1. 1
Strategy Implementation
 What must we do to put the strategy in
place, execute it proficiently, and
produce good results?
 Creating FITS between strategy and
external environment and creating FITS
inside the organization
 Control, coordination, and motivation
issues

2. 2
Building a
Capable
Organization
Allocating
Resources
Establishing Strategy-
Supportive Policies
Instituting Best
Practices for
Continuous
Improvement
Installing
Support
SystemsTying Rewards
to Achievement
of Key Strategic Targets
Exercising
Strategic
Leadership
Shaping Corporate
Culture to Fit
Strategy
Strategy
Implementer’s
Action Agenda
Figure 11.1: The Eight Components
of the Strategy Execution Process

3. 3
Figure 11.2: The Three Components of
Building a Capable Organization
Staffing the Organization
A Company with
the
Competencies
and Capabilities
Needed for
Proficient
Strategy
Execution
Building Core Competencies and
Competitive Capabilities
Matching the Organization
Structure to Strategy

4. 4
ALLOCATINGALLOCATING
RESOURCES TORESOURCES TO
SUPPORT STRATEGYSUPPORT STRATEGY
IMPLEMENTATIONIMPLEMENTATION

5. 5
Allocating Resources to
Support Strategy Execution
 Resource allocation should fit strategy
 Changing strategy requires changes to resource
allocation process
 Shifting resources — downsizing some areas,
upsizing others, getting rid of activities no longer
needed, and funding new strategically critical
activities
 Financial and other resources (physical and
human assets)

6. 6
CREATING STRATEGY-CREATING STRATEGY-
SUPPORTIVE POLICIES ANDSUPPORTIVE POLICIES AND
PROCEDURESPROCEDURES

7. 7
Fig. 12.1: How Prescribed Policies and
Procedures Facilitate Strategy Execution

8. 8
INSTITUTING BEST PRACTICESINSTITUTING BEST PRACTICES
AND CONTINUOUS IMPROVEMENTAND CONTINUOUS IMPROVEMENT

9. 9
Instituting Best Practices
and Continuous Improvement
 Searching out and adopting best practices
is integral to effective implementation
 Benchmarking is the backbone of the
process of identifying, studying, and
implementing best practices
 Key tools to promote continuous improvement
 Business process reengineering
 TQM
 Six Sigma quality control

10. 10
INSTALLING STRATEGY-INSTALLING STRATEGY-
SUPPORTIVESUPPORTIVE
INFORMATION ANDINFORMATION AND
OPERATING SYSTEMSOPERATING SYSTEMS

11. 11
Installing Strategy-Supportive
Information and Operating Systems
 Good information and operating systems are
essential for first-rate strategy execution
 Support systems can relate to all value-chain
activities
 Includes all type of Computer Based Information
Systems (CBISs):
 MIS, DBMS, TPS, DSS, E-commerce and e-
business systems, CRM, SCM, etc…
 Mobilizing information and creating systems
to use knowledge effectively can yield
 Competitive advantage

12. 12
TYING REWARDS ANDTYING REWARDS AND
INCENTIVES TO GOODINCENTIVES TO GOOD
STRATEGY IMPLEMENTATIONSTRATEGY IMPLEMENTATION

13. 13
 Challenge – Behavioral Control
 How to ensure actions of employees
stay within acceptable bounds
 Control approaches
 Managerial control
Establish boundaries on what not to
do, allowing freedom to act with limits
Track and review daily operating
performance
 Peer-based control
Exercising Adequate Control
Over Empowered Employees

14. 14
Monetary IncentivesMonetary Incentives
 Base pay increases
 Performance bonuses
 Profit sharing plans
 Stock options
 Retirement packages
 Piecework incentives
Non-monetary IncentivesNon-monetary Incentives
 Praise
 Constructive criticism
 Special recognition
 More, or less, job security
 Stimulating assignments
 More, or less, autonomy
 Rapid promotion
Gaining Commitment: Components
of an Effective Reward System

15. 15
 Rewards are the single most powerful tool to
win the commitment of company personnel to
effective strategy implementation
 Objectives in designing the reward system
 Generously reward those achieving objectives
 Deny rewards to those who don’t
 Tie incentive compensation to relevant
outcomes - both strategic and financial
Linking the Reward System
to Performance Outcomes

16. 16
BUILDING A STRATEGY-BUILDING A STRATEGY-
SUPPORTIVE CORPORATESUPPORTIVE CORPORATE
CULTURECULTURE

17. 17
Defining Characteristics
of Corporate Culture
 Core values, beliefs, and business principles
 Ethical standards
 Operating practices and behaviors defining
“how we do things around here”
 Approach to people management
 “Chemistry” and “personality” permeating
work environment
 Often told stories illustrating
 Company’s values
 Business practices
 Traditions

18. 18
A company’s culture is manifested in . . .
 Values, business principles, and ethical standards
preached and practiced by management
 Approaches to people management and problem solving
 Official policies and procedures
 Spirit and character permeating work environment
 Interactions and relationships among managers and
employees
 Peer pressures that exist to display core values
 Its revered traditions and often repeated stories
 Its relationships with external stakeholders
Identifying the Key Features
of Corporate Culture

19. 19
Why is Culture Important?
 Matching culture to strategy will improve
performance
 A culture that promotes attitudes and behaviors that are
well-suited to strategy is a valuable ally in the strategy
implementation process
 Can hinder strategy implementation and
performance if not compatible with strategy
 A culture where attitudes and behaviors impede good
strategy implementation is a huge obstacle to overcome
 Provides another means to control, coordinate, and
motivate employees

20. 20
 A culture based on ethical principles is vital to
long-term strategic success
 Ethics programs help make ethical conduct a way
of life
 Executives must provide genuine support of
personnel displaying ethical standards in
conducting the company’s business
 Value statements serve as a cornerstone for
culture-building
 Can be used to control employees – to behave in
the “right” way
Grounding the Culture in
Core Values and Ethics