Strategy implementation

Strategy implementation

· Commander approach
· Organizational change approach
· Collaborative approach
· Cultural approach
· Crescive approach

Commander approach
· Manager determines “best” strategy
· Manager uses power to see strategy implemented
Three conditions must be met
· Manager must have power
· Accurate and timely information is available
· No personal biases should be present

Commander approach
Limitations
· Can reduce employee motivation and innovation
Advantages
· Managers focus on strategy formulation
· Works well for younger managers
· Focuses on objective rather than subjective

Commander approach – the manager will determine the “best” strategy either alone or with the help of a group of experts. Once the desired strategy is formulated, the manager passes it along to subordinates who are instructed to execute the strategy. In this scenario, the manager does not take an active role in implementing the strategy, but rather uses explicit or implied power to see that the strategy is implemented. There are three conditions that must be met in order for the new strategy to be implemented. First, the manager must have enough power to command the implementation of the strategy. It should be recognized that implementation under this approach is resisted if the new strategy threatens the position of employees. Second, accurate and timely information regarding the strategy must be available, and the environment in which the company operates should be reasonably stable. If the environment is changing so that information becomes dated before it can be assimilated, effective implementation under the approach is unlikely. Finally, the manager formulating the strategy should be insulated from personal biases and political influences that might affect the outcome of the strategy.

One drawback to this approach is that it can reduce employee motivation and employees who feel that they have no say in strategy formulation are unlikely to be very innovative. However the approach can work in smaller companies within stable industries.
Advocates of this approach say that managers who utilize it can gain a valuable perspective from the company and the approach allows these managers to focus their energies on strategy formulation. Second, young managers in particular seem to prefer this approach since it allows them to focus on the quantitative, objective aspects of a situation rather than on the qualitative, subjective elements of behavioral interactions. Many young managers are better trained to deal with the objective rather than the subjective. Finally, such an approach may make some ambitious managers feel powerful in that their thinking and decision making affects the activities of the workforce (people).

Organizational change approach
· Focuses on the organization
· Behavioral tools are used
· Includes focusing on the organization’s staffing and structure
· Often more effective than Commander
· Used to implement difficult strategies

Organizational change approach
· Limitations
· Managers don’t stay informed of changes occuring within the environment
· Doesn’t take politics and personal agendas into account
· Imposes strategies in a “top-down” format
· Can backfire in rapidly changing industries

The Organizational Change approach focuses on how to get an organization to implement a strategy. Managers who implement this approach assume that a good strategy has been formulated and view their task as getting the company moving toward new goals. The tools used to accomplish this approach are largely behavioral and include such things as changing the organizational structure and staffing to focus attention on the organization’s new priorities, revising planning and control systems, and invoking other orgainzational change techniques. Because these behavorial tools are used, this approach is often more effective than the Commander Approach and can be used to implement more difficult strategies.
However, it does have several limitations that may limit its use to smaller companies in stable industries. It doesn’t help managers stay abreast of rapid changes in the environment. It doesn’t deal with situations where politics and personal agendas discourage objectivity among strategists. And since it imposes strategy in a top down fashion, it is subject to the same motivational problems as the Commander approach. Finally, it can backfire in rapidly changing industries since the manager sacrifices strategic flexibility by manipulating organizational systems and structures that may take a long time to implement.


Collaborative approach
· Enlarges the Organizational Change Approach
· Manager is a coordinator
· Management team members provide input
· Group wisdom is the goal

Collaborative approach
· Advantages
· Increased quality and timeliness of information
· Improved chances of effective implementation
· Limitations
· Contributing managers have different points of view and goals
· Management retains control over the process

Collaborative Approach – The manager in charge of the strategy calls in the rest of the managemetn team to brainstrom strategy formulation and implementation. The role of the manager is that of a coordinator. Other members of the organization’s management team are encouraged to contribute their points of view in order to extract whatever group wisdom may be present. This approach overcomes two key limitations present in the previous two approaches. First, by capturing information contributed by managers close to operations, it can increase the quality and timeliness of the information incorporated in the strategy. Also, it improves the chances of efficient implementation to the degree that participation enhances strategy commitment.
This approach overcomes two key limitations present in the previous two approaches. First, by capturing information contributed by managers close to operations, it can increase the quality and timeliness of the information incorporated in the strategy. Also, it improves the chances of efficient implementation to the degree that participation enhances strategy commitment.

However, it may result in a poorer strategy since the strategy is negotiated among managers with different points of view and possibly different goals. This may reduce the chances of management’s ability to formulate and implement the “best” strategy. Furthermore, it is not really collective decision making from an organizational viewpoint since management retains centralized control over the strategy. This can lead to political problems within the organization that may impede rapid and efficient strategy formulation and implementation.


Cultural approach
· Includes lower levels of the company
· Breaks down barriers between manage-ment and workers
· Everyone has input into the formulation and implementation of strategies
· Works best in high resource firms

Cultural approach
Advantage
· More enthusiastic implementation
Limitations
· Workers should be informed, intelligent
· Consumes large amounts of time
· Strong company identity becomes handicap
· Can discourage change and innovation

Cultural Approach – This approach enlarges the Collaborative Approach by including lower levels of the company. It partially breaks down the barriers between management and workers since each member fo the organization can be involved to some degree in both the formulation and implementation of the strategy. It seems to work best in organizations that have sufficient resources to absorb the cost of building and maintaining a supportive value system. Often these are high-growth firms in high-technology industries.
It has the advantage of more enthusiastic implementation of strategies by all members of the company. Limitations include: 1. It seems to only work in organizations composed primarily of informed, intelligent people; 2. It consumes enormous amounts of time; 3. It can promote such a strong sense of organizational identity that it becomes a handicap (for example, bringing in managers from outside the organization can be difficult because they aren’t accepted by the other members of the organization since they didn’t “grow up” with the organization); 4. It can promote a strong organizational culture to an extent that change and innovation becomes difficult.

Crescive approach
· Addresses formulation and implemen-tation simultaneously
· Subordinates develop, champion, and implement strategies on their own
· “Bottoms-up” approach
· Ultimate strategy is sum of all “success-ful” approaches

Crescive approach
Advantages
· Encourages middle management to participate
· Strategies are more operationally sound
· Limitations
· Resources must be available
· Tolerance must be extended

Crescive Approach – This approach address strategy formulation and implementation simultaneously (crescive means “increasing” or “growing”). The manager does not focus on performing the formulation and implementation tasks himself, but encourages subordinates to develop, champion, and implement sound strategies on their own. This approach is a “bottom-up” approach rather than a “top-down” approach since it moves upword from the workforce to management. Second, the strategy becomes the sum of all the individual proposals that are “successfully” proposed throughout the planning period. Third, the manager in charge of the strategy shapes the employees’ notions of what are acceptable strategies and acts as a judge evaluating the proposals rather than a master strategist.
Advantages to this approach include:
1. It encourages middle managers to formulate several effective strategies and gives them the opportunity to carry out the implementation phase. This autonomy increases their motivation to make the strategy succeed.
2. Strategies developed by those closest to the firm’s operational and marketing functions are more likely to be operationally sound more effectively implemented.
Limitations include:
1. Resources be available for for individuals to develop good ideas.
2. Tolerance be extended in the cases where failure occurs despite a worthy effort having been made.


Strategic control
· Typically consists of three steps

· Monitoring performance

· Comparing performance to standards

· Taking corrective action where needed


Strategic control simply means monitoring the strategic management process, comparing its performance to specified standards, and then taking action where needed to to ensure that the planned events outlined in the stratgic formulation process actually occur.

Five Phases of Organizational Life Cycle

Five Phases of Organizational Life Cycle

Organizations go through different phases of growth. The first challenge for executives who wish to grow their organizations is to understand what phase of the organizational life cycle one is in. Many organizations will enter decline the decline phase unless there are is in place a rigorous program of transformational leadership development.
Different experts will argue on how many phases there are, but there is elegance in using something easy to remember. We divide the organizational life cycle into the following phases:
Startup. (or Birth)
Growth. This is sometimes divided into an early growth phase (fast growth) and maturity phase (slow growth or no growth). However, maturity often leads to
Decline. When in decline, an organization will either undergo
Renewal or
Death and bankruptcy
Each of these phases present different management and leadership challenges that one must deal with.

The Start-Up Phase
Getting ready is the secret of success.
Henry Ford
In this phase, we see the entrepreneur thinking about the business, a management group formed, a business plan written. For entrepreneurs needing money to kick start the business, the company goes into the growth phase once the investor writes the check. For those the don't need outside funds, start-up ends when you declare yourself open for business.

The Growth Phase
It was the best of times,it was the worst of times.It was the age of wisdom, It was the age of foolishnessit was the spring of hope,it was the winter of despairCharles Dickens, A Tale of Two Cities
In the growth phase, one expects to see revenues climb, new services and products developed, more employees hired and so on. The management textbooks love to assume that sales grow each year. The reality is much different since a company can have both good and bad years depending on market conditions.
In organizations that have been around for a few years, a very interesting thing happens—dry rot sets in. There are many symptoms, some of which we have presented below:
Dry Rot in Symptoms Early In Organizational Life Cycle (.pdf file 276 kb)
That's why many companies have different types of programs relating to organizational development in place.

The Decline Phase
Corporate Insanity is doing the same thing, the same way but expecting different results.
Using the above definition, one finds a tremendous amount of corporate insanity out there. Management that expects next year to be better, but doesn't know or is unwilling to change to get better results.
This simple truth was shown in a 2003 study of 1900 professionals who help businesses in trouble.*
Reasons For Decline
Too much Debt
28%
Inadequate Leadership
17%
Poor Planning
14%
Failure to Change
11%
Inexperienced Management
9%
Not Enough Revenue
8%
*Source: Buccino and Associates: Seton Hall University Stiffman School of Business, Business Week.
If one can detect the symptoms of decline early, one can more easily deal with it. Some of the more obvious signs being: declining sales relative to competitors, disappearing profit margins, and debt loads which continue to grow year after year. However, by the time the accountants figure out that the organization is in trouble, it's often too late.
Dry Rot Symptoms Later in the Organizational Life Cycle (.pdf file 112 kb)

The Renewal Phase
It is not death that a man should fear, but he should fear never beginning to live. Marcus Aurelius


Decline doesn't have to continue, however. External experts have focused on the importance of organizational development as a way of preventing decline or reducing its affects.
A story from Aesop's Fables might help here.
A horse rider took the utmost pains with his charger. As long as the war lasted, he looked upon him as his fellow-helper in all emergencies and fed him carefully with hay and corn. But when the war was over, he only allowed him chaff to eat and made him carry heavy loads of wood, subjecting him to much slavish drudgery and ill-treatment. War was again proclaimed, however, and when the trumpet summoned him to his standard, the Soldier put on his charger its military trappings, and mounted, being clad in his heavy coat of mail. The Horse fell down straightway under the weight, no longer equal to the burden, and said to his master, “You must now go to the war on foot, for you have transformed me from a Horse into an Ass; and how can you expect that I can again turn in a moment from an Ass to a Horse?"
One way to reverse dry rot is through the use of training as a way of injecting new knowledge and skills. One can also put in place a rigorous program to change and transform the organization's culture.
This assumes, though, that one has enough transformational leaders to challenge the status quo. Without the right type of leadership, the organization will likely spiral down to bankruptcy.
Failure
Advice after injury is like medicine after death. Danish proverb
As many as 80% of business failures occur due to factors within the executive's control. Even firms close to bankruptcy can overcome tremendous adversity to nurse themselves back to financial health. Lee Iacocca’s turnaround of the Chrysler Corporation is one shining example.
In some cases, failure means being acquired and merged into a larger organization. In other cases, it occurs when an organization elects or is forced into bankruptcy. This does not signify the organization ceases to exist since it can limp along for many years by going in and out of bankruptcy court