EIGHT LEVERS OF STRATEGY IMPLEMENTATION

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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 2 .

    Organization Structure Control Systems Culture Strategy Formulation Strategy Implementation Performance 3 . Broader aspect of Strategy Implementation is all about Developing and Utilizing its important parameters viz.STRATEGY IMPLEMENTATION  Strategy Implementation is the translation of chosen strategy into organizational action so as to achieve strategic goals and objectives.

Implementation Formulation Poor Performance Poor Formulation Good Implementation Poor Performance Good Formulation Poor Implementation 4 .F-I-P CYCLE Performance Strategy implementation shapes the next round of strategy formulation.

businesses or borders.IMPLEMENTATION – A GAP  Research of Management Strategists:  Mankins & Steele (2005)  Companies realize only 63% of performance promised by their strategies. Inadequate down-the-line leadership skills and development  Beer & Eisenstat (2000) – Six Silent Killers       5 .  Kaplan & Norton (2005)   Johnson (2004)  66% of the corporate strategy is never implemented. An Ineffective senior management team. Poor vertical communication. Poor coordination across functions. Top-down or Laissez-Fair Senior Management Style Unclear Strategy and conflicting priorities. Poor implementation is to the fact that 95% of employees do not understand company’s strategy.

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 6 .

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. 7 .

PROGRAMS Organizational learning & continuous improvement must incorporate innovation into the implementation lever Creation of Innovation Chain to include global partners in the innovation effort 8 .

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. how people are treated. determines the fit between corporate culture & strategy 9 . 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. Policy communicates what is expected. guides strategy-related activities. and what corporate beliefs and attitudes mean in everyday terms.

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 10 .

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 11 .

Direction Responsibilities under Strategic implementation Protection Orientation Motivation Managing Conflict 12 .INTERACTING  Strategic Leadership is a critical implementation lever for building a capable organization.

INTERACTING………………….CONTD.  Five levels of Leadership hierarchy:- Highly capable individuals Contributing team member Competent manager Effective Leadership Executive 13 .

 Physical capital  Human capital  Organizational capital  14 . In addition to financial resources. people and capabilities.ALLOCATING Allocation of Resources: Understanding when and where to allocate resources Resources  Encompasses the use of major resources such as money.

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 . Silver and Bronze Recognition Certificates to their employees along with the commensurate performance bonuses 15 .Gold.

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 company’s 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 17 .

a clear understanding of each lever’s role and it’s impact on ability to suceed is necessary Result : Strategy Implementation helps create future 18 . it would constraint future strategy formulation Relaxation : Use of all eight levers are not necessary .CONCLUSION Role : facilitated the formulation and implementation of strategies Resistance :Unless weak lever were identified and overcome.

Thank You 19 .

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