Course taster

Important considerations for strategy implementation

Once a strategy and a set of policies have been formulated, the focus of strategic management shifts to implementation – the sum of the activities and choices required for the execution of a strategic plan. This is the process by which strategies and policies are put into action.

Programmes, budgets and procedures

Although implementation is usually considered after a strategy has been formulated, it is a key part of strategic management. To start the implementation process, it is important that strategic managers should ask the following questions:

Historically, the methods and problems of strategy implementation have received less attention than those of strategy formulation (Hrebiniak and Joyce, 1985), although more recent theories have appreciated the difficulties that organisations face when implementing their strategies (Herold and Fedor, 2008). This process is intrinsically interwoven with the major change that a firm needs to undergo for the new strategy to become successful.

Such a change can be best defined in terms of programmes, budgets and procedures. Their development represents the first step of the strategy implementation process.

A programme is a description of the range of, and the interrelationships among, the activities and projects that need to be undertaken for the accomplishment of a chosen strategy. The purpose of a programme is primarily to make the strategy action oriented.

A budget is an approved financial resource that is defined through the analysis of the expenses and benefits expected from delivering the organisation's programme. Budget planning enables the manager to make estimates of the costs of implementing the strategy. Note that under real conditions, it is a very rare and unlikely occasion that budgets defined from the outset of a strategic change are sufficient and available for implementing this change. Management is always supposed to be able to make appropriate amendments to the budgets in a dynamic way. Such flexibility is key to successful strategy implementation, irrespective of its scale.

Procedures are the sequential actions aimed at the delivery of a particular programme. They should be developed based on the information described by the programme goals and the budgets allocated for their implementation.

The five Cs of strategy implementation

The following five Cs are:

the basic requirements needed to keep the separate units in any organisation working together to achieve the objectives of a strategy. White (2004)

Coordination - Which must take place between different stakeholders of the company.

Communication - Which must be based on the continuous transmission of information between different stakeholders in an accurate and consistent fashion.

Command - Which is issued in a downward direction in accordance with an organisation's management structure, but only in the most critical situations when a conflict must be resolved or action taken.

Control - Which must be continuously exercised by a company's decision-makers for assurance of the correct activities taken by the organisation in following their decisions.

Consensus - Which must be reached among the organisation's employees at all levels of the organisational hierarchy for any conflict resulting from personal disagreement with strategic change to be neutralised.

Read more about the five C's – https://www.strategy-execution.co.uk/article/five-cs-for-successful-strategy-execution.

Corporate synergy

One of the goals to be achieved in strategy implementation is that of synergy among functions and business units. Synergy is said to exist for a divisional organisation if the return on investment (ROI) of each division is greater than the return would be if each division were an independent business. Four types of synergy are suggested (Mintzberg, 1973):

  1. Marketing
  2. Operating
  3. Investment
  4. Management

These synergies, however, are not automatic. In order to achieve them, an organisation must not only encourage a supportive culture, but also develop an implementation programme, reorganising and combining operations where necessary. Watch the following video to learn more about steps in managing strategy implementation:

7 Steps to Successful Strategy and Implementation

View 7 Steps to Successful Strategy and Implementation video transcript

Video embed-https://www.youtube.com/watch?v=LkesApAMSQk