3 - Strategy execution

Summary

Learning points

1.  Discuss how strategy happens

2.  See strategy as managing a portfolio of projects

3.  Strategy formed through a pattern of decisions and actions

4.  Link strategy formation to corporate entrepreneurship

5.  Form the background for an integrative model

Once the future strategic path has been staked out in the strategy formulation process, the next logical step in a rational analytical approach to strategy making is to ensure that the necessary actions are carried out to make the intended strategic aims come true. In accordance with this prescriptive view of strategy making, top management drives the strategic thinking process and forms the overarching plans for the necessary actions to be taken. Then the organization's line and middle managers step in to ensure that the stipulated actions are executed in accordance with the strategic plan. By strategy execution we typically mean successful implementation to accomplish the strategic plan. So, if the strategy fails, it is often ascribed to poor implementation, thus implying that the underlying strategy signed off by the board was alright – top management was just not able to make things happen and ensure that the intended aims came true. Hence, successful implementation may hinge upon the acceptance of middle management because when managers find their self-interest compromised, they may delay, obstruct, or even sabotage implementation. In addition to assessing the potential obstacles and aligning resources and reward structures, it is often considered important to “sell” the strategy to organizational members. Hence, the strategy textbooks frequently argue that communication is essential for effective execution of the strategy to gain support and clarify to managers throughout the organization what it is they are supposed to do. Similarly, an underlying tenet in much of the change management literature is to prevent employee resistance and achieve buy-in, commitment, and consensus around planned actions. This reflects a view that as long as top management clearly explains the intended strategy and aligns people in the organization accordingly, then things are supposed to happen as planned.