THE SEVEN DEADLY SINS OF STRATEGY IMPLEMENTATION (Part 1)

ACCA P3 考試：THE SEVEN DEADLY SINS OF STRATEGY IMPLEMENTATION (Part 1)

by Martin Corboy and Diarmid Corrbui 16 May 2007

CEOs and senior managers are increasingly judged on the success of their companies’ business strategies. Yet, despite the existence of complex strategy formulation processes in many organisations, many corporate strategies fail to actually get implemented. In this brief article, we describe the main pitfalls of successful strategy implementation.

Research by Prospectus Strategy Consultants has revealed that up to 70% of business strategies fail to get fully implemented. The strategy planning process in many organisations is treated with groans rather than cheers. It is seen as a chore that must be endured rather than enjoyed. In many cases, the output of the process, the business strategy fails to get implemented or is implemented in a form, which is quite different from the original intent.

Because of the weakness of over-centralised planning processes and the poor rate of strategy implementation, strategy planning as a major management tool went into decline in the 1980s and early 1990s. The focus of this period was on cost-reduction, downsizing, process re-engineering and increasing operational effectiveness.

However given recent market turbulence and a renewed focus on growth and expansion, strategy and strategic planning are now very definitely back in vogue. If companies are to learn from the inadequacies and failures of strategy planning in the past, organisations need to look at how they formulate their business strategies and, when they are developed, how they go about implementing them.

Strategy is of limited value unless it is acted upon. What can be done to improve the effectiveness of turning strategy into action? As often as not, it is usually the result of an organisations not committing one or more of the 'seven deadly sins of strategy implementation'.

DEADLY SIN ONE

THE STRATEGY IS NOT WORTH IMPLEMENTING

In too many cases, what is referred to as business strategy, is deficient in analytical rigor, creative insight, ambition or practicality. If the strategy is going to get the active support of management and staff, it needs to be specific, realistic and give the organisation something to strive for. Strategy making is often considered to be easy. It is easy if the strategy development process limits the scope of discovery, the breadth of involvement and the amount of intellectual effort expended. The strategy should not just be more of the same, incremental or comfortable. It needs to be stretching or innovative.

DEADLY SIN TWO

PEOPLE ARE NOT CLEAR HOW THE STRATEGY WILL BE IMPLEMENTED

When the strategy has been developed and evaluated, it then requires a plan to prepare the organisation for its implementation. There is always a strong desire to get started and make the strategy happen. The time spent on implementation planning is often seen as time wasting. However, there are a number of important issues that need to be addressed including:

• priorities for management;

• timescale;

• lessons learnt from previous strategy implementations;

• impact on structure and staff at all levels;

• participation; and

• risks.

DEADLY SIN THREE

CUSTOMERS AND STAFF DO NOT FULLY UNDERSTAND THE STRATEGY

There is a tendency for chief executives and senior management to communicate the business strategy on a ‘‘need to know’’ basis. If you don’t put in the effort to sell and explain the strategy, how can you hope to have it implemented? Your front-line supervisory staff must understand what the strategy is about, why it is important and how it will affect them. The strategy implementation plan should include a communications plan, which sets out who needs to be told about the strategy. The plan should not only include senior management but also middle management, supervisors, staff, customers, suppliers and other key stake holders.