Tuesday, 3 December 2013

Building An Organization Capable Of Good Strategy Execution

"Of all the things I've done,the most vital is coordinating the talents of those who work for us and pointing them toward a certain goal". -Walt Disney-Founder of the Disney Company

The 10 basic tasks of the strategy execution process:

  1. Staff the organization with managers and employees capable of executing the strategy well.
  2. Build the organizational capabilities required for successful strategy execution.
  3. Create a strategy-supportive organizational structure.
  4. Allocate sufficient resources(budgetary and otherwise)to the strategy execution effort.
  5. Institute policies and procedures that facilitate strategy execution.
  6. Adopt best practices and business processes that drive continuous improvement in strategy execution activities.
  7. Install information and operating systems that enable company personnel to carry out their strategic roles proficiently.
  8. Tie rewards and incentives directly to the achievement of strategic and financial targets.
  9. Instill a corporate culture that promotes good strategy execution.
  10. Exercise the internal leadership needed to propel strategy implementation forward.

How well managers perform these 10 tasks has a decisive impact on whether the outcome of the strategy execution effort is a spectacular success,a colossal failure,or something in between.

When strategies fail,it is often because of poor execution.Strategy execution is therefore a critical managerial endeavor.The two best signs of good strategy execution are whether a company is meeting or beating its performance targets and whether they are performing value chain activities in a manner that is conducive to company wide operating excellence.

Structuring the organization and organizing the work effort in a strategy-supportive fashion has four aspects:

  • Deciding which value chain activities to perform internally and which ones to outsource
  • Aligning the firm's organizational structure with its strategy
  • Deciding how much authority to centralize at the top and how much to delegate to down-the-line managers and employees
  • Facilitating the necessary collaboration and coordination with external partners and strategic allies.

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