Unit 3

Strategy Implementation

Strategy Formulation vs Strategy Implementation

Following are the main differences between Strategy Formulation and Strategy Implementation-

Strategy Formulation Strategy Implementation

Strategy Formulation includes planning and decision- Strategy Implementation involves all those means related
making involved in developing organization’s strategic to executing the strategic plans.
goals and plans.

In short, Strategy Formulation is placing the Forces In short, Strategy Implementation is managing forces
before the action. during the action.

Strategy Formulation is an Entrepreneurial Strategic Implementation is mainly an Administrative

Activity based on strategic decision-making. Taskbased on strategic and operational decisions.

Strategy Formulation emphasizes on effectiveness. Strategy Implementation emphasizes on efficiency.

Strategy Formulation is a rational process. Strategy Implementation is basically an operational

process.

Strategy Formulation requires co-ordination among few Strategy Implementation requires co-ordination among
individuals. many individuals.

Strategy Formulation requires a great deal of initiative Strategy Implementation requires specific motivational
and logical skills. and leadership traits.

Strategic Formulation precedes Strategy Implementation. STrategy Implementation follows Strategy Formulation.

Issues in strategy implementation

Unfortunately for many law firms, strategic plans frequently remain in the form of untouched documents,
failing to materialize as a part of the firm or its people. Research indicates that 90% of organizations fail
to effectively execute their strategic plans[1]. The reasons for this are varied, but, as discussed later in this
article, most hinge on the fact that strategy implementation is resource intensive and challenging.
Nonetheless, strategic planning remains a top priority among successful law firms, based on the
fundamental notion that an effective strategy offers unique opportunities for market differentiation and
long-term competitive advantage. Given the importance of strategy and its execution, firms today are
 increasingly asking the question - what are the best tools and methodologies to enable effective strategy
implementation?

Challenges in Strategy Implementation

All too often, law firms dedicate substantial internal and external resources to a strategy development
process, but ultimately, fail to move the firm in the direction identified or realize the benefits of their
investment. Why is it that so many firms fail in strategy implementation? The most common reasons
include:

 Insufficient partner buy-in: In conducting strategic planning, firm leaders and partners involved in the
process develop a strong understanding of the business imperative behind the chosen strategy and the
need for change in order to achieve partner goals. However, partners removed from the process may
struggle to identify with the goals and strategies outlined by firm leaders. These partners may not see a
need for change, and without understanding the background and rationale for the chosen strategy, these
partners may never buy-in to strategic plan and, as a result, will passively or actively interfere with the
implementation process.
 Insufficient leadership attention: Too often, law firm leaders view the strategy development process as
a linear or finite initiative. After undergoing a resource intensive strategic planning process, the firm's
Managing Partner and Executive Committee members may find themselves jumping back into billable
work or immersing themselves in other firm matters, mistakenly believing that writing the plan was the
majority of the work involved. Within weeks of finalizing the plan, strategies start to collect dust,
partners lose interest, and eventually, months pass with little or no reference to the plan or real action
from firm leaders to move forward with implementation.
 Ineffective leadership: Leading strategy implementation requires a balancing act - the ability to work
closely with partners in order to build cohesion and support for the firm's strategy, while maintaining the
objectivity required in order to make difficult decisions. Strategy implementation frequently fails due to
weak leadership, evidenced by firm leaders unable or unwilling to carry out the difficult decisions agreed
upon in the plan. To compound the problem, partners within the firm often fail to hold leaders
accountable for driving implementation, which ultimately leads to a loss of both the firm's investment in
the strategy development process as well as the opportunities associated with establishing differentiation
in the market and gaining a competitive advantage.
 Weak or inappropriate strategy: During the course of strategic planning, the lack of a realistic and
honest assessment of the firm will lead to the development of a weak, inappropriate or potentially
unachievable strategy. A weak strategy may also result from overly aspirational or unrealistic firm leaders
or partners who adopt an ill-fitting strategy with respect to the firm's current position or market
competition. Without a viable strategy, firms struggle to take actions to effectively implement the plan
identified.
 Resistance to change: The difficulty of driving significant change in an industry rooted in autonomy and
individual lawyer behaviors is not to be underestimated. More often than not, executing on strategy
requires adopting a change in approach and new ways of doing things. In the context of law firms, this
translates to convincing members of the firm, and in particular partners, that change is needed and that the
chosen approach is the right one.
By developing an awareness of these hurdles and traps which lead to failure in implementation, firms can
learn how to adapt their approach and develop tools to assist them in more successfully executing on their
strategy.

Tools for Success in Strategy Implementation

As a first step in ensuring the successful implementation of the firm's strategy, firm leaders must take
early and aggressive action to institutionalize the strategy within the firm. The Managing Partner, Chair,
and other key leaders must demonstrate visible ownership of the firm's strategy, communicating clearly
with partners about the details, value and importance of the strategy to the firm. Members of management
should also seek input and support from key opinion leaders and rainmakers early-on and request their
help in championing the strategy to other partners within the firm. Over time, such actions will assist in
generating buy-in among partners, leading to greater overall support for the strategic plan and the changes
inherent in its execution.

Having successfully sold the main tenets of a strategic plan to the partnership, firm leaders must then
reorient themselves around the task at hand: strategy implementation. This is where the real work begins.
To facilitate more effective execution, leaders should take the following critical actions:

Implementation Support Structure: To support effective implementation, firm leaders should ask the
question: does the firm have the right leadership, governance and operational structure required to support
effective implementation? Are the right people serving in the right places? Very often, firm leaders
demonstrate the behavior of dynamic and influential visionaries. However, such leaders may lack an
attention to detail and the organizational skills required to effectively drive day to day action. By
assessing whether the firm has the right people in the right places, a law firm can better ensure that
visionary firm leaders are appropriately supported by individuals who can get the daily actions of
implementation done.
Implementation Planning: A fundamental and critical step in moving forward with strategy execution
involves planning. Implementation planning entails developing a detailed outline of the specific actions
and sub-actions, responsibilities, deadlines, measurement tools, and follow-up required to achieve each of
the firm's identified strategies. Implementation plans often take the form of detailed charts which map the
course of action for firm leaders over a 24-36 month time period. Achieving a level of detail in these
plans provides for a tangible and measurable guide by which both the firm and its leaders can asses
progress in implementation over time.
Alignment of Management Processes: Successful implementation of a law firm's strategy also
requires alignment of the firm's partner compensation system, performance management approach, and
other related practice group and client team management structures and processes with the firm's chosen
strategy. The most common (and perhaps critical) example of a structure necessitating alignment is that of
partner compensation. Very often firms adopt strategic plans which require partner collaboration and
teamwork in order to achieve success, yet fail to modify the partner compensation system to reward such
activities. Failure to align management processes and structures with a newly adopted strategy frequently
results in a stall out of implementation efforts, as members of the firm direct individual behaviors to align
with the firm's historic rewards system, and not the newly stated strategy.
Measurement, Follow up and Accountability: A key component of success in implementation involves
holding firm leaders and partners accountable for actively driving and supporting execution. Whether
individuals are assigned discreet implementation activities (e.g. hire lateral IP partner) or asked to
participate in ongoing efforts to support strategic initiatives (e.g. expand existing Energy clients),
measurement and follow up is required. What actions have been taken to expand work for existing Energy
clients, and how much new business has been generated from these efforts? By following up and
assessing progress in implementation at regular intervals (e.g. monthly or quarterly), firms can more
effectively determine whether current implementation activities and assignments are working, or whether
a different approach is needed. Such assessments are crucial in ensuring that action is taken and progress
is made on strategy execution.
Incorporating Organizational Learning: As an evolving and recurring process, effective strategy
creation and implementation necessitates ongoing review of the firm's chosen direction. The strategic
planning process entails periodically evaluating the firm's strategy in light of internal and external
changes and incorporating lessons learned into the implementation plan. This key component of strategy
implementation ensures that the firm's strategy remains dynamic and drives ongoing competitiveness in
the market.
In the context of law firms, strategic planning represents a methodology for developing a shared
organizational view of the desired direction for the firm and outlining the process by which the firm will
move in that direction. For many firms, movement along the firm's chosen strategy can be intensely
challenging, and too often, implementation efforts fail. In order to realize the potential and value in a
firm's strategy, law firm leaders must dedicate themselves to driving successful implementation. This
requires planning, resources, time, attention, leadership and courage. Yet, the investment in
implementation is not without its rewards. By focusing the necessary energy on implementation, your
firm's strategy will no longer be the one collecting dust. If implemented properly, your firm's strategy will
be living and breathing inside your firm and driving your firm towards market differentiation and
competitive advantage.

Resource allocation

Resource allocation is a central management activity that allows for strategy execution. The real value of
any resource-allocation program lies in the resulting accomplishment of an organization's objectives.A
number of factors prohibit effective resource allocation, including an over-protection of resources, too
great an emphasis on short-run financial criteria, organizational politics, vague strategy targets, a
reluctance to take risks, and a lack of sufficient knowledge.

Managers normally have many more tasks than they can do. Managers must allocate time and resources
among these tasks. Pressure builds up. Expenses at too high. The CEO wants a good financial report for
the third quarter.

Strategy formulation and implementation activities often get deferred. Today's problems soak up available
energies and resources. Scrambled accounts and budgets fail to reveal the shift in allocation way from
strategic needs to currently squeaking wheels.
The relationship between resources and strategy is two-way. Strategy affects resources and resources
affect strategy.

Resources can be evaluated from several different perspectives:

The most prevalent way of evaluating them is by functional areas:

finance, research and development, human resources, operations, marketing.

A second way of evaluating resources is by type:

financial, physical, human, and organizational.

A third way of evaluating resources is in terms of their tangibility. Tangible resources (e.g., a plant or the
number of employees) can be observed and measured. Less tangible resources (e.g., corporate name) are
also important though their characteristics and importance are harder to evaluate.

Budgeting

Strategic budgeting is the process of creating a long-range budget that spans a period of more than
one year. The intent behind this type of budgeting is to develop a plan that supports a long -range
vision for the future position of an entity. This may, for example, involve the development of new
geographic markets, the research and development needed to introduce a new product line,
converting to a new technology platform, and the restructuring of the organization. In these
examples, it is not possible to complete the required activities within the period spanned by a single
annual budget. Also, if only annual budgets are used, it is possible that the funding needed for a
multi-year initiative will not be continued for the necessary full duration of the initiative, so that the
project is never completed. Thus, only by engaging in strategic budgeting can an organization hope
to achieve long-term improvements in its strategic position.
 A strategic budget is less concerned with the detailed revenue and expense line items typically
found in an annual budget. Instead, these classifications are aggregated into a smaller number of
line items. By doing so, there is less emphasis on the accuracy of specific items and a greater focus
on the overall goals to be achieved. The focus of strategic budgeting therefore shifts away from the
minutiae of budget-building and into such matters as:

 Strategic direction
 Risk management
 Competitive threats
 Growth options
 Reallocations of resources to higher-growth areas

Behavioral Issues

It is vital to bear in mind that organizational change is not an intellectual process concerned with the
design of ever-more-complex and elegant organization structures. It is to do with the human side of
enterprise and is essentially about changing people’s attitudes, feelings and – above all else – their
behavior. The behavioral of the employees affect the success of the organization. Strategic
implementation requires support, discipline, motivation and hard work from all manager and employees.

Influence Tactics: The organizational leaders have to successfully implement the strategies and achieve
the objectives. Therefore the leader has to change the behavior of superiors, peers or subordinates. For
this they must develop and communicate the vision of the future and motivate organizational members to
move into that direction.

Power: it is the potential ability to influence the behavior of others. Leaders often use their power to
influence others and implement strategy. Formal authority that comes through leaders position in the
organization (He cannot use the power to influence customers and government officials) the leaders have
to exercise something more than that of the formal authority (Expertise, charisma, reward power,
information power, legitimate power, coercive power)

Empowerment as a way of Influencing Behavior: The top executives have to empower lower level
employees. Training, self managed work groups eliminating whole levels of management in organization
and aggressive use of automation are some of the ways to empower people at various places.

Political Implications of Power: Organization politics is defined as those set of activities engaged in by
people in order to acquire, enhance and employ power and other resources to achieve preferred outcomes
in organizational setting characterized by uncertainties. Organization must try to manage political
behavior while implementing strategies. They should;

 Define job duties clearly.

 Design job properly.
 Demonstrate proper behaviors.
 Promote understanding.
 Allocate resources judiciously.
Leadership Style and Culture Change: Culture is the set of values, beliefs, behaviors that help its
members understand what the organization stands for, how it does things and what it considers important.
Firms culture must be appropriate and support their firm. The culture should have some value in it . To
change the corporate culture involves persuading people to abandon many of their existing beliefs and
values, and the behaviors that stem from them, and to adopt new ones. The first difficulty that arises in
practice is to identify the principal characteristics of the existing culture. The process of understanding
and gaining insight into the existing culture can be aided by using one of the standard and properly
validated inventories or questionnaires that a number of consultants have developed to measure
characteristics of corporate culture. These offer the advantage of being able to benchmark the culture
against those of other, comparable firms that have used the same instruments. The weakness of this
approach is that the information thus obtained tends to be more superficial and less rich than material
from other sources such as interviews and group discussions and from study of the company’s history. In
carrying out this diagnostic exercise, such instruments can be supplemented by surveys of employee
opinions and attitudes and complementary information from surveys of customers and suppliers or the
public at large.

Values and Culture: Value is something that has worth and importance to an individual. People should
have shared values. This value keeps the every one from the top management down to factory persons on
the factory floor pulling in the same direction.

Ethics and Strategy: Ethics are contemporary standards and a principle or conducts that govern the
action and behavior of individuals within the organization. In order that the business system function
successfully the organization has to avoid certain unethical practices and the organization has to bound by
legal laws and government rules and regulations.

Managing Resistance to Change: To change is almost always unavoidable, but its strength can be
minimized by careful advance. Top management tends to see change in its strategic context. Rank-and-
file employees are most likely to be aware of its impact on important aspects of their working lives. Some
resistance planning, which involves thinking about such issues as: Who will be affected by the proposed
changes, both directly and indirectly? From their point of view, what aspects of their working lives will
be affected? Who should communicate information about change, when and by what means?
What management style is to be used?

Managing Conflict: Conflict is a process in which an effort is purposefully made by one person or unit
to block another that results in frustrating the attainment of the others goals or the furthering of his
interests. The organization has to resolve the conflicts.

Linking Performance and Pay to Strategies: In order to implement the strategies effectively the
organization has to align salary increases, promotions, merit pay, bonuses etc., more closely to support the
long term objectives of the organization.

Leadership Styles

1. Democratic Leadership
Commonly Effective

Democratic leadership is exactly what it sounds like -- the leader makes decisions based on the input of
each team member. Although he or she makes the final call, each employee has an equal say on a project's
direction.
Democratic leadership is one of the most effective leadership styles because it allows lower-level
employees to exercise authority they'll need to use wisely in future positions they might hold. It also
resembles how decisions can be made in company board meetings.

For example, in a company board meeting, a democratic leader might give the team a few decision-related
options. They could then open a discussion about each option. After a discussion, this leader might take
the board's thoughts and feedback into consideration, or they might open this decision up to a vote.

2. Autocratic Leadership
Rarely Effective

Autocratic leadership is the inverse of democratic leadership. In this leadership style, the leader makes
decisions without taking input from anyone who reports to them. Employees are neither considered nor
consulted prior to a direction, and are expected to adhere to the decision at a time and pace stipulated by
the leader.

An example of this could be when a manager changes the hours of work shifts for multiple employees
without consulting anyone -- especially the effected employees.

Frankly, this leadership style stinks. Most organizations today can't sustain such a hegemonic culture
without losing employees. It's best to keep leadership more open to the intellect and perspective of the
rest of the team.

3. Laissez-Faire Leadership
Sometimes Effective

If you remember your high-school French, you'll accurately assume that laissez-faire leadership is the
least intrusive form of leadership. The French term "laissez faire" literally translates to "let them do," and
leaders who embrace it afford nearly all authority to their employees.

In a young startup, for example, you might see a laissez-faire company founder who makes no major
office policies around work hours or deadlines. They might put full trust into their employees while they
focus on the overall workings of running the company.

Although laissez-faire leadership can empower employees by trusting them to work however they'd like,
it can limit their development and overlook critical company growth opportunities. Therefore, it's
important that this leadership style is kept in check.

4. Strategic Leadership
Commonly Effective

Strategic leaders sit at the intersection between a company's main operations and its growth opportunities.
He or she accepts the burden of executive interests while ensuring that current working conditions remain
stable for everyone else.

This is a desirable leadership style in many companies because strategic thinking supports multiple types
of employees at once. However, leaders who operate this way can set a dangerous precedent with respect
to how many people they can support at once, and what the best direction for the company really is if
everyone is getting their way at all times.
5. Transformational Leadership
Sometimes Effective

Transformational leadership is always "transforming" and improving upon the company's conventions.
Employees might have a basic set of tasks and goals that they complete every week or month, but the
leader is constantly pushing them outside of their comfort zone.

When starting a job with this type of leader, all employees might get a list of goals to reach, as well as
deadlines for reaching them. While the goals might seem simple at first, this manager might pick up the
pace of deadlines or give you more and more challenging goals as you grow with the company.

This is a highly encouraged form of leadership among growth-minded companies because it motivates
employees to see what they're capable of. But transformational leaders can risk losing sight of everyone's
individual learning curves if direct reports don't receive the right coaching to guide them through new
responsibilities.
6. Transactional Leadership
Sometimes Effective

Transactional leaders are fairly common today. These managers reward their employees for precisely the
work they do. A marketing team that receives a scheduled bonus for helping generate a certain number of
leads by the end of the quarter is a common example of transactional leadership.

When starting a job with a transactional boss, you might receive an incentive plan that motivates you to
quickly master your regular job duties. For example, if you work in marketing, you might receive a bonus
for sending 10 marketing emails. On the other hand, a transformational leader might only offer you a
bonus if your work results in a large amount of newsletter subscriptions.

Transactional leadership helps establish roles and responsibilities for each employee, but it can also
encourage bare-minimum work if employees know how much their effort is worth all the time. This
leadership style can use incentive programs to motivate employees, but they should be consistent with the
company's goals and used in addition to unscheduled gestures of appreciation.
7. Coach-Style Leadership
Commonly Effective

Similarly to a sports team's coach, this leader focuses on identifying and nurturing the individual strengths
of each member on his or her team. They also focus on strategies that will enable their team work better
together. This style offers strong similarities to strategic and democratic leadership, but puts more
emphasis on the growth and success of individual employees.

Rather than forcing all employees to focus on similar skills and goals, this leader might build a team
where each employee has an expertise or skillset in something different. In the longrun, this leader
focuses on creating strong teams that can communicate well and embrace each other's unique skillsets in
order to get work done.

A manager with this leadership style might help employees improve on their strengths by giving them
new tasks to try, offering them guidance, or meeting to discuss constructive feedback. They might also
encourage one or more team members to expand on their strengths by learning new skills from other
teammates.
8. Bureaucratic Leadership
Rarely Effective

Bureaucratic leaders go by the books. This style of leadership might listen and consider the input of
employees -- unlike autocratic leadership -- but the leader tends to reject an employee's input if it conflicts
with company policy or past practices.

You may run into a bureaucratic leader at a larger, older, or traditional company. At these companies,
when a colleague or employee proposes a strong strategy that seems new or non-traditional, bureaucratic
leaders may reject it. Their resistance might be because the company has already been successful
with current processes and trying something new could waste time or resources if it doesn't work.

Employees under this leadership style might not feel as controlled as they would under autocratic
leadership, but there is still a lack of freedom in how much people are able to do in their roles. This can
quickly shut down innovation, and is definitely not encouraged for companies who are chasing ambitious
goals and quick growth.

Leadership Style Assessment

Leaders can carry a mix of the above leadership styles depending on their industry and the obstacles they
face. At the root of these styles, according to leadership experts Bill Torbert and David Rooke, are what
are called "action logics."

These action logics assess "how [leaders] interpret their surroundings and react when their power or
safety is challenged."

That's the idea behind a popular management survey tool called the Leadership Development Profile.
Created by professor Torbert and psychologist Susanne Cook-Greuter -- and featured in the
book, Personal and Organizational Transformations -- the survey relies on a set of 36 open-ended
sentence completion tasks to help researchers better understand how leaders develop and grow.

Below, we've outlined six action logics using open-ended sentences that help describe each one. See how
much you agree with each sentence and, at the bottom, find out which leadership style you uphold based
on the action logics you most agreed with.

1. Individualist
The individualist, according to Rooke and Tolbert, is self-aware, creative, and primarily focused on their
own actions and development as opposed to overall organizational performance. This action logic is
exceptionally driven by the desire to exceed personal goals and constantly improve their skills.

Here are some things an individualist might say:

I1. "A good leader should always trust their own intuition over established organizational processes."
I2. "It's important to be able to relate to others so I can easily communicate complex ideas to them."
I3. "I'm more comfortable with progress than sustained success."
2. Strategist

Strategists are acutely aware of the environments in which they operate. They have a deep understanding
of the structures and processes that make their businesses tick, but they're also able to consider these
frameworks critically and evaluate what could be improved.
Here are some things a strategist might say:

S1. "A good leader should always be able to build a consensus in divided groups."
S2. "It's important to help develop the organization as a whole, as well as the growth and individual
achievements of my direct reports."
S3. "Conflict is inevitable, but I'm knowledgeable enough about my team's personal and professional
relationships to handle the friction."
3. Alchemist
Rooke and Tolbert describe this charismatic action logic as the most highly evolved and effective at
managing organizational change. What distinguishes alchemists from other action logics is their unique
ability to see the big picture in everything, but also fully understand the need to take details seriously.
Under an alchemist leader, no department or employee is overlooked.

Here are some things an alchemist might say:

A1. "A good leader helps their employees reach their highest potential, and possesses the necessary
empathy and moral awareness to get there."
A2. "It's important to make a profound and positive impact on whatever I'm working on."
A3. "I have a unique ability to balance short-term needs and long-term goals."
4. Opportunist
Opportunist are guided by a certain level of mistrust of others, relying on a facade of control to keep their
employees in line. "Opportunists tend to regard their bad behavior as legitimate in the cut and thrust of an
eye-for-an-eye world," Rooke and Tolbert write.

Here are some things an opportunist might say:

O1. "A good leader should always view others as potential competition to be bested, even if it's at the
expense of their professional development."
O2. "I reserve the right to reject the input of those who question or criticize my ideas."
5. Diplomat

Unlike the opportunist, the diplomat isn't concerned with competition or assuming control over situations.
Instead, this action logic seeks to cause minimal impact on their organization by conforming to existing
norms and completing their daily tasks with as little friction as possible.

Here are some things a diplomat might say:

D1. "A good leader should always resist change since it risks causing instability among their direct
reports."
D2. "It's important to provide the 'social glue' in team situations, safely away from conflict."
D3. "I tend to thrive in more team-oriented or supporting leadership roles."
6. Expert
The expert is a pro in their given field, constantly striving to perfect their knowledge of a subject and
perform to meet their own high expectations. Rooke and Tolbert describe the expert as a talented
individual contributor and a source of knowledge for the team. But this action logic does lack something
central to many good leaders: emotional intelligence.
.
Corporate Culture

The benefits of a strong corporate culture are both intuitive and supported by social science. According to
James L. Heskett, culture “can account for 20-30% of the differential in corporate performance when
compared with ‘culturally unremarkable’ competitors.” And HBR writers have offered advice on navigating
different geographic cultures, selecting jobs based on culture, changing cultures, and offering feedback
across cultures, among other topics.

But what makes a culture? Each culture is unique and myriad factors go into creating one, but I’ve observed
at least six common components of great cultures. Isolating those elements can be the first step to building a
differentiated culture and a lasting organization.

1. Vision: A great culture starts with a vision or mission statement. These simple turns of phrase guide a
company’s values and provide it with purpose. That purpose, in turn, orients every decision employees
make. When they are deeply authentic and prominently displayed, good vision statements can even help
orient customers, suppliers, and other stakeholders. Nonprofits often excel at having compelling, simple
vision statements. The Alzheimer’s Association, for example, is dedicated to “a world without
Alzheimer’s.” And Oxfam envisions “a just world without poverty.” A vision statement is a simple but
foundational element of culture.

2. Values: A company’s values are the core of its culture. While a vision articulates a company’s purpose,
values offer a set of guidelines on the behaviors and mindsets needed to achieve that vision. McKinsey &
Company, for example, has a clearly articulated set of values that are prominently communicated to all
employees and involve the way that firm vows to serve clients, treat colleagues, and uphold professional
standards. Google’s values might be best articulated by their famous phrase, “Don’t be evil.” But they are
also enshrined in their “ten things we know to be true.” And while many companies find their values revolve
around a few simple topics (employees, clients, professionalism, etc.), the originality of those values is less
important than their authenticity.

3. Practices: Of course, values are of little importance unless they are enshrined in a company’s practices. If
an organization professes, “people are our greatest asset,” it should also be ready to invest in people in
visible ways. Wegman’s, for example, heralds values like “caring” and “respect,” promising prospects “a
job [they’ll] love.” And it follows through in its company practices, ranked by Fortune as the fifth best
company to work for. Similarly, if an organization values “flat” hierarchy, it must encourage more junior
team members to dissent in discussions without fear or negative repercussions. And whatever an
organization’s values, they must be reinforced in review criteria and promotion policies, and baked into the
operating principles of daily life in the firm.

4. People: No company can build a coherent culture without people who either share its core values or
possess the willingness and ability to embrace those values. That’s why the greatest firms in the world also
have some of the most stringent recruiting policies. According to Charles Ellis, as noted in a recent
review of his book What it Takes: Seven Secrets of Success from the World’s Greatest Professional Firms,
the best firms are “fanatical about recruiting new employees who are not just the most talented but also the
best suited to a particular corporate culture.” Ellis highlights that those firms often have 8-20 people
interview each candidate. And as an added benefit, Steven Hunt notes at Monster.com that one study found
applicants who were a cultural fit would accept a 7% lower salary, and departments with cultural alignment
had 30% less turnover. People stick with cultures they like, and bringing on the right “culture carriers”
reinforces the culture an organization already has.
5. Narrative: Marshall Ganz was once a key part of Caesar Chavez’s United Farm Workers movement and
helped structure the organizing platform for Barack Obama’s 2008 presidential campaign. Now a professor
at Harvard, one of Ganz’s core areas of research and teaching is the power of narrative. Any organization
has a unique history — a unique story. And the ability to unearth that history and craft it into a narrative is a
core element of culture creation. The elements of that narrative can be formal — like Coca-Cola, which
dedicated an enormous resource to celebrating its heritage and even has a World of Coke museum in Atlanta
— or informal, like those stories about how Steve Jobs’ early fascination with calligraphy shaped the
aesthetically oriented culture at Apple. But they are more powerful when identified, shaped, and retold as a
part of a firm’s ongoing culture.

6. Place: Why does Pixar have a huge open atrium engineering an environment where firm members run
into each other throughout the day and interact in informal, unplanned ways? Why does Mayor Michael
Bloomberg prefer his staff sit in a “bullpen” environment, rather than one of separate offices with
soundproof doors? And why do tech firms cluster in Silicon Valley and financial firms cluster in London
and New York? There are obviously numerous answers to each of these questions, but one clear answer is
that place shapes culture. Open architecture is more conducive to certain office behaviors, like collaboration.
Certain cities and countries have local cultures that may reinforce or contradict the culture a firm is trying to
create. Place — whether geography, architecture, or aesthetic design — impacts the values and behaviors of
people in a workplace.

There are other factors that influence culture. But these six components can provide a firm foundation for
shaping a new organization’s culture. And identifying and understanding them more fully in an existing
organization can be the first step to revitalizing or reshaping culture in a company looking for change.

Corporate Social Responsibility

What is strategic corporate social responsibility and how can I make it part of my organization’s strategic
plan? Corporate Social Responsibility, or CSR, is defined by Stanford University’s Graduate School of
business as the following:
Corporate Social Responsibility (CSR) is an organization’s obligation to consider the interests of their
customers, employees, shareholders, communities, and the ecology and to consider the social and
environmental consequences of their business activities. By integrating CSR into core business processes
and stakeholder management, organizations can achieve the ultimate goal of creating both social value
and corporate value.

As of late, CSR has gained noteriety as businesses have responded to two major changes in the last 5-10
years: the increase of public concern over the enviornemnt and the free flow of information afforded by
the internet.

In the last several years, movies like An Inconvienient Truth and events such as Live Aid and Earth Day
have brought climate change and protection of the Earth’s enviorment into the forefront of people’s
minds. As stakeholders in any organization’s strategic plan, the public represents shareholders, customers,
employees, suppliers- everyone. Whatever issues that the public sees as important, organizations should
take notice of. An organizstion seen as harmful to the enviornment is very likely to be seen as socially
irresponsible, and therefore risks the relationship with all of its stakeholders.

Another trend increasing the importance of CSR is the increased use of the internet to access and trade
information. Whereas in the past, the details of a company’s actions may have been restricted to
newspaper clippings from the business section or academic discussions in the classrooms of business
schools, these days any company seen being socially irresponsible may show up in mass emailings,
facebook postings or even myspace bullitens- seen by tens or even hundreds of thousands of people in a
day. Today, more than ever, companies are under the watchful eye of their stakeholders.

So what is Strategic Corporate Social Responsibility? By taking a strategic approach, companies can
determine what activities they have the resources to devote to being socially responsible and can choose
that which will strengthen their competitive advantage. By planning out CSR as part of a company’s over
all plan, organizations can ensure that profits and increasing shareholder value don’t overshadow the need
to behave ethically to their stakeholders.

 Strategic CSR provides companies with solutions for:

 Balancing the creating of economic value with that of societal value

 How to manage their stakeholder relationships (especially those with competing values)

 Identifying and responding to threats and opportunities facing their stakeholders

 Developing sustainable business practices

 Deciding the organization’s capacity for philanthropic activities

NOTE PLEASE ADD FEW EXAMPLES FOR THE SAME

Ethics in Strategy

Strategy and Ethics

Setting an organizational strategy, vision, and set of values is the starting point of any new
venture. Building in a strong sense of ethics, and an alignment with the well-being of all existing
stakeholders (and society at large) is an integral aspect of the strategic planning process. The
concept of aligning with the needs, ethics, and well-being of all stakeholders is referred to as
Stakeholder Theory.

Stakeholder Theory

All organizations have a wide variety of stakeholders. Basically any group, individual, or
organization impacted by operations is considered a stakeholder. This includes governmental
bodies, customers, suppliers, employees, shareholders, financiers, communities, economies, and
the general ecosystem. A board of directors is often elected to oversee the strategy to ensure
alignment with values and ethics.
Stakeholders: This chart underlines a few key stakeholder groups.

Ethical Integration

Building ethical considerations into a business strategy via the planning process is an important
element of ethics management. Strategy lays the foundation for how an organization carries out
its operations. Building ethics into strategic planning is important to ensure that every facet of
the organization is aligned with the ethos and values of the broader organization.

There are four elements strategic planners should develop when considering ethical alignment:

1. Developing a Code of Ethics: This serves as a central point of reference for everyone in the
organization. This code of ethics should take stakeholders concerns into consideration, and evolve
organically over time as the organization grows.
2. Ethical Training: Investing in training employees and managers in how integrate ethics into their
process is a critical aspect of developing a strong ethical culture. Training equips employees and
managers with the tools necessary to address ethically complex issues in the workplace.
3. Situational Advice (Ethics Officers): Having ethics officers available for consultation is a great
way to handle ethical issues as they arise internally. Employees and managers may encounter
ethical dilemmas that the Code of Ethics and ethics training don’t address. In these situations,
going to an ethics officer to determine best practices is a great strategic resource. The ethics officer
can also use these situations to improve the organization’s ethical strategy.
4. Confidential Reporting System: Not all ethical situations are easy to bring up in a professional
setting. As a result, organizations should create an infrastructure for anonymous reporting to allow
the organization to address problems as they arise without putting anyone on the spot.
 Building a Capable Organization

In strategy implementation, a very high priority is given to building a capable organization. Giving top
priority on this issue is justified because successful implementation of strategy depends to a great extent
on a sound organization.

And, an organization becomes sound when its employees are competent, its management structure has
matched with its requirements and it has high competitive capabilities. These are organization-building
actions concerned with effective strategy implementation.

3 Components for Building a Capable Organization are;

 Component-1: Developing competent personnel.

 Component-2: Competitive organizational capabilities.

 Component-3: Dynamic organization structure.

Component-1: Developing competent personnel

The first component of building a capable organization – competent personnel – is the first and
foremost requirement for successful strategy implementation.

Developing a strong team of competent personnel may require reshaping the staffing system in the
organization. If the existing management team is adequately capable of addressing strategic issues, then
it’s fine.

But sometimes it may be necessary to undertake developmental measures for strengthening the capability
of existing managers and even recruiting suitably qualified managers from outside the organization.
 In addition to the management team, attention also needs to be given to recruiting and retaining talented
employees. Talented employees facilitate the creation of knowledge-base essential for effective strategy
implementation.

Many large companies recruit the best available talent (imaginative and energetic people) and then retain
them by offering a more-than-expected salary and benefits package. The people with strong skill-sets
bring life to new ideas.

Component-2: Competitive organizational capabilities

The second component – competitive organizational capabilities – gives the company a competitive edge
over the competitors.

Therefore, one of the most important strategies implementing tasks of managers is to build core
competencies and competitive capabilities.

This helps the company beat competitors with superior strategy execution.

Component-3: Dynamic organization structure

The third component – dynamic organization structure – requires top managers to match organization
structure to strategy.
Thompson and Strickland prescribed that a customized organization structure is appropriate,’ that is, an
organization structure should be situation-specific. A new strategy usually entails new
competencies/capabilities arid new activities.
Consequently, it becomes a necessity for the company to make for a new internal organizational
arrangement. Although there is a need for situation-specific organization structures, there are some
common considerations in organization structures of every company.
These are:
i. identification of activities that are critical to strategic success;
ii. identifying non-critical value-chain activities which can be outsourced profitably;
iii. developing collaborative partnerships with other companies to gain’ added competitive capabilities;
iv. making strategy-critical activities the main building-blocks in creating organization structure (or structure
must be modified to fit the strategy);
v. determining the extent of centralization of authority at the top-level of the company and the degree of
authority to be decentralized throughout the organization;
vi. providing for coordination among the various departments, processes, and geographical divisions/units;
and
vii. assessing specific responsibility to specific persons to col labor ate with outsiders.
In fine, we can say that senior management must provide leadership in creating a capable organization
through developing a strategy-supportive structure: Senior managers also need to supplement the
organization structure with coordination mechanisms and establish networking arrangements to support
implementation of strategy.
Management needs to emphasize on flatter organization structures that would be more responsive to
change. Managers of the large organizations in our country may learn lessons from the emerging
organizational characteristics in some of the western industrialized countries, such as the following:
 Empowerment of managers and workers so that they can use their own judgments in their areas of work;
 Redesigning work process to ensure cohesion;
 Increased application of Internet technology in the workplace and use of e-commerce business practices;
 Teamwork through the use of self-directed teams;
 Outside networking for enhancing organizational resources and capabilities;
 The pervasive use of online systems, to overcome the barriers between different departments, divisions,
locations, and barriers with suppliers/strategic partners and customers;
 Extensive use of online systems for quick dissemination of information and response times to customers,
suppliers.

Strategy Evaluation Process

Strategy Evaluation is as significant as strategy formulation because it throws light on the efficiency and
effectiveness of the comprehensive plans in achieving the desired results. The managers can also assess
the appropriateness of the current strategy in todays dynamic world with socio-economic, political and
technological innovations. Strategic Evaluation is the final phase of strategic management.

The significance of strategy evaluation lies in its capacity to co-ordinate the task performed by
managers, groups, departments etc, through control of performance. Strategic Evaluation is
significant because of various factors such as - developing inputs for new strategic planning, the urge for
feedback, appraisal and reward, development of the strategic management process, judging the validity of
strategic choice etc.

The process of Strategy Evaluation consists of following steps-

1. Fixing benchmark of performance - While fixing the benchmark, strategists encounter

questions such as - what benchmarks to set, how to set them and how to express them. In order to
determine the benchmark performance to be set, it is essential to discover the special
requirements for performing the main task. The performance indicator that best identify and
express the special requirements might then be determined to be used for evaluation. The
organization can use both quantitative and qualitative criteria for comprehensive assessment of
performance. Quantitative criteria includes determination of net profit, ROI, earning per share,
cost of production, rate of employee turnover etc. Among the Qualitative factors are subjective
evaluation of factors such as - skills and competencies, risk taking potential, flexibility etc.
2. Measurement of performance - The standard performance is a bench mark with which the
actual performance is to be compared. The reporting and communication system help in
measuring the performance. If appropriate means are available for measuring the performance
and if the standards are set in the right manner, strategy evaluation becomes easier. But various
factors such as managers contribution are difficult to measure. Similarly divisional performance
is sometimes difficult to measure as compared to individual performance. Thus, variable
objectives must be created against which measurement of performance can be done. The
measurement must be done at right time else evaluation will not meet its purpose. For measuring
the performance, financial statements like - balance sheet, profit and loss account must be
prepared on an annual basis.
3. Analyzing Variance - While measuring the actual performance and comparing it with standard
performance there may be variances which must be analyzed. The strategists must mention the
degree of tolerance limits between which the variance between actual and standard performance
may be accepted. The positive deviation indicates a better performance but it is quite unusual
exceeding the target always. The negative deviation is an issue of concern because it indicates a
shortfall in performance. Thus in this case the strategists must discover the causes of deviation
and must take corrective action to overcome it.
4. Taking Corrective Action - Once the deviation in performance is identified, it is essential to
plan for a corrective action. If the performance is consistently less than the desired performance,
 the strategists must carry a detailed analysis of the factors responsible for such performance. If
the strategists discover that the organizational potential does not match with the performance
requirements, then the standards must be lowered. Another rare and drastic corrective action is
reformulating the strategy which requires going back to the process of strategic management,
reframing of plans according to new resource allocation trend and consequent means going to the
beginning point of strategic management process.

Even the best-laid plans can go awry—strategic planning teams know this as much as anyone. Carefully
crafted strategies may not necessarily lead you astray, but they will almost always change and evolve
during their standard three- to five-year implementation. It’s simply a fact that your internal and external
environments will change and affect your strategy as it’s being implemented. For this reason, it’s
incredibly important to create systems of evaluation and control to monitor your organization’s
performance. Establishing a control process as part of strategic management allows you to immediately
course-correct if planned strategies cause unintended or unexpected results.

What is strategic control?

Strategic control is a way to manage the execution of your strategic plan. As a management process, it’s
unique in that it’s built to handle unknowns and ambiguity as it tracks a strategy’s implementation and
subsequent results. It is primarily concerned with finding and helping you adapt to internal or external
factors that affect your strategy, whether they were initially included in your strategic planning or not.

The various components of the strategic control process generate answers to these two questions:

1. Has the strategy been implemented as planned?

2. Based on the observed results, does the strategy need to be changed or adjusted?
In many senses, strategic control is an evaluation exercise focused on ensuring the achievement of your
goals. The process bridges gaps and allows you to adapt your strategy as needed during implementation.

The difference between operational and strategic control processes.

In contrast to the large amount of data and extended time frame required for strategic controls to take
effect, operational controls monitor and evaluate day-to-day functions to correct any problems as soon as
possible. Operational controls may be either manual or automated, and can involve people, processes, and
technology. When successful, they flag potential risks, identify misalignments between plans and actions,
and effectively implement changes to stay on course with your strategy.

For example, if there are technical malfunctions or performance is below expectations, operational control
processes can initiate a course correction quickly. This could include updating an IT system or retraining
particular employees, respectively. Or, imagine a factory that produces widgets. If the number of widgets
drops below expectations or the error rate rises above expectations, a process control alert should be
triggered to make the proper operational change.

Strategic control, on the other hand, might then evaluate whether your hiring criteria and employee
onboarding processes need adjustment in order to achieve your strategy.
 Learn how to implement your strategy with this 41-page strategy execution toolkit.

Strategic Control Techniques

There are four primary types of strategic control:

Premise Control

Every organization creates a strategy based on certain assumptions, or premises. As such, premise control
is designed to continually and systematically verify whether those assumptions, which are foundational to
your strategy, are still true. These are typically environmental (e.g. economic or political shifts) or
industry-specific (e.g. new competitors) variables.

The sooner you discover a false premise, the sooner you can adjust the aspects of your strategy that it
affects. In reality, you can’t review every single strategic premise, so focus on those most likely to change
or have a major impact on your strategy.

Implementation Control

This type of control is a step-by-step assessment of implementation activities. It focuses on the

incremental actions and phases of strategic implementation, and monitors events and results as they
unfold. Is each action or project happening as planned? Are the proper resources and funds being
allocated for each step? This process continually questions the basic direction of your strategy to ensure
it’s the right one.

There are two subcategories of implementation control:

 Monitoring Strategic Thrusts Or Projects

This is the assessment of specific projects or thrusts that have been created to drive the larger strategy.
This early feedback will help you decide whether to continue onward with the strategy as is or pause to
make adjustments.

You can pre-determine which thrusts are critical to the achievement of your goals and continually assess
them. Or, you can decide which measurements are most meaningful for your thrusts or projects (such as
timeframes, costs, etc.) and use that data as an indicator of whether a thrust is on track or not, and how
that may subsequently affect the strategy.

 Reviewing Milestones
During strategic planning, you likely identified important points in the implementation process. When
these milestones are reached, your organization will reassess the strategy and its relevance. Milestones
could be based on timeframes, such as the end of a quarter, or on significant actions, such as large budget
or resource allocations.
Implementation control can also take place via operational control systems, like budgets, schedules, and
key performance indicators.

Special Alert Control

When something unexpected happens, a special alert control is mobilized. This is a reactive process,
designed to execute a fast and thorough strategy assessment in the wake of an extreme event that impacts
an organization. The event could be anything from a natural disaster or product recall to a competitor
acquisition. In some cases, a special alert control calls for the formation of a crisis team—usually
comprising members of the strategic planning and leadership teams—and in others, it merely means
activating a predetermined contingency plan.

Strategic Surveillance Control

Strategic surveillance is a broader information scan. Its purpose is to identify overlooked factors both
inside and outside the company that might impact your strategy. This process ideally covers any “ground”
that might be missed by the more focused tactics of premise and implementation control. Your
surveillance could encompass industry publications, online or social mentions, industry trends, conference
activities, etc.

This graph clearly depicts the application of the four techniques for strategic control and how they
function alongside each other:
 Source

Six Steps Of The Strategic Control Process

Whether your organization is using one or all four of the previous techniques of strategic evaluation and
control, each involves six steps:

1. Determine what to control.

What are the organization’s goals? What elements directly relate to your mission and vision? It’s
difficult, but you must prioritize what to control because you cannot monitor and assess every
minute factor that might impact your strategy.
 2. Set standards.
What will you compare performance against? How can managers evaluate past, present, and
future actions? Setting control standards—which can be quantitative or qualitative—helps
determine how you will measure your goals and evaluate progress.

3. Measure performance.
Once standards are set, the next step is to measure your performance. Measurement can then be
addressed in monthly or quarterly review meetings. What is actually happening? Are the
standards being met?

4. Compare performance.
When compared to the standards or targets, how do the actuals measure up? Competitive
benchmarking can help you determine if any gaps between targets and actuals are normal for the
industry, or are signs of an internal problem.

5. Analyze deviations.
Why was performance below standards? In this step, you’ll focus on uncovering what caused the
deviations. Did you set the right standards? Was there an internal issue, such as a resource
shortage, that could be controlled in the future? Or an external, uncontrollable factor, like an
economic collapse?

6. Decide if corrective action is needed.

Once you’ve determined why performance deviated from standards, you’ll decide what to do
about it. What actions will correct performance? Do goals need to be adjusted? Or are there
internal shifts you can make to bring performance up to par? Depending on the cause of each
deviation, you’ll either decide to take action to correct performance, revise the standard, or take
no action.

Using A Balanced Scorecard For Strategic Control

The entire strategic planning, implementation, and control process takes significant effort and thought. It
requires a lot of buy-in from your leadership team. It also requires employees to understand why their
actions are important and continuously work toward achievement of goals—even if those goals shift over
time.

A Balanced Scorecard helps tie your overall strategy to those day-to-day activities, giving more clarity
about the what and why of strategic implementation to the entire company. You’ll be able to do both
operational and strategic control within one framework, linking the two processes and getting everyone
on the same page. The Balanced Scorecard approach can provide a clear prescription as to what
companies should measure during implementation to enact strategic control.
 Conclusion

Putting strategic control in place is critical to a successful strategy implementation. Without proper
controls, your strategy won’t have the gut checks required to ensure it remains relevant, on track, and
performing at or above standards.

Managing these controls can be made easier by using software to track KPIs, measures, and the external
factors around your strategy. At ClearPoint, we see many organizations using our software to take
strategic control.

Operational control systems are designed to ensure that day-to-day actions are consistent with established
plans and objectives. It focuses on events in a recent period. Operational control systems are derived from
the requirements of the management control system. Corrective action is taken where performance does
not meet standards. This action may involve training, motivation, leadership, discipline, or termination.

Operational Control:

 Value chain analysis: Firms employ value chain analysis to identify and evaluate the competitive
potential of resources and capabilities. By studying their skills relative to those associated with
primary and support activities, firms are able to understand their cost structure, and identify their
activities through which they can create value.
 Quantitative performance measurements: Most firms prepare formal reports of quantitative
performance measurements (such as sales growth, profit growth, economic value added, ration analysis
etc.) that manager’s review at regular intervals. These measurements are generally linked to the
standards set in the first step of the control process. For example if sales growth is a target, the firm
should have a means of gathering and exporting sales data. If the firm has identified appropriate
measurements, regular review of these reports helps managers stay aware of whether the firm is doing
what it should do. In addition to there, certain qualitative bases based on intuition, judgement,
opinions, or surveys could be used to judge whether the firm’s performance is on the right track or not.
 Benchmarking: It is a process of learning how other firms do exceptionally high-quality things. Some
approaches to bench marking are simple and straightforward. For example Xerox Corporation
routinely buys copiers made by other firms and takes them apart to see how they work. This helps the
firms to stay abreast of its competitors’ improvements and changes.
 Key Factor Rating: It is based on a close examination of key factors affecting performance (financial,
marketing, operations and human resource capabilities) and assessing overall organisational capability
based on the collected information.