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Strategy Execution Difficulties

Strategy is executed over time by managers in every level of a company as they commit resources, programs, people, and facilities to the business strategy. So business leaders concerned with strategy execution need to know who controls which resources and who has the most influence on strategy execution.

Who Actually Makes the Key Decisions

To effectively drive business strategy execution, company leaders need to know the company inside and out and discover who actually makes the key decisions. Leaders may not be aware that they’re allocating resources in a way that doesn’t align with business strategy execution.

You need to pinpoint and then influence those managers whose decisions drive or inhibit business strategy execution. This way you can ensure your managers are allocating resources in a way that aligns with the organization’s strategy.

Business strategy execution is the critical business issue and central to the executive role. While strategy execution is difficult, it shouldn’t be viewed as unmanageable.

What Drives Strategy Execution

But what drives strategy execution? As execution is embedded in the fabric of business, numerous factors are at work.

high performance — Companies that tend to have high performance in revenue growth, profitability, and customer satisfaction often have existing skills that enable strategy execution. Also, companies that have high performance results are often better at clearly communicating goals, strategy, and focus, which drives strategy execution.

create and communicate — If a company can attain clarity when communicating business strategy, it’ll be better able to execute the strategy. But companies must be aware of the difference between understanding the value of a clear strategy and delivering clear communication on how strategy must be executed.

alignment — Ensuring your strategy is aligned with company vision and goals helps to drive execution. A business strategy that supports the mission of an organization, as well as unit goals, will garner more employee support and will be easier to clarify when communicating execution steps.

speed and ability — Like clear communication, companies value the ability to make quick decisions and act when an opportunity arises, but it’s a difficult practice to master. Companies must be able to adapt to rapid changes in order to be effective at strategy execution.

engagement and capability — Successful strategy execution requires all employees, at all levels in a company, to be engaged and capable. Employees must feel included, interested, and actively participate in strategy execution. As well, they must have the skills necessary to do what’s asked of them.

execution-focused leadership — Companies can use succession planning to groom leaders with strategy execution skills. This ties in with the idea that high-performing companies effectively drive strategy execution.

customer demand — The demands of customers are consistently driving business strategy execution, especially as technology is growing and changing at such a fast rate.

resource allocation — How company resources are allocated is another driver, and sometimes barrier, to business strategy execution.

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Corporate Culture and Strategy Execution

It’s no good having all tiers of the organizational chart focused on getting things done if the company culture simply doesn’t support delivering on plans. The third cornerstone is creating and managing a culture of execution.

There are many benefits of putting in place a culture that promotes execution. There’s an increased likelihood that your company will follow through on its promises. Other benefits include having your workforce aligned toward the same goals, having a clear direction, and feeling appreciated.

Strategy execution requires a specific set of behaviors and techniques. In order to produce strategic results, you need to change the corporate culture to focus on those goals. In other words, you need to change people’s behavior.

In order to change behaviors, company leaders need to identify relevant beliefs. Then you can work to change the reward system, which is embedded in culture. Throughout these changes you should use robust communication, always link culture to strategy, and use the power of shared norms.

Provide Vision and Impetus

Now that you have an idea what makes up a strong culture of execution, you have to determine how to achieve it in your own organization. You can follow four steps to manage and create a culture that supports business execution: provide vision and impetus, offer education and time for socializing, communicate, and reward.

It’s vital to strategy execution that employees at all levels understand where the company is trying to go. You must provide a picture of the end result and explain why this cultural change is good for everyone.

So for step one, provide vision and impetus, you must follow three principles.

1. have clear reasons for change — You should provide everyone involved with clear and honest reasons for strategy execution. If you can clearly show employees a record of poor performance and demonstrate how strategy execution will improve it, it’ll be easier for them to accept the change and work together.

2. live the change — The leader of strategy execution is the person who first communicates vision and impetus. So to set the example for the whole organization, you should also live the change. Your actions will speak louder than words with regard to strategy execution. And if you embody the values of the new culture of execution, employees will likely follow suit.

3. get agreement from key players — A strong culture of execution requires that all key players agree on the vision. Effective strategy execution can only happen if employees at all levels buy in. But before that can happen, employees in all key roles must also be actively involved and in agreement.

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Conducting External Analyses to Improve Your Business

A thorough analysis of the external environment can improve your business plan and help you predict the conditions in which your business may have to operate in the future. 

Such environmental factors may be macro — where things are decided by government economic policy and affect the broader economy — or micro — where things are decided by stakeholders, such as customers, employees, shareholders, and competitors.

A PEST analysis is often used to examine the key macro factors — that is, the political, economic, societal, and technological factors. These factors are inextricably linked. Together they reveal many of the external environmental factors influencing your company’s performance and, subsequently, how you develop your business plan.

  • political — Company operations are affected by political factors such as corporate tax, monetary policy, foreign trade policy, competition law, regulation, and government bureaucracy. Education policy also impacts a business’s ability to recruit qualified employees. Such influences can complicate or delay business development.
  • economic — Company profitability is influenced by bull or bear markets, infrastructure, inflation, interest rates, fuel prices, and exchange rates. These factors affect the price of raw materials and labor, and the ability to sell goods and services.
  • societal — Plans can be affected by societal factors such as the average amount of time people work every week, which typically influences the amount of free time they have to spend elsewhere.
  • technological — Company profitability is influenced by technological advances, as technology can have a sudden impact on an economy. The availability of government funding, investment by competitors into R&D, and new production methods can impact your external environment.

External analysis: scenario planning

As part of an external analysis, you may use scenario planning. Scenario planning can help you visualize the future environment for your business. It adds additional value to your PEST analysis by outlining different scenarios of how your business might operate under different political, economic, societal, and technological conditions.

There are four steps to scenario planning.

1. pinpoint uncertainty and impact — You need to plan for the uncertainty of external factors and the impact on your business plan. Factors that seem certain and positive may later become irregular — for instance, the housing market may boom for 10 years, then become unstable.

2. outline alternative scenarios — You should include any environmental factors that have the greatest uncertainty and greatest risk to the business. You examine these factors and develop two or three detailed alternative scenarios for each.

3. select three scenarios — Combining different possible scenario paths for each factor suggests many potential outcomes. Your goal should be to identify three or four important scenarios. You should choose scenarios that are realistic, diverse, and directly linked to any problems relating to your business plan.

4. write scenario descriptions — Your scenario descriptions should be powerful descriptions that highlight the assumptions you’ve made, the relevant business context, and a time line for how the scenario could unfold.

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The Workforce and Strategy Execution

There are three cornerstones of effective strategy execution. The first of these is leadership behaviour. You need to secure active involvement of company leaders to ensure effective strategy execution.

There are several ways leaders achieve this.

  • set goals and priorities — In order to set clear goals and priorities, leaders should first know the business and understand what needs to be done to realize strategy execution. Leaders may also foster success by focusing on only a few prioritized goals. Three or four priorities won’t tax resources, and most organizations need to focus on only a small number of goals to realize effective execution.
  • be decisive and take action — Effective leaders must also be decisive and be able to take action. Often there will be delays in plans. In order to exhibit the competencies, leaders must make decisions and take actions that move the process forward. The decisions leaders make and the actions they take should all focus on solutions.
  • follow through and be accountable — Following through is the only way to ensure everyone is accountable. Sometimes having a few simple goals can mean people don’t take the execution strategy seriously. By devising ways to follow through and check in with those involved, leaders can ensure they keep execution moving forward.
  • empower people — Effective leaders are also coaches, someone who can clearly communicate what the goals are and provide feedback on how those goals can be reached. Effective leaders will also step back and empower people to achieve their goals. This approach benefits strategy execution as empowered employees feel they have ownership of the project.
  • know yourself and your capabilities — Leadership is something that has to come from the person you really are. For execution to be effective, leaders must have strength of character. Leaders must be able to provide an honest assessment of the organization, people, their own abilities, and work to be done.

The Leadership Role

Leaders usually come from upper management and fulfill a number of leadership roles. They are responsible for holding business units and individuals accountable and making decisions on strategy, message, and corporate culture. Both business leaders and line managers are responsible for maintaining the culture and mindset of the workforce and for identifying and developing employees.

Leaders must hold business units and individuals accountable. To do this, they have to clarify expectations and measure results. This ensures that employees know what’s expected of them.

Leaders should also identify and reward top performers and address those who are under performing. If you can implement a high-functioning human resources management system you may find employees begin to encourage each other to excel at their jobs.

Leaders are also responsible for making decisions on strategy, message, and corporate culture.

Leaders at every level are responsible for maintaining the culture and mindset of the workforce that reports to them. A central focus is needed so employees understand how to execute the strategy and become accountable for improving their own performance.

Middle Management Responsibilities

Whereas leaders are mainly responsible for defining strategy, middle management is responsible for strategy execution.

Line managers must understand both the strategy and the workforce assigned to execute it to ensure the right people are in place. They must also deliver the expected performance levels.

They must create a high-performance culture that supports strategy execution. Line managers must develop workforce capabilities with strategy execution in mind.

In strategy execution, line managers are responsible for clarifying performance expectations for each report. Managers must get across the message that every member of the workforce is expected to step up and give it their all. 

And, if managers set clear attainable goals, employees will be better able to improve their performance because they’ll know what’s expected of them, and they’ll be motivated to succeed.

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