NEW: Strategy formulation and implementation: Everything you need to know

24 Sep, 2022 - 12:09 0 Views
NEW: Strategy formulation and implementation: Everything you need to know

The Sunday Mail

Memory Nguwi

THE season for strategy reviews is upon us.

Many organisations will be embarking on strategy review and formulation sessions.

It is an exciting time for those that do this process well.

Sadly, for many, it’s a ritual without value.

The success of any organisation depends on its ability to generate superior returns on the resources it employs.

To achieve this, an organisation must align its resources and capabilities with the opportunities it seeks to pursue.

This begins with formulating an effective strategy and culminates in its execution. Most organisations recognise the importance of having a well-conceived strategy, but many struggle to execute it effectively.

As you embark on this journey, you must remember that 90 percent of companies’ strategies are not implemented for various reasons.

That is a scary statistic.

Executing a strategy is a critical differentiator between successful and unsuccessful organisations.

A well-executed strategy enables an organisation to use its resources and capabilities best to achieve its objectives.

Many factors contribute to an organisation’s ability to execute its strategy effectively.

This article will discuss the importance of strategy execution and leadership’s role in successfully executing a strategy.

1) Strategy can be defined as the process of choosing where to play and how to win. Strategy is about making choices and making sure those choices are fulfilled. It includes deciding on what to do and what not to do.

Most leadership teams find it difficult to make hard choices. They struggle to decide on exiting specific geographical markets when evidence shows that such markets will never bring profitable value. They struggle with abandoning certain products or services when it is evident that such products or services will never be profitable.

They struggle to kill certain businesses because such businesses are eating value instead of creating value. These are all tough decisions you need to make as you craft your strategy. Your strategy should be centred on where to play and how to win.

2) When it comes to strategy execution, the ability to align the organisation around a common goal is essential. Strategy execution is often a challenge for organisations.

A few common challenges include a lack of alignment of the organisation, difficulty translating strategy into actionable objectives, and inadequate performance measurement.

3) Many businesses create what they call strategies when they are not strategies. The strategy should not focus on more than ten priorities. Be razor-focused on a few priorities resulting from a thorough understanding of your business.

Spreading your focus and resources on too many things will not help your business. I have seen strategy documents that run into hundreds of pages. A good and focused strategy written with clarity should not exceed more than 30 pages.

Preparing a thesis and calling it a strategy will discourage your managers from reading the document.

4) Who should participate in crafting your strategy? A good strategy should be consultative. Depending on the nature of your business, you may require to consult your employees, customers and other stakeholders, i.e. strategy formulation pre-work) before you go to a strategy formulation retreat.

The value of consultation is immeasurable. Employees will likely support a strategy they would have contributed to its formulation. In any case, employees are key to your business.

They know what works and what does not. They know what customers are complaining about every day. They know what is not working in the plant.

If you give them an opportunity, they will tell you what they think should be done to solve some of the problems. You can use processes to harness key stakeholders’ contributions as you prepare for your strategy formulation session.

5) I have noted that many leaders get side-tracked by focusing on what model to use in crafting the company strategy. Worry less about the models and instead focus on developing the strategy.

I usually use a combination of the balanced scorecard and the blue ocean strategy. Simplicity matters regardless of what model you choose. Regardless of the model, the strategy should be clear, so that your lowest-level employees can understand it without further interpretation.

6) Once the company strategy has been crafted, sadly, that is where it ends. People meet again after 12 months to review a strategy they never implemented.

They waste time again crafting another strategy, which is the same strategy with new dates. What a tragedy and a waste of resources. Companies need to have a strategy execution mechanism in place for them to win.

First, the strategy must be articulated to all stakeholders so that you get buy-in. The corporate strategy would need to be cascaded to every department and individual in the organisation.

The cascading process must ensure the alignment of goals and targets throughout the organisation. The cascading process must ultimately end up with individual goals and targets. Others convert these into performance contracts.

7) You must hold people accountable for the delivery of your strategic goals and initiatives. Reward those that are performing and censure those not delivering. If there are no consequences to non-delivery or delivery, people will not bother.

8) Execution is transforming strategic plans into actions to achieve strategic objectives and goals. It involves coordinating and mobilising resources to implement plans and achieve desired outcomes.

To be successful, execution must be aligned with strategy. This means that the resources and capabilities of the organisation must be aligned with the opportunities it seeks to pursue.

9) A well-conceived strategy is based on a thorough understanding of the organisation’s strengths and weaknesses and the opportunities and threats it faces.

The strategy should be designed to exploit the organisation’s strengths and minimise weaknesses, while taking advantage of opportunities and avoiding or mitigating threats. For a strategy to be effective, it must be executed successfully.

10) Strategy execution is a process that can deliver intended results and realise expected value from an organisation’s strategic plan. Many organisations struggle to execute their strategy effectively. Several challenges can make strategy execution difficult, including inadequate planning, unrealistic assumptions, ambiguous or competing priorities, and inadequate resourcing.

Organisations can take specific actions at each stage of strategy execution to overcome these challenges.

11) Strategy execution challenges arise in many forms. Decisions made in the past may no longer be effective, new competitors may have entered the market, or technology may have changed the playing field.

Whatever the source of the challenge, organisations need to have a process for responding to these challenges.

Even a great strategy may fail if it is not executed well. Strategy execution is a dynamic process that is constantly evolving in response to changes in the external environment and the organisation’s internal capabilities.

Strategy execution follows a disciplined process that starts with the right culture. The right culture is built on trust, transparency, and accountability.

Each of these elements is essential to successful strategy execution. Organisations with a disciplined approach to strategy execution are more likely to complete key initiatives on time and within budget.

The execution of a strategy requires the coordination of resources and activities across all levels of an organisation.

*Memory Nguwi is an occupational psychologist, data scientist, speaker, & managing consultant- Industrial Psychology Consultants (Pvt) Ltd, a management and human resources consulting firm.Email:[email protected] or visit our websites https://www.thehumancapitalhub.com/ and www.ipcconsultants.com

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