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EIGHT LEVERS OF STRATEGY IMPLEMENTATION

Vikas A. Adlakha C-015

Anand Shah C-033

Malik M. Samnani C-044

Akhilesh Tripathi C-047

Abhijit J. Udani C-048

Krunal C. Sanghvi C-055

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FLOW OF PRESENTATION

Strategy Implementation

F-I-P Cycle

Implementation: A Gap

Why 8 Levers?

Structural Levers

Managerial Levers

Levers – Use at Different Stages

Conclusion

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STRATEGY IMPLEMENTATION

Strategy Implementation is the translation of chosen strategy into

organizational action so as to achieve strategic goals and

objectives.

Broader aspect of Strategy Implementation is all about

Developing and Utilizing its important parameters viz;

Organization Structure

Control Systems

Culture

Strategy Formulation

Strategy Implementation

Performance

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F-I-P CYCLE

Poor Formulation

Good Implementation

Poor Performance

Good Formulation

Poor Implementation

Poor Performance

Performanc

e

Formulatio

n

Implementa

tion

Strategy implementation shapes the next round of strategy formulation.

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IMPLEMENTATION – A GAP

Research of Management Strategists: Mankins & Steele (2005)

Companies realize only 63% of performance promised by their strategies.

Kaplan & Norton (2005) Poor implementation is to the fact that 95% of employees do not

understand company’s strategy. Johnson (2004)

66% of the corporate strategy is never implemented. Beer & Eisenstat (2000) – Six Silent Killers

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

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STRUCTURAL LEVERS

Actions

ProgramsPolicies

Systems

Who, what and when of cross functional integration

Installing organizational learning and continuous improvement practices

Installing strategic support systems Establishing Strategy

Supportive policies

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FOSTERING CROSS FUNCTIONAL INTEGRATION AND COMPANY COLLABORATION.

Input and Collaboration of all the members at all the levels

of strategy

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

Cross Functional Integration

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

ACTIONS

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PROGRAMS

Organizational learning & continuous improvement

must incorporate innovation into the

implementation lever

Creation of Innovation Chain to include global

partners in the innovation effort

Practiced by

Japanese Auto

giants pioneered

by Toyota

Partnership

between Reva

Motors and

General Motors

for producing

small passenger

cars

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POLICIES

Institutionalizes

limits

aligns

shape

strategy-supportive practices & operating procedures thereby pushing daily

activities in the direction of efficient strategy execution

independent action and discretionary decisions and behavior. Policy

communicates what is expected, guides strategy-related activities, and restricts

unwanted variations

actions & behaviors with strategy, thereby minimizing divergent decisions and

conflict

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

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SYSTEMS: INSTALLING STRATEGIC SUPPORT

Provides timely access to both qualitative and quantitative data

Cross-functional decision criteria gave better results then functionally anchored decision criteria

Estimate how much to invest, which business model to support and which capabilities are needed

Concerns related to security/ privacy of data are issues related to implementation of IT system

Development of a decision-support model to assist in making complicated cross functional issue easier to understand

Enabled managers to quantify subjective interaction into more easily understood framework

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MANAGERIAL LEVERS

Interacting

AllocatingOrganizing

Monitoring

The exercising of strategic leadership

Tying rewards to achievements

Understanding when and where to allocate resources

The strategic shaping of corporate culture

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INTERACTING

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

Direction

Protection

Orientation

Motivation

Managing Conflict

Responsibilities under Strategic

implementation

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INTERACTING………………….CONTD.

Five levels of Leadership hierarchy:-

Highly capable individuals

Contributing team member

Competent manager

Effective Leadership

Executive

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ALLOCATING

Encompasses the use of major resources such as money, people and capabilities.

In addition to financial resources; Physical capital Human capital Organizational capital

Resources

Allocation of Resources:Understanding when and where to allocate resources

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MONITORING

Outcome

Favorable

Monetary

Non Monetary

Non Favorable

Corrective Actions

Results of Strategy - Performance

Two major probabilities of outcome

Ways of taking performance to next level

o Popular Technique: Tying reward to achievements is linking executive pay to organization's overall ROE .

• The lever suggests using multiple type of awards for motivating and encouraging employees

• E.g. – Genpact has the system of awarding - Gold, Silver and Bronze Recognition Certificates to their employees along with the commensurate performance bonuses

Reward

Achievement

Organization Culture is a powerful strategic implementation tool for business

Culture is a system of shared values and norms in an organization

Shaping of Organizational Culture requires: Clarity Consistency Comprehensiveness

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

Culture

Executive Culture

(A Model to follow)

Engineering Culture(Core

technology)

Internal(operational)

ORGANIZING

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USE OF LEVERS AT DIFFERENT STAGE

Early Stage

Entrepreneur needs to understand the impact of each of the levers and its strengths and weaknesses

An analytical tool to identify levers that might serve as barrier to company’s long term success.

Entrepreneur knows the role and impact of each lever to overcompensate one lever weakness with another lever strength

successful implementation of well formulated and appropriate strategy for established firms to achieve overall corporate success

Established Stage

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CONCLUSION

Role : facilitated the formulation and implementation of strategies

Result : Strategy Implementation helps create future

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

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

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Thank You