how much of the companies that have a designed strategy (75% of all) actually achieve that performance?
less than 10%
what are the obstacles to strategy implementation? (6) (there is more)
- # of people involved (everyone in the company) -> a lot of input and possibility for mistakes
- possibility of planning & implementing processes to separate (mng only plans)
- focusing on short-term results
- time (usually takes more than planned - several years)
- lack of guidelines (models) for implementation from mng
- lack of coordination
def strategy implementation
set of activities required for the execution of a strategic plan
state the strategy implementation model (EXAM)
- (developed strategy) -> presented in a strategic map
- document the strategy
- define responsibility
(simultaneously)
- adapting organisational culture
- adapting organisatonal structure
- define KPIs -> develop specific plans -> align incentive systems
- communicate the strategy
- manage change and proper leadership
why is documenting the strategy important?
because short sentences in the strategic map (of the first point in the strategy implementation model) can be misunderstood
state the descriptions of the strategy activity implementation table (first four cells)
- strategic activity (definition)
- description of strategic activity (if needed)
- manager (name / position)
- team members (involved, but not responsible)
who defined the need to adapt the organisational structure?
Chandler: ‘Structure follows strategy’
- cost-efficiency strategy: mechanical structure
- differentiation strategy: organic structure
def macro-organisational structure
hierarchy within the company
def micro-organisational structure
descriptions of work positions
describe how the organisational structure is adapted
strategy -> change macro-organsational structure
operational planning objectives -> change micro-organisational culture
def organsational culture
complex set of ideologies, symbols and core values that are shared throughout the company and influence people behavior and how the company conducts its business
describe how the organisational culture is adapted to the strategy (depending on what the ‘current state’ of it is)
- culture fits strategy: maintain
- culture doesn’t fit: change culture
- no culture: create one
long term processes!
why are KPIs needed and what do they mean?
key performance indicators, needed to ensure better implementation of strategy
for what should KPIs be defined?
for strategic activities and outcomes, so they can be tracked through time
what is the purpose of developing specific plans?
to break the strategy into smaller pieces which are more manageable - if needed (not always)
state 6 elements of strategy concretisations
- projects
- programs
- tactical plans
- budgets
- action plans
- procedures
def project + example
= complex tasks, that are more or less unique and extend over a longer period of time
construction of a new production plant
def program + example
= sets of activities needed to accomplish a plan
increasing the market share in Russia
def tactical plan + example
= systems of annual (partial and integral) plans
annual sales plan in a specific market
def budget + example
= cost of the programs and other plans (usually annual) a budget of direct material and labor costs
def action plan + example
= precisely specified activities used to operationalize the programs and tactical plans
action plan of a training seminar for production workers
def procedure + example
= sequence of steps needed to do the job
specifically prescribed and standardized steps
how to serve a guest in a restaurant (e.g. McDonald’s)
state the descriptions of the strategy activity implementation table (last 3 cells)
- projects, programs, tactical plans, procedures (list and explain all plans in a sequential order so the strategy will be executed)
- risks and uncertainties (internal and externals)
- expected outcome (at least one)
why is it important to align incentive systems and strategy?
so we can make sure that the strategy will successfully implemented, bc people will work for it
