Strategy Implementation - Plan, Process and Examples

Strategy Implementation: Plan, Process & Examples Strategy Implementation Definition Let's say that a local hardware store recently experienced a slump in sales and had to lay off two of its employees. The owner/manager is attempting to come up with a new business strategy to improve his situation and once again become a market leader. Strategy implementation consists of putting plans in place by formulating a strategy to achieve the organization's goals and objectives. It can also be described as the way a business might develop, use, and integrate the organizational hierarchy, systems, and culture to pursue strategies that will result in competitive advantage and improved performance. In the example, the organization's goal is increased sales and regaining its market position. The strategy will be specific actions that will realize the goals. Definition of Strategy In the hardware store, the overall objective is known: attract and keep customers, increase sales and improve performance. The strategy describes how these objectives can be achieved. For the hardware store it could be increasing promotional events or becoming involved in the local community through public relations. Why Do We Need a Strategy? As with our hardware store, organizations need strategies, which assist them with answering specific questions regarding the goals of a business. There are three main questions: 1. Who are the people that make up our target market? This could be local building contractors, handymen and homeowners, for the hardware store. 2. What is the value proposition that we will use to differentiate our products and services from our competitors? This could be the high end brands that we carry and the quality perception associated with them. Or it could be our on-time delivery systems and after-sales service. 3. What are the capabilities we have that will assist us with being the best in the market at delivering that value proposition? This could be our well-trained employees who are also experts in the construction industry. Implementation Even excellent strategies will fail if they are not implemented properly. The following are the steps that must be followed for successful strategy implementation: Step 1: Organizational development (OD) with the potential of carrying out a strategy successfully; for example, training of employees who will have the capability of carrying out the required activities that will contribute to fulfilling the strategy. OD refers to the professional development of employees. Step 2: Utilizing financial resources to engage in activities that are essential to the strategy. Each planned event and the associated expenses must be traced directly to the strategy that the organization wants to realize. So, any activity that does not contribute to the strategy cannot be done. Step 3: Formulating company policies that support the strategy. For example, if your strategy includes improving your human resources, then the company would need policies that help to identify the type of training needed by each employee, and how the training will be received. Step 4: Ensure continuous improvement through superior programs and policies. Superior programs and policies are those that achieve their objective more completely, and/or, in less time than previous ones. This improvement therefore, is based on previous information from policies of the past for the particular organization. To improve a program, the organization must first identify what worked and what did not work for previous plans, then make changes to come up with a superior plan. Step 5: Linking employee rewards directly to their departmental, as well as the company's strategic goals. Employee goals should be set at both the department and corporate level, ensuring that all departments are aligned to the overall strategy of the organization. Step 6: Utilizing strategic leadership skills: This is a style of leadership that offers employees vision and direction towards achieving growth and continued success for the organization. All company executives must receive skills training on effecting change, strategy formulation, and strategy implementation. Real World Strategy There are many organizations that have great strategic plans, but no plan for the implementation process. Strategy implementation is crucial in order for the strategy to take hold, and bring organizational benefits. However, some organizations fail to plan the actual implementation: • • • 60% of companies do not link their strategy to budget decisions. 75%of companies do not connect employee performance incentives to the strategy. 86% of business owners are spending less than 60 minutes per month talking about strategy implementation. • 95% of the workforce do not have a full understanding of their organization's strategy. Strategy Implementation Strategy Implementation •refers to the execution of the plans and strategies, so as to accomplish the long-term goals of the organization. •It converts the opted strategy into the moves and actions of the organization to achieve the objectives. Simply put, strategy implementation is the technique through which the firm develops, utilizes and integrates its structure, culture, resources, people and control system to follow the strategies to have the edge over other competitors in the market. Strategy Implementation is the fourth stage of the Strategic Management process, the other three being a determination of strategic mission, vision and objectives, environmental and organizational analysis, and formulating the strategy. It is followed by Strategic Evaluation and Control. Process of Strategy Implementation 1. Building an organization, that possess the capability to put the strategies into action successfully. 4. Such policies and programs are employed which helps in continuous improvement. 2. Supplying resources, in sufficient quantity, to strategy-essential activities. 5. Combining the reward structure, for achieving the results. 3. Developing policies which encourage strategy. 6. Using strategic leadership. The process of strategy implementation has an important role to play in the company’s success. The process takes places after environmental scanning, SWOT analyses and ascertaining the strategic issues. Prerequisites of Strategy Implementation • Institutionalization of Strategy: First of all, the strategy is to be institutionalized, in the sense that the one who framed it should promote or defend it in front of the members, because it may be undermined. • Developing proper organizational climate: Organizational climate implies the components of the internal environment, that includes the cooperation, development of personnel, the degree of commitment and determination, efficiency, etc., which converts the purpose into results. • Formulation of operating plans: Operating plans refers to the action plans, decisions and the programs, that take place regularly, in different parts of the company. If they are framed to indicate the proposed strategic results, they assist in attaining the objectives of the organization by concentrating on the factors which are significant. • Developing proper organizational structure: Organization structure implies the way in which different parts of the organization are linked together. It highlights the relationships between various designations, positions and roles. To implement a strategy, the structure is to be designed as per the requirements of the strategy. • Periodic Review of Strategy: Review of the strategy is to be taken at regular intervals so as to identify whether the strategy so implemented is relevant to the purpose of the organization. As the organization operates in a dynamic environment, which may change anytime, so it is essential to take a review, to know if it can fulfil the needs of the organization. Even the best-formulated strategies fail if they are not implemented in an appropriate manner. Further, it should be kept in mind that, if there is an alignment between strategy and other elements like resource allocation, organizational structure, work climate, culture, process and reward structure, then only the effective implementation is possible. Aspects of Strategy Implementation • Creating budgets which provide sufficient resources to those activities which are relevant to the strategic success of the business. • Supplying the organization with skilled and experienced staff. • Conforming that the policies and procedures of the organization assist in the successful execution of the strategies. • Leading practices are to be employed for carrying out key business functions. • Setting up an information and communication system, that facilitate the workforce of the organization, to perform their roles effectively. • Developing a favorable work climate and culture, for proper implementation of the strategy. • Strategy implementation is the time-taking part of the overall process, as it puts the formulated plans into actions and desired results. What is Innovation Strategy? - Definition & Examples Innovation strategy is a plan to help enhance technology. Now, we will discuss the use of a successful innovation strategy, how to be an innovative leader, and how to focus on innovation. Innovation Strategy Have you ever wondered exactly what goes into creating an amazing and fun technological device? Innovation plays a huge role in how products are created. An innovation strategy is a plan used by a company to encourage advancements in technology or services, usually by investing money in research and development activities. An innovation strategy is essential for companies that want to gain competitive advantage. An effective innovation strategy should be inspiring and add something unique to the product or service being developed. As a company, you want to increase the value of a current product or create something brand new that will draw the consumer in. Innovation should push boundaries and be out of the ordinary. When thinking about innovation, it's impossible not to think about Apple. Apple has created and continues to create unique products with tremendous success. The iPhone, iPad, and iWatch have all been innovative products. Although smaller companies may not have Apple's global success, the beauty of innovation is that you never know what might happen with a product and the success it can bring your company. Innovation Leadership Leadership plays an important part in how innovation occurs in an organization. Innovation leadership will trickle down from those in charge to other employees. The manner in which messages are communicated to employees can significantly affect the success of a project. Motivation is also important because of its impact on how some employees work. For instance, if Josh is a manager who constantly yells at employees, work might be more stressful, employees may be less motivated, and productivity will most likely go down. Leadership doesn't only come from upper-level management; it also comes from lower-level managers and all team members. An effective leader is able to work with different people and mentor them so that they can achieve their goals. A leader should foster a team environment where individuals have the ability to network and create ideas together. Negative Effect on Motivation The Spitfire Technology Company encourages its employees to work together to help create innovative ideas. Jason has the leadership role this week but is having difficulty with the responsibility. Jason isn't encouraging his team and isn't able to work with the different personalities. His team members are trying to do their jobs. However, Jason's negative attitude has caused them to lose their motivation to create a new innovative product. If Jason's attitude was more uplifting, he would be able to build a better relationship with his coworkers and inspire them to create a new product. Focusing on Innovation Creating the next innovative product is essential, but it's also important for a company to not lose its focus. Introducing multiple products at the same time can cause a loss of focus. It can also lessen the amount of time available to perfect each product. Even technological giants like Apple focus on and launch a limited number of products at the same time. It's also essential for the company to create something that's different and unique. No idea is too big when it comes to innovation. So, let's say that the sales of Spitfire Technology Company have started soaring. The Spitfire Technology Company developed a new product to launch. They decided to focus solely on a new type of touchscreen laptop that also has a touchscreen keyboard. Instead of launching multiple products simultaneously, they decided to make this single launch worth its research and development costs. Consumers are now focused on this one product and sales are soaring! Lesson Summary Let's take a couple of moments to review what we've learned. Strategy implementation consists of putting the chosen strategy into action to achieve the organization's goals, strategies, and objectives. It can also be described as the way that a business ought to develop, use, integrate the organizational hierarchy, systems, and culture to pursue strategies that will result in competitive advantage and improved performance. Even excellent strategies will fail if they are not implemented properly. An innovation strategy is a plan made by a company to encourage advancements in technology or services, usually by investing money in research and development activities. Leadership plays an important role in how innovation occurs in an organization. Innovation leadership begins with upper-level management and trickles down to other employees. When creating an innovative product, it's important for a company to remain focused. Introducing too many products at once can result in loss of focus and the time needed to perfect them