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Building a capable organization: The eight levers

of strategy implementation
Victoria L. Crittenden
a,
*
, William F. Crittenden
b
a
Carroll School of Management, Boston College, Fulton Hall 450B, 140 Commonwealth Avenue,
Chestnut Hill, MA 02467, U.S.A.
b
College of Business Administration, 101 Hayden Hall, Northeastern University, Boston, MA 02115, U.S.A.
If you give me a lever and a place to stand, I shall
move the earth. Archimedes (287212 BC)
1. Implementation: The gap between
formulation and performance
Mankins and Steele (2005) report companies realize
only 63% of the nancial performance promised by
their strategies. Kaplan and Norton (2005) attribute
this strategy-to-performance gap, in part, to the
fact that 95% of a companys employees are not
aware of or do not understand their companys
strategy. According to Johnson (2004), however,
66% of corporate strategy is never implemented.
This suggests that the problem lies somewhere in
the middle of this strategy-to-performance gap, with
a more likely source being a gap in the formulation-
to-implementation process. If employees lack knowl-
edge about the companys strategy, it is unlikely that
proper implementation will occur, which in turn
leads to poor nancial performance.
Bonoma and Crittenden (1988) suggested that
this habitual mode of poor strategy execution then
Business Horizons (2008) 51, 301309
www.elsevier.com/locate/bushor
KEYWORDS
Strategy;
Implementation;
Managerial levers;
Performance
Abstract The habitual mode of poor strategy implementation shaping the next
round of strategy formulation weakens the subsequent planning cycle. Unfortunately,
decades of company interactions consisting of research, teaching, and consulting
suggest that strategy implementation has become a catchall of phrases and recom-
mendations, with little clarity as to what comprises this necessary cornerstone of a
capable organization. Strategists tend to use powerful terminology when referring to
implementation efforts. Descriptors such as killers, confrontation, and engagement
are linked with actions like conquering, blocking, tackling, and honing when discuss-
ing strategy implementation. Our contention is that implementation is a critical
cornerstone or ally in the building of a capable organization, and the use of the
appropriate levers of implementation is the pivotal hinge in the development of
the organization. Ultimately, strategy implementation helps create the future, not
inhibit it.
# 2008 Kelley School of Business, Indiana University. All rights reserved.
* Corresponding author.
E-mail addresses: victoria.crittenden@bc.edu
(V.L. Crittenden), w.crittenden@neu.edu (W.F. Crittenden).
0007-6813/$ see front matter # 2008 Kelley School of Business, Indiana University. All rights reserved.
doi:10.1016/j.bushor.2008.02.003
Copyright 2008 by Kelley School of Business, Indiana University. For reprints, call HBS Publishing at (800) 545-7685.
BH 283
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shapes the next round of strategy formulation, thus
weakening the strategy formulated subsequently.
Without a doubt, the overall neglect of strategy
implementation leads to poor performance both
in the current execution and in future strategy
formulation processes. Unless caught in time, the
endless formulation-implementation-performance
cycle leads to subsequent attempts at implementing
a mistaken strategy. When this occurs, it is hard to
tell if weak performance is due to good implemen-
tation of a bad strategy, or the result of poor
implementation of a good strategy.
Unfortunately, decades of research, teaching,
and consulting interactions with companies suggest
that strategy implementation has become a catch-
all of phrases and recommendations, with little
clarity as to what comprises this necessary corner-
stone of a capable organization. The catchall tends
to boil down to rules or piecemeal components of
implementation, usually with implementation be-
ing a necessary but evil component, rather than an
overarching framework for guiding the implemen-
tation process. This transformation means the
questions must change: What actually constitutes
strategy implementation? Is strategy implementa-
tion an opponent, or can it be an ally for the
organization?
1.1. Strategy implementation: Opponent
or ally?
Over the years, management strategists have of-
fered considerable advice regarding strategy imple-
mentation. Beer and Eisenstat (2000) attempt to
capture much of this advice in their description of
the six silent killers of strategy implementation,
with the idea being that managers who confront
these killers, rather than using avoidance or mana-
gerial replacement techniques, could overcome
them and therefore become a capable organization.
The six silent killers were identied as
1. Top-down or laissez-fair senior management
style,
2. Unclear strategy and conicting priorities,
3. An ineffective senior management team,
4. Poor vertical communication,
5. Poor coordination across functions, businesses,
or borders, and
6. Inadequate down-the-line leadership skills and
development.
Strategists tend to use powerful terminology to
describe the importance of implementation. Beer
andEisenstat (2000) use terminology such as killers,
confrontation, and engagement. Mankins and
Steele (2005) refer to conquering the gap between
strategy and performance, and offer tactical spec-
icity for conquering the formulation-implementa-
tion-performance process: keep it simple/make it
concrete, debate assumptions/not forecasts, use a
rigorous framework/speak a common language,
discuss resource deployment early, clearly identify
priorities, continuously monitor performance, and
reward/develop execution capabilities. It is as
though strategy implementation requires strategic
warfare. Others, such as Porter and Harper (2003),
use sports phrases such as blocking and tackling,
and suggest that managers must hone their imple-
mentation skills.
Our contention is that strategy implementation
is not an opponent that needs to be conquered or
tackled. Rather, strategy implementation is a crit-
ical cornerstone and ally in the building of a
capable organization, and the use of the appropri-
ate levers of implementation will be the pivotal
hinge in the development of that organization. As
such, we offer eight levers of strategy implemen-
tation.
The ancient Greek mathematician Archimedes
(287212 BC) suggested that levers make work
easier by using a fulcrum to magnify ones effort
against a force or resistance. Building upon earlier
implementation work by Bonoma and Crittenden
(1988), in conjunction with Thompson, Gamble,
and Stricklands (2006) strategy execution process,
our framework brings together critical structural
and managerial skill levers necessary for the build-
ing of a capable organization. While this does not
suggest that all eight levers are necessary for suc-
cessful strategy implementation, the identication
of the levers allows companies to identify strong and
weak points that could impact the implementation
process.
1.2. Strategy research: Organizational
stories
Data from two decades of company-based research
provides insight into how companies have at-
tempted, either successfully or unsuccessfully, to
mesh their structural and managerial skills in their
strategy implementation efforts.
This project examined strategy implementation
issues within the context of a company database
comprised of 124 organizational stories. These or-
ganizational stories were derived from both primary
and secondary sources. A total of 29 of the organi-
302 V.L. Crittenden, W.F. Crittenden
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zational stories have been developed into full-
length case studies with varying foci, and 95 of
the stories are now in use as short vignettes explain-
ing how a particular business challenge was handled
by the organization.
This is not a longitudinal study. That is, compa-
nies were examined, and a case or vignette com-
piled for a particular point in time. While the
companies in the story database can be viewed from
a variety of perspectives, the traditional product
(consumer, business-to-business, service, or non-
prot) and market distinctions (International or
U.S. based) are used to describe the companies.
An epigrammatic overview of these 124
company stories, per the product and market per-
spective, is provided below, and then a brief
description of the companies referenced in this
article is given.
1. Consumer companies69 stories (9 internation-
ally-based)
2. Business-to-business companies15 stories (5
internationally-based)
3. Service companies33 stories (3 internationally-
based)
4. Nonprot companies7 stories (2 international-
ly-based)
1.2.1. Organizational stories: Consumers
1. Cutco Cutlery Corporation is the largest manu-
facturer and marketer of high-quality kitchen
cutlery and accessories in the United States
and Canada. Vector Marketing Corporation is
the companys sales division. ALCAS Corporation
is the parent company.
2. Founded in Quincy, Massachusetts, Dunkin Do-
nuts operates franchise retail outlets offering
coffee, donuts, and mufns.
3. Southern Home Developers (disguised name) was
located in a rural town in central Arkansas. The
company operated out of a small, corrugated
metal production facility with a crew of ve
men who built modules in the facility for trans-
port to a housing site for nal assembly.
1.2.2. Organizational stories: Business-to-
business
1. Floral Farms (disguised name) grows and markets
fresh-cut owers. The company owns its own
farms in Colombia, and its marketing organiza-
tion is located in Miami, Florida.
2. A global pharmaceutical company, Merck & Co.,
Inc. is dedicated to developing advances in prod-
ucts that will address unmet medical needs.
3. Navistar International Transportation Corpora-
tion operates in one principal industry seg-
mentthe manufacture and marketing of
medium and heavy trucks. This includes school
bus chassis, mid-range diesel engines, and ser-
vice parts.
4. OMED Medical Supplies is located in Athens,
Greece. The company, a distributor of medical
supplies to hospitals in Greece, was established
in December of 2005 as a legal entity of single
person/owner company (atomiki epihirisi).
5. Originally located in Newton, Massachusetts,
Powrtron (disguised name) is a private, predomi-
nately family-held, company engaged in the
manufacture and sale of electronic analog circuit
modules, isolation ampliers, and power con-
verters.
1.2.3. Organizational stories: Service
Service provider e-Motion Software LP is headquar-
tered in Bedford, Massachusetts. Its service is linked
to the Oracle E-Business Suite of products. The
company provides support that makes Oracle Appli-
cations more reliable, enhances the applications
functionality, and increases the efciency of use in
the Suite.
1.2.4. Organizational stories: Nonprot
Based in Boston, Massachusetts, Battered Women
Fighting Back! was an education and advocacy group
that addressed the severity of domestic violence as
a human rights violation. Its primary charge was to
eradicate domestic violence in society and to pro-
mote human rights for everyone.
2. Implementation: Structures and
managerial skills
Bonoma and Crittenden (1988) suggest that imple-
mentation is comprised of two main variables, struc-
tures and managerial skills. Structures provide the
framework or conguration in which companies
operate effectively. Managerial skills are the behav-
ioral activities that managers engage in within the
structures developed by the organization. Strategies
are implemented through the structure, with mana-
gerial skills as key indicators of the successful or
unsuccessful accomplishment of the implementation
effort. Thompson, Gamble, and Strickland (2006)
Building a capable organization: The eight levers of strategy implementation 303
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liken these managerial skills to management tasks
that arise in executing strategy. With research from
these two sets of authors as a guide, eight levers of
implementation are specied in the current re-
search. Consistent with the research of Bonoma
and Crittenden (1988), these eight levers are divided
into structure and skills.
Structural variables offer an implementation
toolkit for identifying key levers that affect the
formulation-implementation process and ensuring
formulation-implementation-performance cycle.
Within the capable organization framework sug-
gested here, structural levers of implementation are
1. Actionswho, what, and when of cross-function-
al integration and company collaboration;
2. Programsinstilling organizational learning and
continuous improvement practices;
3. Systemsinstalling strategic support systems;
and
4. Policiesestablishing strategy supportive poli-
cies.
Managerial skills are discretionary in nature and
vary with individual perceptions and behavior. Skill-
related implementation levers in the capable or-
ganizations framework are
5. Interactingthe exercising of strategic leader-
ship;
6. Allocatingunderstanding when and where to
allocate resources;
7. Monitoringtying rewards to achievement; and
8. Organizingthe strategic shaping of corporate
culture.
2.1. Structural levers
2.1.1. Actions: Fostering cross-functional
integration and company collaboration
Crittenden (1991) states that successful strategy
implementation requires the input and cooperation
of all players in a company. Three levels of strategy
form a hierarchy of strategy within a company:
corporate strategy, business strategy, and function-
al strategy. Successful strategy implementation,
regardless of strategy level, requires the input
and cooperation of every member of a companys
workforce, whether the implementation involves
the development and distribution of a new product,
or the merging of two companies in order for one or
both to remain competitive in the marketplace. The
database of company stories from our research is
ripe with cross-functional integration issues. Com-
panies such as Floral Farms and Southern Home
Developers were deluged with cross-functional is-
sues hindering the implementation of formulated
strategies. Floral Farms grew and marketed fresh-
cut owers. Developing new ower strains, and the
growing and development of products, took place in
South America, with product sales occurring in the
United States via a Miami-based sales force. Not only
did the employees in the two different countries
speak different languages, but also neither geo-
graphic group made the effort to better understand
the others functional priorities. Therefore, consid-
erable effort was devoted to making sure production
and sales worked in sync.
In Floral Farms pursuit of a market orientation
(formulated strategy), a consultant suggested that
the two groups close the geographic distance by
visiting each others ofces at least twice a year. By
doing so, marketing would see the trials and trib-
ulations of growing agricultural products, and pro-
duction would see rsthand what it was like to
respond to the demands of customers. The grand
nale of these efforts was a company-wide strategy
meeting in which the company was supposed to
embark upon a new growth effort. After initial
executive comments, this meeting was turned over
to the marketing staff to set the stage for growth.
Unfortunately, the nale did not end with the
intended energizing big bang. Instead, it ended
with a few brief comments by the production
manager:
You made a very nice presentation. Its too bad we
cant increase output by the amounts you pro-
jected for the 12-month time period. We cant
change production for any of the products for the
next 11 months. Whats planted is planted. I will
send you an overview of product availability for
the upcoming scal period.
Therefore, it was not the lack of an appropriately
formulated strategy, but actions within the struc-
ture at Floral Farms that prevented a positive per-
formance outcome.
But what happens when the formulated strategy
does not appropriately t with a companys cross-
functional ability to implement? Southern Home
Developers depicts an example of a company that
began to implement a formulated strategy of mass
customization without the means for doing so. This
company experienced early success with its modular
home construction. Modular homebuilders build,
deliver, and install a single-family dwelling for about
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half the cost of a site-constructed home in about
10-20% percent of the time relative to site-
constructed homes. Therefore, the competitive ad-
vantages are low price and short cycle times. The
owner of Southern Home Developers decided to take
orders for customized modular homes. That meant
he was going to attempt a formulated strategy of
mass customization. Unfortunately, cost overruns
and longer setup times led to conict between
the companys sales person and the manufactur-
ing/set-up crew. Promises made by the sales person
did not mesh with the companys manufacturing
expertise. It was not clear that a mass customization
strategy was even appropriate in a marketplace
driven by low prices and short cycle times.
Collaborations across companies occur in many of
the company stories. Dunkin Donuts required sig-
nicant collaboration within its supply chain for the
successful rollout of its new bagel product. With
projected sales running high, the product volume
promised by the supplier was not met, and caused
signicant delays in the product rollout plan. Such
delays were costly, and lost sales could not be
recaptured. The aggressive rollout, however, was
not supported by all functional areas within the
company. Therefore, while experiencing supply
problems with its collaborative partner, the compa-
ny also faced I told you so objections internally.
2.1.2. Programs: Instilling organizational
learning and continuous improvement
practices
Florida and Goodnight (2005) suggest that a com-
panys most important asset is not its raw materials,
transportation systems, or political inuence. Rath-
er, these authors claim that a companys most im-
portant asset is its creative capitalthat is, the
creative thinkers in the rm. From an implementa-
tion perspective, creative capital must be planned
for in the rm, and will determine the strategies
that are ultimately formulated and implemented.
However, Schrage (2005) reports that hiring the
right people is not sufcient in the implementation
model, because as noted by one CIO, Even if you
hire the right peopleand we think we dothey
need to be in an environment that encourages them
to be innovative in ways we can use.
It appears, then, that organizational learning and
continuous improvement must incorporate innova-
tion into this implementation lever. Santos, Doz,
and Williamson (2004) reinforce the importance of
innovation in the implementation process when they
describe the integrated innovation chain. This chain
enables innovation to transcend local and national
boundaries by encouraging companies to bring to-
gether global partners in the innovation effort.
Innovation is at the heart of several of the com-
pany stories. In 2004, Merck was presented with an
unprecedented challenge in its voluntary recall of
Vioxx. It was not business as usual at Merck, given
the considerable concern for the long-term impact
of the legal decisions regarding Vioxx. Yet, amidst
this uproar during tumultuous times, the companys
sales people had to keep their spirits up and believe
in the company that they represented. The sales
force essentially needed to become better informed
about the company as an innovative organization. In
order to achieve this, the sales force in one geo-
graphic region was presented with an overview of
the innovative efforts within the company, including
new vaccines, HIV/AIDS international programs, im-
proved products, tablet computers for the sales
force, customization of information on the web,
patient assistance programs, and licensing deals.
The sales people learned how the company was
developing innovative programs for continuous im-
provement, and that the company was not reliant on
one product for long-term success.
2.1.3. Systems: Installing strategic support
systems
Ross and Weill (2002) suggest that companies that
manage their information technology investments
successfully will generate 40% higher returns than
their competitors. Essentially, the strategic support
system provides timely access to both qualitative
and quantitative data about customers, human re-
sources, revenues and costs, and inventory/order
fulllment. Strategically, decisions have to be
made about how much to spend, which business
process to support, andwhich capabilities are need-
ed company-wide versus function-wide. Tactically,
the quality of information technology needed in the
rm and security/privacy concerns are issues that
arise in the implementation of the information
technology itself.
In conjunction with its action structural lever,
Floral Farms utilized its systems lever in the devel-
opment of a decision-support model to assist in
making complicated cross-functional issues easier
to understand. Mapping the cross-functional deci-
sion process into a decision-support system enabled
managers to quantify subjective interactions and
include situational aspects of marketing and pro-
duction interactions into a more easily understood
framework. Using the decision-support system as a
means of understanding the possible consequences
of individual marketing, joint marketing, and pro-
duction decision-making showed that functionally
anchored decision criteria gave poorer results than
cross-functional decision criteria. Additionally, the
development, operationalization, and discussion of
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this strategic support system led to positive inter-
functional discussions rather than negative confron-
tation.
2.1.4. Policies: Establishing strategy
supportive policies
Strategy-supportivepolicies envelopacollectivepat-
tern of day-to-day decisions and actions. Thompson
et al. (2006) reinforce the notion of top-down or
formal guidance regarding such behaviors and ac-
tions. Additionally, there should be consistency
across geographically dispersed units. There is a
tendency, unfortunately, to create policies in re-
sponse to particular incidents rather than in response
to a pattern of incidents. The end result is a list of
things that should be done, which when viewed in
total, does not support the companys overall mission
and objectives. Additionally, policies tend to change
with changes in management.
The Powrtron companys management, in grap-
pling with unprecedented problems of constrained
capacity, was quick to respond with a new policy
whenever a delivery problem arose. The responses
ranged from a plan to move production to a larger
facility to making delivery promises of 6 weeks or
less. Although the company divided its customers
into three tiers, it began treating all customers
alike. The lack of strategy-supportive policies
had, in essence, served to defeat strategic decisions
about account management. Not only did this result
in customer relationship problems, but reactive
policy changes also incited conict among Powrtron
functional management members and created a
culture of unproductive conict. Unfortunately,
the companys CEO delegated the handling of com-
pany interactions to his COO and was not visibly
present during this intense time within the compa-
ny, although he was the one who had made the
inconsistent policy changes that led to considerable
company instability.
2.2. Managerial skills levers
2.2.1. Interacting: Exercising of strategic
leadership
Key responsibilities of leaders include direction, pro-
tection, orientation, managing conicts, and shaping
norms (Heifetz & Laurie, 2001). Collins (2005) exam-
ines such responsibilities of leaders and offers
a leadership hierarchy consisting of ve levels:
Level 1Highly capable individual (contributions
through talent, knowledge, skills, and work habits);
Level 2Contributing team member (group
objectives, and works effectively in group); Level
3Competent manager (organizes people and
resources); Level 4Effective leader (vision and high
performancestandards); andLevel 5Executive(en-
during greatness through personal humility and pro-
fessional will). While not necessary to move
sequentially through the hierarchy, an executive
must possess all of the skills inherent in levels 1 to
4, as well as the characteristics of a level 5 leader.
All ve levels of leadership were exhibited in the
database. One particular level 5 leader stands out in
the database of companies. After a few years of
weak sales and unprotable effort at international
expansion, Cutco Cutlery Corporation was starting
to pull out of the downward spiral that had resulted
in considerable layoffs. Bringing the company back
into protability demanded effort from the entire
workforce, but eventually the future began to look
positive. In the summer of 2006, the CEO of parent
company ALCAS Corporation planned to purchase a
new car, but recognized that he needed to lead by
example. He decided to intentionally purchase a
car he would feel comfortable parking on the
manufacturing facilitys lot next to those of many
who were just being recalled to work.
An in-depth review of all of the organizational
stories shows that strategic leadership, whether it is
conspicuous or not, is a critical implementation
lever for building a capable organization. From
the entrepreneur who worked days as a consultant
while devoting nights and weekends to building e-
Motion Software LP, to the executive director and
founder of Battered Women Fighting Back! who
realized she might have reached the end of her
leadership capabilities, all company situations ex-
hibited the importance of the leadership lever in
implementing strategy.
2.2.2. Allocating: Understanding when and
where to allocate resources
Resource allocation encompasses the use of major
resources such as money, people, and capabilities.
In addition to nancial resources, Montgomery
(1992) identies resources such as physical capital
(plant, equipment, geographic location, and access
to raw materials), human capital (training, experi-
ence, judgment, intelligence, relationships, and the
insight of managers and workers), and organization-
al capital (formal reporting systems, informal rela-
tionships within the rm, and relationships between
the rm and its external environment).
A startup company in Greece, OMED Medical
Supplies, realized that resource allocation was
probably its most critical implementation lever ear-
ly in the companys existence. With nancial back-
ing from family money, nancial resources were the
most dominant capital that OMED possessed. Physi-
cally, the company did not manufacture products
or store products in inventory. The fact that the
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company was located in Athens provided consider-
able geographic capital because Athens is the center
of much medical activity. Human capital was a
major resource for OMED. The owners family has
a strong medical background, with three physicians
in the immediate family, including two located in
Greece, and one in the United States. However, the
rms organizational capital was questionable.
There were no formal systems or structures in place
while the owner covered all aspects of the business
and ran the business from her home. Informally,
however, the historical relationships the owner
had within the industry due to her family connec-
tions allowed for organizational capital that other-
wise would have taken considerable time to build.
2.2.3. Monitoring: Tying rewards to
achievement
Reward systems are generally divided into monetary
and non-monetary incentives. Monetary incentives
include such rewards as salary increases, perfor-
mance bonuses, stock options, retirement
packages, promotions, and various perks. Non-
monetary incentives include praise, constructive
criticism, visible recognition, interesting assign-
ments, job responsibility, and job security. Accord-
ing to Byrnes (2006), money is where the rubber
meets the road, and good work should be rewarded,
bad work should be penalized, and executive pay
should depend on the entire corporations return on
equity, which encourages team building.
This is not unlike the incentive system at Vector
Marketing Corporation, the sales and marketing arm
of Cutco Cutlery Corporation, where sales managers
receive tremendous nancial bonuses for outstand-
ing sales. However, because they believe strongly in
praise and visible recognition, Vector Marketing
announces these bonuses at the year-end banquet.
Therefore, not only do managers enjoy the nancial
rewards of the bonuses, but they also receive ex-
ternal acknowledgement of their nancial success
among their peers. Like many companies relying
upon the strength of its sales force to drive sales,
Vector Marketing realizes that it must use multiple
types of rewards to encourage and motivate em-
ployees in a direct selling company that relies on a
college-student sales force. The company prides
itself on its cornerstones of people, products, and
programs, and utilizes each of these elements in the
monitoring lever to build a capable organization.
2.2.4. Organizing: Strategic shaping of
corporate culture
Chatman and Cha (2003) suggest that culture relates
strongly to strategy implementation. They dene
culture as a systemof shared values (dening what is
important) and norms (dening appropriate atti-
tudes and behaviors). While an organizational cul-
ture is unique to each company, shaping corporate
culture requires clearness in content, consistency in
nature, and comprehensiveness in coverage. Schein
(1996) proposes that there are three different types
of cultures in an organization: (a) internal culture
that is based on operational success, (b) engineering
culture that drives the core technologies, and (c)
executive culture that engages the CEO and imme-
diate subordinates.
Company culture came through loud and clear in
the company database of organizational stories. The
importance of internal culture was demonstrated,
for example, at Floral Farms. Unfortunately, the
internal culture driven by functional silos was a
negative force in that company. This negativity with
respect to internal culture can be juxtaposed with
the positive internal culture of a company like
Navistar International Transportation, where the
lack of functional silos enabled the company to
implement programs that resulted in positive mar-
ketplace results. Navistar implemented a strategy
of mass customization, due largely to the companys
actions and systems levers that were part and parcel
of the companys engineering culture driving its core
technologies.
Within the company database, the impact of
executive culture in companies of all shapes and
sizes is evidenced. Battered Women Fighting Back!
(BWFB), a nonprot organization, relied almost sin-
gularly on its executive director and founder to
shape its culture as it was catapulted into national
acclaim. The executive director and two lm com-
rades from Cambridge Documentary Films won an
Academy Award for the best documentary lm. The
director had worked in human rights organizations
around the world, and had won numerous awards in
the nonprot world. She was the backbone of the
organization; however, she began to wonder if the
culture she had instilled in the BWFB organization
was enough to take it to a stronger level of oper-
ations. She recognized that while culture is a unique
characteristic within all companies, it is also a
powerful implementation tool for managers, and
is reected in managerial decision-making.
3. Balancing the implementation
levers
Strategy implementation is generally studied within
the context of established organizations. While the
eight levers that assist in building a capable organi-
zation can also serve as barriers in any organization,
it was evident in the organizational stories that
Building a capable organization: The eight levers of strategy implementation 307
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established rms are generally able to overcompen-
sate with another lever to reduce the impact of a
weak lever. When a company is in the early stages of
startup, however, it is imperative that the entre-
preneur or CEO understands how each of the levers
relate to the companys strengths and weaknesses.
Unless identied, a weak lever can negatively feed
the endless formulation-implementation-perfor-
mance cycle that leads to subsequent attempts at
implementing a strategy highly dependent upon
that weak lever.
The idea of building a capable organization via an
understanding of the eight levers of implementation
was examined at OMED Medical Supplies, the startup
company in Greece referred to earlier. The sole
proprietor launched her business in January of
2006, and the company was just beginning to con-
tact both potential customers and suppliers at that
time. Model assessment within a startup company
has two major objectives: (a) It allows the in-depth
examination of the eight levers within the context
of one company, and (b) it facilitates the develop-
ment of the levers as an analytical tool for a startup
company to use in identifying levers that might
serve as barriers to the companys long-term suc-
cess. Managerially, model assessment enables the
proprietor to better understand her internal
strengths and weaknesses when it comes to the
notion that implementation might truly drive the
strategy formulation process.
Over a 2 month period, we worked with the
proprietor of OMED Medical Supplies to examine
each of the eight levers within the context of her
startup company. After an in-depth analysis of each
of the eight levers, it was evident that the proprie-
tor was relying largely on her managerial skills in
the early stages of company development. There
was uncertainty surrounding the rewards lever, but
this was likely due to the fact that there were no
monetary or people interactions at that stage of
development.
It became immediately apparent that the weak
links in the companys implementation efforts rest-
ed within the structural levers. While the company
was going to be dependent upon collaborations with
suppliers, no mechanisms or strategic support sys-
tems had been put in place to facilitate such inter-
actions, nor had the company invested time, energy,
or dollars in the pursuit of such technology efforts.
Additionally, while company suppliers were gov-
erned by regulations surrounding ISO certication
and CE Marking (compliance within the European
health, safety, and environmental protection legis-
lation), the proprietor had established no policies
related to her own operation within these supplier
boundaries. Of the four structural levers, the owner
believed that organizational learning and continu-
ous improvement practices were strengths, yet she
had not engaged in any benchmarking efforts relat-
ed to continual improvement.
Overall, using the levers as a managerial tool
allowed for the identication of efforts that would
facilitate formulation and implementation efforts,
and for the identication of forces of resistance that
could inhibit the implementation process. Unless
weak levers were identied, overcome, or worked
around, they would ultimately constrain future
strategy formulation efforts. For this startup com-
pany, it was found that the proprietor was playing on
managerial skills that tended to be discretionary in
nature. The ritualized activities that have to be
formally embedded in an organization are what
the proprietor had been overlooking in her startup
efforts.
While building a capable organization does not
necessarily require use of all eight levers equally, a
capable organization has to have a clear under-
standing of each levers role and its impact on the
organizations ability to succeed. It is only when an
organization understands the capabilities of each
lever within the organization that it can determine
the right amount of leverage. For example, the
actions lever was weak at Floral Farms, an organi-
zation that had been in business for many years.
Even with attempts to strengthen this lever, it was
only through the successful parlaying of the systems
lever that the company was able to become stronger
in its efforts to implement a market orientation
strategy. Another well-established company, Cutco
Cutlery Corporation, appears to have a clear under-
standing of each lever, and to have found its own
unique blend of structural variables and managerial
skills that enables it to have success in marketplace.
A startup company, OMED Medical Supplies, is
attempting to build each of the eight levers into
the fabric of the organization.
4. Strategy implementation: An ally
Strategy implementation helps create the future. As
an ally and not an opponent, the implementation
process works side-by-side with the formulation
process, and such collaboration leads to plans that
are nancially, socially, and ethically responsible
strategies for a company. Successful implementa-
tion of a well-formulated and appropriate strategy
will enable a company to become better and better
over time, therefore achieving its longer-term vi-
sion of a good mission, good planning, and overall
corporate success. The eight levers of implementa-
tion identied here provide organizations with an
308 V.L. Crittenden, W.F. Crittenden
This document is authorized for use only in Strategy Implementation by Dr. Bala Krishnamoorthy at NMIMS from June 2014 to December 2014.
evaluative opportunity to determine which levers
are working well, which levers need to be down-
played due to inherent weakness, and which levers
need to be improved given marketplace conditions.
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