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EIGHT LEVERS OF STRATEGY IMPLEMENTATION

Vikas A. Adlakha Anand Shah Malik M. Samnani Akhilesh Tripathi Abhijit J. Udani Krunal C. Sanghvi

C-015 C-033 C-044 C-047 C-048 C-055

FLOW OF PRESENTATION

Strategy Implementation F-I-P Cycle Implementation: A Gap Why 8 Levers?

Structural Levers
Managerial Levers Levers Use at Different Stages Conclusion
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STRATEGY IMPLEMENTATION

Strategy Implementation is the translation of chosen strategy into organizational action so as to achieve strategic goals and objectives. Broader aspect of Strategy Implementation is all about Developing and Utilizing its important parameters viz;

Organization Structure Control Systems Culture

Strategy Formulation

Strategy Implementation

Performance

F-I-P CYCLE
Performance Strategy implementation shapes the next round of strategy formulation.

Implementation

Formulation

Poor Performance Poor Formulation Good Implementation Poor Performance Good Formulation Poor Implementation
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IMPLEMENTATION A GAP

Research of Management Strategists: Mankins & Steele (2005)

Companies realize only 63% of performance promised by their strategies. Poor implementation is to the fact that 95% of employees do not understand companys strategy.

Kaplan & Norton (2005)

Johnson (2004)

66% of the corporate strategy is never implemented.


Top-down or Laissez-Fair Senior Management Style Unclear Strategy and conflicting priorities. An Ineffective senior management team. Poor vertical communication. Poor coordination across functions, businesses or borders. Inadequate down-the-line leadership skills and development

Beer & Eisenstat (2000) Six Silent Killers


STRUCTURAL LEVERS
Who, what and when of cross functional integration Actions

Installing strategic support systems Policies

Programs

Establishing Strategy Supportive policies

Systems

Installing organizational learning and continuous improvement practices

ACTIONS
FOSTERING CROSS FUNCTIONAL INTEGRATION AND COMPANY COLLABORATION.

Input and Collaboration of all the members at all the levels of strategy

Eg: Lack of support from pilots was one of the roadblocks to the cost cutting strategy of AI

Cross Functional Integration

Integration between the all the activities of the value chain Eg: At ICICI bank aggressive sales pitch is backed by streamlined operations.

PROGRAMS

Organizational learning & continuous improvement must incorporate innovation into the implementation lever

Creation of Innovation Chain to include global partners in the innovation effort


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POLICIES
Institutionalizes
strategy-supportive practices & operating procedures thereby pushing daily activities in the direction of efficient strategy execution

limits

independent action and discretionary decisions and behavior. Policy communicates what is expected, guides strategy-related activities, and restricts unwanted variations

aligns

actions & behaviors with strategy, thereby minimizing divergent decisions and conflict

shape

character of work environment and translates corporate philosophy into how things are done, how people are treated, and what corporate beliefs and attitudes mean in everyday terms; determines the fit between corporate culture & strategy

SYSTEMS: INSTALLING STRATEGIC SUPPORT


Cross-functional decision criteria gave better results then functionally anchored decision criteria
Enabled managers to quantify subjective interaction into more easily understood framework Provides timely access to both qualitative and quantitative data Estimate how much to invest, which business model to support and which capabilities are needed Concerns related to security/ privacy of data are issues related to implementation of IT system Development of a decision-support model to assist in making complicated cross functional issue easier to understand

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MANAGERIAL LEVERS
The exercising of strategic leadership

Interacting

The strategic shaping of corporate culture

Organizing

Allocating

Understanding when and where to allocate resources

Monitoring

Tying rewards to achievements

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INTERACTING

Strategic Leadership is a critical implementation lever for building a capable organization.

Direction Responsibilities under Strategic implementation Protection Orientation Motivation Managing Conflict
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INTERACTING.CONTD.

Five levels of Leadership hierarchy:-

Highly capable individuals

Contributing team member

Competent manager

Effective Leadership

Executive
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ALLOCATING

Allocation of Resources: Understanding when and where to allocate resources

Resources

Encompasses the use of major resources such as money, people and capabilities. In addition to financial resources; Physical capital Human capital Organizational capital

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MONITORING
Results of Strategy Performance

Reward

Achievement

Outcome

Two major probabilities of outcome Ways of taking performance to next level

Favorable

Non Favorable

Monetary

Non Monetary

Corrective Actions

o Popular Technique: Tying reward to achievements is linking executive pay to organization's overall ROE . The lever suggests using multiple type of awards for motivating and encouraging employees E.g. Genpact has the system of awarding - Gold, Silver and Bronze Recognition Certificates to their employees along with the commensurate performance bonuses

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ORGANIZING

Organization Culture is a powerful strategic implementation tool for business Culture is a system of shared values and norms in an organization Culture

Internal (operational)

Engineering Culture (Core technology)

Executive Culture (A Model to follow)

Shaping of Organizational Culture requires:


Clarity Consistency Comprehensiveness

The Strategy formulation performance gap can only be removed if the organization culture is ready to adapt to higher standards and develop appropriate attitude and behaviour in the long run

USE OF LEVERS AT DIFFERENT STAGE


Entrepreneur needs to understand the impact of each of the levers and its strengths and weaknesses Early Stage An analytical tool to identify levers that might serve as barrier to companys long term success.

Entrepreneur knows the role and impact of each lever to overcompensate one lever weakness with another lever strength successful implementation of well formulated and appropriate strategy for established firms to achieve overall corporate success

Established Stage

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CONCLUSION
Role : facilitated the formulation and implementation of strategies

Resistance :Unless weak lever were identified and overcome, it would constraint future strategy formulation

Relaxation : Use of all eight levers are not necessary , a clear understanding of each levers role and its impact on ability to suceed is necessary

Result : Strategy Implementation helps create future


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Thank You

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