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Introduction

According to General Robert E. Wood Business is like a war in one respect, if its ground
strategy is correct, any number of tactical errors can be made and yet the enterprise proves
successful. (Hannagan, T.,1998).Wood compares strategy to war and also indicates its origin
from the Greek. The Greek word strategos meant military leader. Many refer to strategy in
terms of either military, games (chess) or team related (football) context. Woods also underlines
the neccessity and the reason of a strategy in any organization.Strategic management is
the comprehensive collection of ongoing activities and processes that organizations use to
systematically coordinate and align resources and actions with mission, vision and strategy
throughout an organization. Strategic management activities transform the static plan into
a system that provides strategic performance feedback to decision making and enables the plan to
evolve and grow as requirements and other circumstances change. Strategy Execution is
basically synonymous with Strategy Management and amounts to the systematic implementation
of a strategy.

Strategic Planning &Management


There are many different frameworks and methodologies for strategic planning and
management. While there is no absolute rules regarding the right framework, most follow a
similar pattern and have common attributes. Many frameworks cycle through some variation
on some very basic phases:
1) analysis or assessment, where an understanding of the current internal and external
environments is developed,
2) strategy formulation, where high level strategy is developed and a basic organization level
strategic plan is documented
3) strategy execution, where the high level plan is translated into more operational planning and
action items, and
4) evaluation or sustainment / management phase, where ongoing refinement and evaluation of
performance, culture, communications, data reporting, and other strategic management issues
occurs.
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Vision
Vision is a statement that expresses organizations ultimate objectives. It is very important for
any organization to have clear and attainable long-term vision; the statement that guides every
chief executive, manager or employee in achieving the same organizational objective. A vision
statement asks What does our business want to become? and usually is a one sentence,
inspirational, clear and memorable statement that expresses companys desired long-term
position. It motivates employees to make extra effort and usually results in higher performance.
Because money rewards only partly motivates employees, it is important to use other tools such
as vision statement to increase their motivation. The statement also indicates what resources,
competencies and skills will be needed to achieve the future objective. This way it guides
decision-making and resource allocation more effectively.

Mission
Mission statement is a description of what an organization actually does what its business is
and why it does it. (Rothaermel, F. T., 2012). Often called the credo, philosophy, core
values or our aspirations, organizations mission is the statement that defines its core purpose
or reason for being (David, F.R., 2009). It tells who a company is and what it does. According to
P. Drucker, often called the father of modern management, a mission is the primary guidance in
creating plans, strategies or making daily decisions. It is an important communication tool that
conveys information about organizations products, services, targeted customers, geographic
markets, philosophies, values and plans for future growth to all of its stakeholders. In other
words, every major reason why company exists must be reflected in its mission, so any
employee, supplier, customer or community would understand the driving force behind
organizations operations.
There are two types of statements (Rothaermel, F. T., 2012).

Figure 1: types of Mission

Customer-oriented missions
Customer-oriented missions define organizations purpose in terms of meeting customer needs or
providing solutions for them. They provide more flexibility than product-oriented missions and
can be easily adapted to changing environment. For example, Nokias statement connecting
people is customer-oriented. It does not focus on mobile phones or smartphones only. It
provides a solution to customer needs and could easily have worked 50 years ago, and will
continue to work in the future. It also gives more strategic flexibility for the company. In Nokias
case, it may start providing VoIP software to allow calls to be made over the internet and its
mission would still be valid.

Product-oriented missions
Product-oriented missions focus on what products or services to serve rather than what solutions
to provide for customers. These statements provide less flexibility for the company because most
products have short life cycle and offer limited market expansion. The company that defines its
business as providing best health insurance products may struggle to grow to other insurance
product categories.

Strategic objective
A broadly defined objective that an organization must achieve to make its strategy succeed.
Strategic objectives are, in general, externally focused and (according to the management guru
Peter Drucker) fall into eight major classifications:
Market standing: desired share of the present and new markets;
Innovation: development of new goods and services, and of skills and methodsrequired to

supply them;
Human resources: selection and development of employees;
Financial resources: identification of the sources of capital and their use;
Physical resources: equipment and facilities and their use;
Productivity: efficient use of the resources relative to the output;
Social responsibility: awareness and responsiveness to the effects on the wider

community of the stakeholders;


Profitrequirements: achievement of measurable financial well-being and growth.

Competitive advantage
Competitive advantage means superior performance relative to other competitors in the same
industry or superior performance relative to the industry average. Itcan mean anything that an
organization does better compared to its competitors.
There is no one answer about what is competitive advantage or one way to measure it, and for
the right reason. Nearly everything can be considered as competitive edge, e.g. higher profit
margin, greater return on assets, valuable resource such as brand reputation or unique
competence in producing jet engines. Every company must have at least one advantage to
successfully compete in the market. If a company cant identify one or just doesnt possess it,
competitors soon outperform it and force to leave the market.
There are many ways to achieve the advantage but only two basic types of it: cost or
differentiation advantage. A company that is able to achieve superiority in cost or differentiation
is able to offer consumers products at lower costs or with higher degree of differentiation and
most importantly, is able to compete with its rivals.
The following diagram illustrates the basic competitive advantage model, which is explained
below

Figure 2: Competitive Strategy

How a company can achieve it?


An organization can achieve an edge over its competitors in the following two ways:
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Through external changes. When PEST factors change, many opportunities can appear
that, if seized upon, could provide many benefits for an organization. A company can also
gain an upper hand over its competitors when its capable to respond to external changes
faster than other organizations.
By developing them inside the company. A firm can achieve cost or differentiation
advantage when it develops VRIO resources, unique competences or through innovative
processes and products.

External Changes
Changes in PEST factors.PEST stands for political, economic, socio-cultural and technological
factors that affect firms external environment. When these factors change many opportunities
arise that can be exploited by an organization to achieve superiority over its rivals. For example,
new superior machinery, which is manufactured and sold only in South Korea, would result in
lower production costs for Korean companies and they would gain cost advantage against
competitors in a global environment. Changes in consumer demand, such as trend for eating
more healthy food, can be used to gain at least temporary differentiation advantage if a company
would opt to sell mainly healthy food products while competitors wouldnt. For example,
Subway and KFC.
If opportunities appear due to changes in external environment why not all companies are able to
profit from that? Its simple, companies have different resources, competences and capabilities
and are differently affected by industry or macro environment changes.
Companys ability to respond fast to changes. The advantage can also be gained when a
company is the first one to exploit the external change. Otherwise, if a company is slow to
respond to changes it may never benefit from the arising opportunities.

Internal Environment
VRIO resources. A company that possesses VRIO (valuable, rare, hard to imitate and organized)
resources has an edge over its competitors due to superiority of such resources. If one company
has gained VRIO resource, no other company can acquire it (at least temporarily). The following
resources have VRIO attributes:
Intellectual property (patents, copyrights, trademarks)
Brand equity
Culture
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Know-how
Reputation

Two basic types of Competitive Advantages


M. Porter has identified 2 basic types of competitive advantage: cost and differentiation
advantage.

Figure 3: Basic types of Competitive Advantages

Cost advantage.
Porter argued that a company could achieve superior performance by producing similar quality
products or services but at lower costs. In this case, company sells products at the same price as
competitors but reaps higher profit margins because of lower production costs. The company that
tries to achieve cost advantage is pursuing cost leadership strategy. Higher profit margins lead to
further price reductions, more investments in process innovation and ultimately greater value for
customers.

Differentiation advantage
Differentiation advantage is achieved by offering unique products and services and charging
premium price for that. Differentiation strategy is used in this situation and company positions
itself more on branding, advertising, design, quality and new product development rather than
efficiency, outsourcing or process innovation. Customers are willing to pay higher price only for
unique features and the best quality.

Strategic Management & Strategic Planning Process


Strategic management process is a method by which managers conceive of and implement a
strategy that can lead to a sustainable competitive advantage (Rothaermel, F. T., 2012).It is a
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process by which an organization establishes its objectives, formulates actions (strategies)


designed to meet these objectives in the desired timescale, implements the actions, and assesses
progress and results. (Thompson, J. and Martin, F., 2010).Strategic planning process is a
systematic or emerged way of performing strategic planning in the organization through initial
assessment, thorough analysis, strategy formulation, its implementation and evaluation.
The process of strategic management lists what steps the managers should take to create a
complete strategy and how to implement that strategy successfully in the company. It might
comprise from 7 to nearly 30 steps (David, F.R., 2009) and tends to be more formal in wellestablished organizations.
The ways that strategies are created and realized differ. Thus, there are many different models of
the process. The models vary between companies depending upon:
Organizations culture.
Leadership style.
The experience the firm has in creating successful strategies.

Components of strategic planning process


There are many components of the process which are spread throughout strategic planning
stages. Most often, the strategic planning process has 4 common phases: strategic analysis,
strategy formulation, implementation and monitoring. For clearer understanding, this article
represents 5 stages of strategic planning process:
Initial Assessment
Situation Analysis
Strategy Formulation
Strategy Implementation
Strategy Monitoring

Initial Assessment
The starting point of the process is initial assessment of the firm. At this phase managers must
clearly identify the companys vision and mission.
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Vision answers the question: What does an organization want to become? Without visualizing
the companys future, managers wouldnt know where they want to go and what they have to
achieve. Vision is the ultimate goal for the firm and the direction for its employees.
In addition, mission describes companys business. It informs organizations stakeholders about
the products, customers, markets, values, concern for public image and employees of the
organization (David, p. 93). Thorough mission statement acts as guidance for managers in
making appropriate (Rothaermel, p. 34) daily decisions.

Situation Analysis
When the company identifies its vision and mission it must assess its current situation in the
market. This includes evaluating an organizations external and internal environments and
analyzing its competitors.
During external environment analysis managers look into the key external forces: macro &
micro environments and competition. PEST or PESTEL frameworks represent all the macro
environment factors that influence the organization in the global environment. Micro
environment affects the company in its industry. It is analyzed using Porters 5 Forces
Framework.
Competition is another uncontrollable external force that influences the company. A good
example of this was when Apple released its IPod and shook the mp3 players industry, including
its leading performer Sony. Firms assess their competitors using competitors profile matrix and
benchmarking to evaluate their strengths, weaknesses and level of performance.
Internal analysis includes the assessment of the companys resources, core competencies and
activities. An organization holds both tangible resources: capital, land, equipment, and intangible
resources: culture, brand equity, knowledge, patents, copyrights and trademarks (Rothaermel, p
90). A firms core competencies may be superior skills in customer relationship or efficient
supply chain management. When analyzing the companys activities managers look into the
value chain and the whole production process.
As a result, situation analysis identifies strengths, weaknesses, opportunities and threats for the
organization and reveals a clear picture of companys situation in the market.

Strategy Formulation
Successful situation analysis is followed by creation of long-term objectives. Long-term
objectives indicate goals that could improve the companys competitive position in the long run.
They act as directions for specific strategy selection. In an organization, strategies are chosen at 3
different levels:

Business level strategy


This type of strategy is used when strategic business units (SBU), divisions or small and medium
enterprises select strategies for only one product that is sold in only one market. The example of
business level strategy is well illustrated by Royal Enfield firms. They sell their Bullet
motorcycle (one product) in United Kingdom and India (different markets) but focus on different
market segments and sell at very different prices (different strategies). Firms may select between
Porters 3 generic strategies: cost leadership, differentiation and focus strategies. Alternatively
strategies from Bowmans strategy clock may be chosen (Johnson, Scholes, & Whittington, p.
224).

Corporate level strategy


At this level, executives at top parent companies choose which products to sell, which market to
enter and whether to acquire a competitor or merge with it. They select between integration,
intensive, diversification and defensive strategies.

Global/International strategy
The main questions to answer: Which new markets to develop and how to enter them? How far
to diversify? (Thompson and Martin, p. 557, Johnson, Scholes, & Whittington, p. 294)

Strategy Implementation
Even the best strategic plans must be implemented and only well executed strategies create
competitive advantage for a company.
At this stage managerial skills are more important than using analysis. Communication in
strategy implementation is essential as new strategies must get support all over organization for

effective implementation. The example of the strategy implementation that is used here is taken
from Davids book, chapter 7 on implementation. It consists of following 6 steps:

Setting annual objectives;


Revising policies to meet the objectives;
Allocating resources to strategically important areas;
Changing organizational structure to meet new strategy;
Managing resistance to change;
Introducing new reward system for performance results if needed.

The first point in strategy implementation is setting annual objectives for the companys
functional areas. These smaller objectives are specifically designed to achieve financial,
marketing, operations, human resources and other functional goals. To meet these goals
managers revise existing policies and introduce new ones which act as the directions for
successful objectives implementation.
The other very important part of strategy implementation is changing an organizational chart.
For example, a product diversification strategy may require new SBU to be incorporated into the
existing organizational chart. Or market development strategy may require an additional division
to be added to the company. Every new strategy changes the organizational structure and requires
reallocation of resources. It also redistributes responsibilities and powers between managers.
Managers may be moved from one functional area to another or asked to manage a new team.
This creates resistance to change, which has to be managed in an appropriate way or it could
ruin excellent strategy implementation.

Strategy Monitoring
Implementation must be monitored to be successful. Due to constantly changing external and
internal conditions managers must continuously review both environments as new strengths,
weaknesses, opportunities and threats may arise. If new circumstances affect the company,
managers must take corrective actions as soon as possible.Usually, tactics rather than strategies
are changed to meet the new conditions, unless firms are faced with such severe external changes
as the 2007 credit crunch.Measuring performance is another important activity in strategy
monitoring. Performance has to be measurable and comparable. Managers have to compare their
actual results with estimated results and see if they are successful in achieving their objectives. If
objectives are not met managers should:

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PEST & PESTEL Analysis


PEST analysis an analysis of the political, economic, social and technological factors in the
external environment of an organization, which can affect its activities and performance.
PESTEL model involves the collection and portrayal of information about external factors
which have, or may have, an impact on business.
PEST or PESTEL analysis is a simple and effective tool used in situation analysis to identify the
key external (macro environment level) forces that might affect an organization. These forces can
create both opportunities and threats for an organization. Therefore, the aim of doing PEST is to:
find out the current external factors affecting an organization;
identify the external factors that may change in the future;
to exploit the changes (opportunities) or defend against them (threats) better than
competitors would do.
Macro environment forces affecting a firm (PEST forces including legal, environmental, ethical
and demographic forces)

Figure 4: Macro Environment

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PEST analysis template


Political

Economic

Government stability and likely changes


Bureaucracy
Corruption level
Tax policy (rates and incentives)
Freedom of press
Regulation/de-regulation
Trade control
Import restrictions (quality and quantity)
Tariffs
Competition regulation
Government involvement in trade unions and agreements
Environmental Law
Education Law
Anti-trust law
Discrimination law
Copyright, patents / Intellectual property law
Consumer protection and e-commerce
Employment law
Health and safety law
Data protection law
Laws regulating environment pollution

Socio-cultural

Growth rates
Inflation rate
Interest rates
Exchange rates
Unemployment trends
Labor costs
Stage of business cycle
Credit availability
Trade flows and patterns
Level of consumers disposable income
Monetary policies
Fiscal policies
Price fluctuations
Stock market trends
Weather
Climate change

Technological

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Health consciousness

Education level

Attitudes toward imported goods and services

Attitudes toward work, leisure, career and retirement

Attitudes toward product quality and customer service

Attitudes toward saving and investing

Emphasis on safety

Lifestyles

Basic infrastructure level

Rate of technological change

Spending on research & development

Technology incentives

Legislation regarding technology

Technology level in your industry

Communication infrastructure

Access to newest technology

Internet infrastructure and penetration

Buying habits

Religion and beliefs

Attitudes toward green or ecological products

Attitudes toward and support for renewable energy

Population growth rate

Immigration and emigration rates

Age distribution and life expectancy rates

Sex distribution

Average disposable income level

Social classes

Family size and structure

Minorities

Table 1: PEST analysis template

SWOT analysis
An analysis of an organizations strengths and weaknesses alongside the opportunities and
threats present in the external environment. Swot analysis involves the collection and portrayal
of information about internal and external factors which have, or may have, an impact on
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business.It is a framework that allows managers to synthesize insights obtained from an internal
analysis of the companys strengths and weaknesses with those from an analysis of external
opportunities and threats.
Strengths
Weaknesses
Opportunitie

factors that give an edge for the company over its competitors.
factors that can be harmful if used against the firm by its competitors.
favorable situations which can bring a competitive advantage.

s
Threats

unfavorable situations which can negatively affect the business.

Strengths and weaknesses are internal to the company and can be directly managed by it, while
the opportunities and threats are external and the company can only anticipate and react to them.
Often, swot is presented in a form of a matrix as in the illustration below:

Figure 5: SWOT Analysis

Swot is widely accepted tool due to its simplicity and value of focusing on the key issues which
affect the firm. The aim of swot is to identify the strengths and weaknesses that are relevant in
meeting opportunities and threats in particular situation. (Johnson, G, Scholes, K. Whittington,
R., 2008).
This is a basic example of the SWOT analysis:

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SWOT analysis
Strengths

Weaknesses

1. Second most valuable brand in the


world valued at $76 billion
2. Diversified income (5 different
brands earning more than $4
billion each)
3. Strong patents portfolio (15,000
patents)

1. Investments in R&D are below the


industry average
2. Very low or zero profit margins
3. Poor customer services
4. High employee turnover

4. Investments in R&D reaching 4


billion a year.
5. Competent in mergers &
acquisitions
6. Have an access to cheap cash
reserves
7. Effective corporate social
responsibility (CSR) projects
8. Localized products
9. Highly skilled workforce

5. High cost structure


6. Weak brand portfolio
7. Rigid (bureaucratic) organizational
culture impeding fast introduction
of new products
8. High debt level ($3 billion)
9. Brand dilution (the firm has too
many brands)
10. Poor presence in the world's largest
markets

10. Economies of scale or economies


of scope
Opportunities

Threats

1. Market growth for the main firm's


product

1. Corporate tax may increase from


20% to 22% in 2013

2. Growing demand for renewable


energy

2. Rising pay levels


3. Rising raw material prices

3. New technology, that would drive


production costs by 20% is in
development

4. Intense competition

4. Our country accession to EU

5. Market is expected to grow by only


1% next year indicating market
saturation

5. Changing customer habits


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6. Disposable income level will


increase
7. Government's incentives for
'specific' industry
8. Economy is expected to grow by
4% next year
9. Growing number of people buying
online

6. Increasing fuel prices


7. Aging population
8. Stricter laws regulating
environment pollution
9. Lawsuits against the company
10. Currency fluctuations

10. Interest rates falling to 1%

Table 2: Example of SWOT Analysis

Action Plan (Converting Your Strategy into Action)


An action plan integrates all of the strategies you have developed throughout your business plan
into a highly organized and prioritised plan of action designed to achieve your stated business
mission and goals. This is achieved by breaking down the strategies you developed into small,
achievable steps and then identifying the actions you need to take for each step. It can be used as
a short term (6-12 months) action plan to achieve short term business goals, a medium term
action plan (2-3 years) or a long term action plan (3-5 years).An action plan identifies the
business goal (what you would like to achieve) and the strategies that can be implemented to
reach that goal.It also explains the specific actions that need to take place in order to achieve the
business strategy. This will include the timeframe, roles and responsibilities, performance
indicators and alternative methods that can be implemented to reach the business objectives.

Developing an Action Plan


Generally action plans are limited to a small and manageable number of goals. This helps to keep
the plan realistic and achievable.
For each action you should identify:
The timeframe and priorities for each action.
The people who will be responsible for undertaking each action.
Specific performance indicators to help you determine in the future whether your
business has succeeded in achieving the business goal.
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Once you have these details identified, you can progress to formulating a series of strategies to
be undertaken to achieve the goals of each action item. It often helps to break the various
strategies tasks down into simple and specific steps to keep the plan on track and avoid getting
overwhelmed or losing control.An important step is being able to evaluate within a set period of
time if the action plan has been a success. Failing to do so could result in a plan that continues on
indefinitely without ever actually achieving anything positive for the business.To evaluate your
action plan, go back to the initial objectives you set out and decide if they have worked, not
worked or are in the process of being achieved. Be critical of each objectives success or failure in
this stage. If your original targets were too optimistic, then you need to admit this so that you
will be able to move on.Sometimes it may become apparent that an action plan has failed to meet
its objectives. Therefore, you may need to reassess and redefine your original objectives and
strategies to improve their success or abandon the plan and start again at the beginning rather
than waste resources on a plan that isn't working.

Reviewing KPIs
An important final step of the marketing process is to review and make improvements to your
plan. To help you achieve this you can develop and monitor a set of measures to see how well
your marketing strategy is working against the objectives you have set. These measures are
commonly called Key Performance Indicators (KPI's).
When setting your objectives and KPI's, it is important to ensure they are practical. To help you
do this you can use what is called the "SMART" test. The Smart test ensures that your goals and
KPI's are;
S - Specific
M - Measurable
A - Achievable
R - Realistic
T - Time bound

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After your marketing strategy has been in place for a reasonable length of time, it is necessary to
review its success and identify areas that need to be improved. Over time, changes to your
business can occur and you will need to reassess your marketing strategy accordingly.
The success of the marketing campaign can be measured by comparing its performance in the
marketplace against what was originally laid out by the marketing goals. These goals are the key
indicators for determining the level of performance your campaign has achieved.
If the marketing has met expectations and still fits within the SMART guidelines, you may not
need to alter the objectives at all. However, if the objectives are not being met, you will need to
either change the objectives to make them more realistic and achievable, or implement changes
that will make the marketing more effective.

Monitoring Performance
Regularly monitoring your marketing campaign is important for it to succeed. You will need to
assess and analyse its performance to ensure that it remains effective. This will allow you to have
better control over the performance of your marketing strategy.One method you can implement
to monitor the performance of your marketing plan is a marketing audit. A marketing audit is a
comprehensive examination of your objectives and strategies to determine problem areas and
opportunities for improvement.A marketing audit uses a systematic approach to cover all areas of
marketing in a business and does not simply focus on the problem areas. It is an independent
review of the direction that your campaign has taken and its outcomes, compared to what was
originally laid out by your marketing objectives. They are generally performed by experienced
people who are not directly involved in your marketing department.
In order to be a useful tool, a marketing audit should be conducted on a predetermined periodic
basis. This is to provide regular updates and give you opportunities to improve the effectiveness
of your marketing strategy.
You may also choose to conduct internal reviews and monitoring of the performance of your
marketing. These can be conducted as frequently as you need, or even run continuously to
provide a regular summary of success. By conducting analysis of your original goals with the
actual results of your marketing you can set yourself benchmarks to improve upon.

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You can implement strategies such as surveying customers to find out if the marketing campaign
has had any influence on them as well as looking specifically at your sales records. You can then
determine if there were new customers or more sales after the implementation of a new
marketing scheme. You can then gauge if the time and costs associated with the campaign have
been effective or if changes need to be made.

Strategy Execution
What is strategy execution? Strategy execution is a hot topic in management today. In fact, the
Conference Boards recent Survey of CEOs revealed that chief executives are so concerned
about strategy execution that they rated it as both their number one and number two most
challenging issue. For anyone whos tried to execute strategy, this finding should come as no
surprise: its estimated that more than 60% of strategies are not successfully implemented.
When asked to define strategy execution, most managers respond with statements like, Its the
successful implementation of a strategic plan or Its getting your strategy done. While these
perspectives are certainly valid, they arent very helpful in terms of understanding what needs to
be done to actually drive business results.

Heres a look at some mainstream approaches to strategy execution:

Strategy execution as a process


The most notable book to date on strategy execution is Execution: The Discipline of Getting
Things Done, by Larry Bossidy and Ram Charan. Bossidy, a retired CEO, and Charan, a
renowned management consultant, make the case for execution as a discipline or systematic
way of exposing reality and acting on it. They explain that the heart of execution lies in three
core processes"
People
Strategy
Operations
They explain the processes and descriptions managers use to successfully drive business results.

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Strategy execution as a system


The information presented in Execution is certainly useful, but the authors dont fully explain
how an organization can implement their three core processes to achieve strategy success. There
have been significant advancements in this area since Execution was published in 2002. In 2008,
Harvard Business School Professor Robert S. Kaplan and his Palladium Group colleague David
P. Norton wrote The Execution Premium: Linking Strategy to Operations for Competitive
Advantage. In it they present their management system, which houses six sequential stages
intended to help organizations capture what they call an execution premiuma measurable
increase in value derived from successful strategy execution. They outline six stages in this
system:

1. Develop the strategy


2. Plan the strategy
3. Align the organization
4. Plan operations
5. Monitor and learn
6. Test and adapt
Through detailed subactivities26 in total Kaplan and Norton explain how organizations have
successfully executed strategy via application of their management system.

Strategy execution as a step-by-step process.


Both of the models outlined above are important and anyone serious about the practice of
strategy execution should be familiar with them, but they suffer from what might be called the
Goldilocks Problem. The process view doesnt contain enough detail to help managers
construct the three processes within an organization (i.e., too cold). Conversely, the systems
view contains so many sub steps that it can be overwhelming to managers (i.e., too hot).
So, how can we find a solution that is just right"? While there is no easy answer, the best of
both approaches can be synthesized into 10 steps outlined below. These steps provide both high
level direction as well as the detail necessary to capture the lions share of strategy execution
success.

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Step 1: Visualize the strategy


One of the most pressing challenges in all of strategy is simply understanding what a strategy is.
An effective way to improve this understanding is to visualize the strategy via an illustration that
shows both the important elements of the strategy and how each relates to one another.
Frameworks such as the Strategy Map by Kaplan and Norton, the Activity Map by Michael
Porter, or the Success Map by Andy Neely help in this regard.

Step 2: Measure the strategy


Key elements of the visualized strategy should be assigned an easily understood performance
measure. The full set of strategic performance measures can be organized into a dashboard, a
Balanced Scorecard, or some other framework so the reader can determine that progress is being
made toward completion of the strategy.
Step 3: Report progress
In the same way that a budget is reviewed monthly to ensure financial commitments are being
kept, the strategy should be reviewed regularly, but with more of an eye toward determining if
the strategy is producing results, versus controlling performance.
Step 4: Make decisions
Strategy execution is much like sailing a boat toward a planned destination. A defined course
and a full complement of navigational charts will never eliminate the need to remain vigilant, to
assess the environment, and to make corrections as conditions change. As part of the regular
reporting process leaders must make ongoing strategic decisions to keep the strategy current and
on course.
Step 5: Identify strategy projects
Organizations may have scores, if not hundreds, of projects ongoing at any point, but they rarely
have a firm grasp on the type and range of these projects. The first step in improving projectoriented strategy execution is to capture and organize all projectsstrategy projects in particular
that are underway in throughout an organization.
Step 6: Align strategy projects
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Once projects are captured they must then be aligned to the strategies or goals for the
organization. This step entails comparing each project, either proposed or ongoing, to the
strategic goals to determine if alignment exists. Only those projects that directly impact the
strategy should be resourced and continued.
Step 7: Manage projects
Organizations must develop a capability in project management if they are to execute strategy
effectively. In some settings, projects receive very little management. In others, projects persist
well beyond their scheduled completion. The full complement of projects in any organization
should be coordinated and controlled by a central project office or officer with the responsibility
for monitoring both progress and performance.
Step 8: Communicate strategy
It is difficult to execute strategy when the strategy itself isnt well understood, or performance
relative to it is not communicated. Leaders must communicate their visualized strategy to the
workforce in a way that will help them understand not only what needs to be done, but why.
Step 9: Align individual roles
Employees want to know they are making a meaningful contribution to their organizations
success. Its up to senior leaders to ensure that employees at all levels can articulate and evaluate
their personal roles toward achievement of specific strategic goals. This is perhaps one of the
most critical aspects of the execution process.
Step 10: Reward performance
In strategy execution, as in any other area of management, what gets measured gets done.
Taking this one step further, what get measured and rewarded gets done faster. After explaining
the strategy and aligning the workforce to it, senior managers institute the incentives that drive
behaviors consistent with the strategy.
Strategy execution is difficult in practice for many reasons, but a key impediment to success is
that many leaders dont know what is strategy execution or how they should approach it. Homegrown approaches may be incomplete if they fail to incorporate many of the basic activities
highlighted above.
While the 10-step approach outlined here wont guarantee strategy execution success, it will
greatly improve the odds, perhaps pushing the topic down a notch on the list of CEO concerns.

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