observation, etc. Depending on the nature of the project the evaluation methods may be chosen.
Conclusion
It must be noted that, though a logical plan for strategy execution may be laid in less than a day, it is extremely difficult to implement one. Many reasons are attributed for this; key weakness to success is that many business managers do not know about strategy execution or how to approach it. With the nine steps outlined earlier have the potential for achieving success in business strategy, but the strategic team must be careful during every step of action. Some of the key decisions need to be taken on the ground. We are wishing the company all success in strategy execution.
REFERENCES
Barrows, Ed. (2014). What is Strategy execution? American Management Association, Retrieved in May 2014. http://www.amanet.org/training/articles/What-Is-Strategy-Execution.aspx
Kaplan, R., Norton, D., The Execution Premium: Linking Strategy to Operations for Competitive Advantage, Harvard Business Press, 2008.
Aileron (2012) “Six Areas of Focus for Executing Strategy and Ensuring Strong Performance”, Forbes, Retrieved in May 2014, http://www.forbes.com/sites/aileron/2012/11/05/six-areas-of-focus-for-executing-strategy-and-ensuring-strong-performance/
Collins, J (1998) ‘Good to Great’, Collins, New York.
Bossidy, L., & Charan, R. (2002) “Execution: The Discipline of Getting Things Done”, Crown Business, New York.
