Strategic Implementation

Strategic implementation refers to the process of turning a strategic vision into actionable steps that can be executed within an organization. It involves creating an action plan that aligns the organization’s resources and efforts with its strategic goals, while also addressing potential resistance to change. This process is often complex, as many organizations struggle with effectively implementing their strategies, which can lead to failures despite having viable plans.

Key elements of successful strategic implementation include organizational alignment, where various parts of the company work cohesively towards common goals, and the utilization of frameworks such as the 7-S Model, which encompasses Strategy, Structure, Systems, Staffing, Skills, Style, and Shared Values. Additionally, managing change is crucial, as it often provokes resistance from employees who may feel uncertain or threatened by new initiatives. Strategies for implementation can vary, ranging from directive approaches that promote rapid change to more participative methods that seek to involve employees in the process.

Ultimately, effective strategic implementation requires continuous evaluation and adaptation to ensure that the organization remains on track to achieve its objectives while addressing the diverse perspectives and concerns of its members.

Published in: 2021

By: Beckham, Heather Wall

Subject Terms

Strategic Implementation

This article focuses on the complex task of strategic implementation. Turning a strategic vision into reality requires an action plan that creates consistency in the organization and takes into account potential resistance. This article will concentrate on how a firm can align the organization to help achieve strategic goals and introduce frameworks for managing change.

The process of implementing strategies is no simple task. All too often, firms do not spend enough time and effort on implementation. As a result of poor implementation, many viable strategies fail. Senior executives and consultants can get caught up in the excitement of a new strategy. The same devotion and enthusiasm should follow through to the execution phase.

Implementation is often an evolutionary process and can take significant time and management of resources. Since even the best-laid plans are not always realistic, flexibility must be maintained. A successful plan of action will also explore trade-offs and alternatives. Ample time should be spent identifying implementation risks and creating contingency plans. The timing and sequence of a strategic implementation depends on the degree of change being considered and the current state of the organization. It is often helpful to break out actions into long term and short term plans. There should always be periodic evaluations of the plan and if appropriate, modifications should be made.

The first part of this article will explore organizational alignment. An organization must move in concert to successfully reach its goals. Resources within the firm should be allocated in an optimal manner to achieve the strategic vision. We will use the 7-S Model as a tool to help build a blueprint of an aligned organization. The 7-S Model takes into account the organization as a whole. The resulting design will highlight areas that need to be changed in order to align the organization towards the common strategic goal.

Next, we will turn our attention to tactics for successfully implementing change. In many cases, strategic implementation will require significant changes in the organization. In general, most employees are wary of change and it can be a difficult time for many people in the organization. For a new strategy to be successfully executed, the leaders of the company must make sure they are conscious of all the issues and obstacles. Frameworks for instituting change can differ depending on the magnitude and timing of change. This article will introduce several approaches for managing change and address tactics for overcoming resistance.

Alignment

In the early 1980s, a team of consultants from McKinsey, as well as professors from Harvard Business School and Stanford Business School, created a model for effectively organizing a company. The framework is commonly referred to as the 7-S Model. The seven S's refer to Strategy, Structure, Systems, Staffing, Skills, Style and Shared Values. Managers should take into account all of these factors in order to effectively implement strategy.

All of the seven elements are interconnected. To be successful, there needs to be a high degree of fit between the variables. Any strategic effort should address all the elements. If one variable changes, the others will be impacted as well. Below is an illustration of the 7-S model. We will describe each concept in detail and then illustrate how the model can be applied to strategic implementation.

Strategy

Strategy refers to the way in which the firm creates a competitive advantage. The firm's strategy takes into account a firm's resources, competitors, customers and suppliers in order to determine an optimal position from which they can provide the greatest value. The firm may create this unique value through low-costs or differentiated product attributes.

Structure

Structure is the way in which different units of the company are divided and how authority is organized. It is vital that the company is able to constructively relate to the various parts of the organization. Firms can be structured in many different ways. The optimal structure will depend on a several factors, including the firm's strategy, its size, complexity of product and culture.

A significant challenge for organizational architecture is balancing the needs for specialization with coordination. Specialization helps a firm develop deep skills in a particular area, but when coordination is vital to firm's success more integration may be necessary. The way a firm is organized can send a very clear message about what the firm focuses on. Four common structures include functional, divisional, matrix and network.

1. Functional -- This is the simplest organizational structure. In this model, the firm is broken out into specific functions. Major areas of activity could include research and development (R&D), manufacturing, sales, marketing, finance and human resources (HR). Each of these functional areas may have a manager in charge of their particular unit, with all functional managers reporting to the president. This organizational structure works best for firms that are small and in a stable environment.

2. Divisional -- This organizational structure breaks the firms up into specialized divisions based on characteristics such as product lines, geography or market segment. Each division can be somewhat self-contained. Necessary functions such as R&D, Manufacturing, Sales, Marketing, Finance and HR might be duplicated in each division. A corporate function acts as the coordinating agent in this model and is responsible for setting the strategy/direction for the firm and allocating resources. This model is best suited for large firms with distinct product lines, geographical spheres or market segments. It may also be a good fit for entrepreneurial firms in fast moving environments. The weakness of this model is that integration between divisions is generally minimal. Any coordination between divisions can be costly and hard to execute. In addition, there can be additional expenses associated with duplicating functions in each division.
3. Matrix -- The matrix attempts to combine elements of both the functional and the divisional models. As opposed to the pyramid type structure that is inherent in the functional and divisional models, the matrix has two axes with an employee reporting to both a functional manager and a divisional manager. The benefit of this model is its ability to capture the strengths of both divisional and functional models. This model facilitates information sharing across divisions, while retaining the deep skills/knowledge from specialization. However, this model has been criticized as impractical. In some cases it can create confusion, lack of accountability and competing interests and loyalties.
4. Network -- This type of organization is very fluid. It can have several small, autonomous groups that join together temporarily or permanently to achieve a common goal. It can also involve groups from outside the company. Suppliers, customers or competitors can be the source of an alliance. The benefits of the structure lie in its flexibility and ability to gain access to resources and knowledge outside of the firm's normal activities. However, the absence of clear boundaries can lead to turmoil. There is also the possibility of being held up by a group outside the company.

Systems

The way a firm's procedures and processes are organized can help support the strategy. These activities can be both formal and informal. Some common systems include control practices, performance review processes, promotion/incentive systems, budgeting/resource allocation procedures, financial planning systems, distribution systems, and information systems. These systems help focus management and employee energy in a specific way. For example, if a company values cost saving initiatives, then they might put in place an incentive system for manufacturing workers who suggest ideas for reducing material waste. The way the systems in an organization are aligned governs almost every activity an employee is involved with.

Staffing

Human resources can be a competitive advantage for a firm. The approach the company takes to recruiting, selecting, developing and socializing their employees is vital to the success of the company. Having the right people on the job and managing their careers can build a fantastic knowledge base in the company that cannot be replicated. Personnel procedures should be carefully developed and continually monitored in order to assure that they are aligned with the vision of the company.

Skills

The strength of a company lies in the distinct competencies that the firm holds. These skills can go beyond the talents of individuals and can extend to technology, systems, management processes, innovation, or even customer service procedures. The skills of a company are usually identified as what the firm does best. In a case where significant change is needed to implement strategy, new skills might need to be learned.

Style

The style of a firm is embedded in the norms employees follow and how they work and interact with each other. The culture of a company is not usually explicitly spelled out. However, what the leaders and managers say and do is just as important as any formal procedure. You can watch and listen to get a sense of the firm's style. How is management's time focused? How do they make decisions? Is there a strict hierarchy that is followed? Formal styles can be suited for large, diverse companies, while some firms might have better success with participatory, informal styles. The style of a firm depends on many factors and can change over time. The style of an organization can also impact how well change is received.

Shared Values

This element is placed in the middle of the diagram because it pertains to the central beliefs of the firm. As with style, shared values are an unwritten set of ideas that guide the firm. These values are rooted in the mission of the company and influence managers and employees in everyday activities.

Applications

The 7-S model is a valuable tool that can be used to help implement a new strategy. This framework looks at multiple factors that can shape an organization. The 7-S's that were discussed previously can all have a significant impact on the success of strategic execution. Senior managers should take time to study the current state of each of the elements and then consider the ideal picture of what each element should look like. Based on this analysis, action plans can be developed to get the elements where they need to be.

When all the elements are consistent and reinforce each other, a strategy can truly take root. The 7-S model is a starting point from which tactics can be developed. We will next turn our attention to specific tips for dealing with the change that is likely to result from implementing a strategy.

Managing Change

Strategic implementation is often accompanied by significant change in the organization. The elements we discussed in the previous section may need to be revised and restructured in order to tightly align them with the new goals. With change often comes resistance. The next section will discuss successful strategies for implementing change and tactics for ovcoming resistance.

Strategies for Implementing Change

No matter what the leader's personal style is, he or she must evaluate situational factors and implications before choosing an implementation strategy. The optimal implementation strategy can vary depending on the amount of anticipated resistance, how much time is available, where the information lies and the degree of change. There are two extremes in implementation strategy. At one end of the spectrum is a directive approach. This strategy is commonly referred to as Bold Strokes. On the other end is a participative approach referred to as the Long March.

Bold Strokes -- This framework takes a rapid, top-down, directive approach. Market/environmental factors may require immediate action and the cost of waiting may be too significant. When the firm is in crisis, this is the optimal model. The Bold Strokes model attempts to quickly overcome resistance with little involvement from the others. This model is best suited for leaders who have a clear plan and all the relevant information. The leader must be trusted by the organization and have wide support with shareholders. The benefits of this model include quick results with less time for opposition to build. Enthusiasm for the change can be also maintained. However, since there is less involvement from others, the plan might not be as carefully thought out. Another drawback is that certain factions in the firm may feel alienated.

Long March -- The Long March refers to an approach that is gradual and iterative. Participation is the hallmark of this model. The goal is to minimize resistance. There is usually a low sense of urgency with more information needed to design and implement change. This framework is best suited for leaders that lack credibility, power, or trust. The major benefit of this model is consensus building, which is particularly helpful if change is initiated by an outsider. It can also provide a leader time to gather knowledge if unfamiliar with organization, products or customers. However, prolonged uncertainty can create long-term disruptions to operations. Slow results can also lead to indifference about the changes.

Resistance

Opposition can come in many forms. Diagnosing resistance is vital to overcoming it. In order to prepare for this potential conflict, managers should be aware of the reasons for resisting change. John Kotter and Leonard Schlesinger of Harvard Business School have studied the sources of resistance and developed some common tactics for overcoming resistance. We will first discuss four common reasons for resistance.

1. Self-Interest -- In this case, the person feels they will lose something of value if change is implemented. This kind of resistance can manifest itself in damaging power struggles.

2. Misunderstanding or Lack of Trust -- When there is little communication, an employee might jump to a worst case scenario. They may resist the change because they do not understand it or do not feel they are being told the whole truth about the implications of the change
3. Different Assessments of Problems -- People at different levels of the organization do not always have access to the same information. An employee might assess the situation very differently from the leaders and feel it is not in the best interest of the company.
4. Low Tolerance for Change -- Part of human nature is to fear the unknown. Some people embrace change, but the majority will have some degree of trepidation. There may be stress about developing new skills or fitting in with the new structure.

We will now turn our attention to discussing six tactics for overcoming resistance. These tactics will vary based on the speed of change, power of leader and degree of resistance.

1. Mandate -- When speed is essential and the leader possesses considerable power, a mandate may be the appropriate approach. It is quick, but can be risky if it leaves people dissatisfied with the leader. Include Resistors in Designing/Implementing Change -- When other tactics do not work or are too expensive, consider inviting resistors to help with the planning. This can be a relatively quick and inexpensive solution to resistance problems. However, there can be a backlash in the future if people feel manipulated.

2. Negotiation and Agreement -- When some group will clearly lose out in a change and when that group has considerable power, it may be appropriate to negotiate with that group. This can be a fairly easy way to avoid major resistance. The drawback to this approach is that it can be expensive if it alerts others to negotiate for compliance as well.
3. Facilitation and Support -- When resistance stems from adjustment problems and fear of change, it is best to take a supportive stance. This could include training, listening or giving time off. No other approach works as well with adjustment problems. However, it can be very time consuming and expensive, and can still fail.
4. Participation and Involvement -- When leaders do not have all the information they need to design the change and when others have considerable power to resist, participatory tactics are necessary. People who participate will be committed to implementing change and any relevant information they have can be integrated into the change plan. This biggest downside to this strategy is that it is very time consuming if participators design an inappropriate change.
5. Education and Communication -- When there is a lack of information or information/analysis is misunderstood, the organization should focus on communication. Once persuaded, people will often help with the implementation. However, educating and communicating require significant time and effort, particularly when many people are involved.

Change Implementation

Harvard Business School Professor John Kotter has come up with an eight-step program for successfully implementing change. This program takes into account alignment and resistance issues. We will discuss these steps in detail in the following section.

1. Establish a Sense of Urgency -- Communicate the importance of change and the dire state of affairs if no change is made. This "burning platform" can help provide motivation for change.

2. Form Powerful Guiding Coalitions -- Major change requires support from the key senior managers in order to mitigate opposition and resistance.
3. Create a Vision -- Create a picture of the future that is easily communicated to constituents both inside the firm (employees) and outside (customers, stockholders). This vision should clearly spell out the firm's new direction as well as the necessity of moving in that direction.
4. Communicate Vision -- Without credible communication, and a lot of it, the hearts and minds of the troops will never be captured. Communication can be imparted through what leaders say as well as what leaders do. Behavior of the top executives must be consistent with the written/spoken vision.
5. Remove Obstacles -- Align structure, reporting lines and systems with the new vision. In some cases, the obstacle might be a person or group of people. Treat these people fairly, but it is essential that a few resistant individuals not derail the process.
6. Plan for and Create Short-Term Wins -- If there is not immediate action, then there is the risk that you will lose momentum. Without short-term gains, too many people may give up, lose interest or join the ranks of the resistors.
7. Consolidate Improvements and Produce More Change -- Do not declare victory too soon, instead use successful short-term wins to build credibility and ensure that changes are lasting.
8. Institutionalize Changes into Organizational Structure -- Deliberately show people how the changes have helped improve performance. Ensure the next generation of mangers embodies the new approach.

Conclusion

Strategic implication is a complicated process. All elements of the firm should be analyzed to make sure there is a tight fit with the vision. The leaders of the organization must decide how scarce resources such as capital, operating expenses and people will be allocated to support strategic goals. Analysts can play a major role in making these decisions. Analysis can help highlight which areas need to be changed, but there still may be conflict. Therefore, leaders must also utilize tactics for overcoming resistance.

Robert Kaplan of Harvard Business School and David Norton have developed a yardstick to help measure the success of strategic implementations. They have called their framework the Balanced Score Card. It tracks both financial and operational metrics. The four areas it focuses on are 1) Customer Perspective, 2) Internal Business Perspective, 3) Innovation/Learning, and 4) Shareholder Perspective (Financial Measurements). By measuring the impact of change, it can help provide credibility for future endeavors.

Terms & Concepts

7-S Model: A model for effectively organizing a company that looks at the fit between seven key elements. The seven elements are Strategy, Structure, Systems, Staffing, Skills, Style and Shared Values.

Alignment: The process of adjusting elements of the business so that they are in proper position relative to one another.

Bold Strokes: An approach to implementation that is rapid and directive.

Implementation: The act of executing on a strategic plan.

Long March: An approach to implementation that is gradual and participatory.

Resistance: Behavior intended to protect an individual from the effects of change.

Resource Allocation: The process and decision of allocating scarce resources to a specific project or business unit.

Shared Values: Set of widely shared, core principles that guide the firm. An element in the 7-S model.

Skills: Distinct competencies in an organization. An element in the 7-S model.

Staffing: The firm's approach to recruiting, selection, socializing and development of its employees. An element in the 7-S model.

Strategy: The ways in which competitive advantage can be achieved. An element in the 7-S model.

Structure: The way in which tasks and people are specialized and divided. Organizational structures can include functional, divisional, matrix and network. An element in the 7-S model.

Style: Overall operating style of the firm and leadership of top management. An element in the 7-S model.

Systems: Processes and procedures for operating a business. An element in the 7-S model.

Bibliography

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Strategic Implementation

On this Page

Subject Terms

Strategic Implementation

Alignment

Strategy

Structure

Systems

Staffing

Skills

Style

Shared Values

Applications

Managing Change

Strategies for Implementing Change

Resistance

Change Implementation

Conclusion

Terms & Concepts

Bibliography

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