NEW: Strategy formulation and implementation: everything you need to know

The Sunday Mail

Memory Nguwi

THE season of strategy reviews is upon us.

Many organizations will embark on review and strategy formulation sessions.

It’s an exciting time for those who do this process well.

Unfortunately, for many it is a worthless ritual.

The success of any organization depends on its ability to generate superior returns on the resources it employs.

To achieve this, an organization must align its resources and capabilities with the opportunities it seeks to seize.

It begins with the formulation of an effective strategy and culminates in its execution. Most organizations recognize the importance of having a well-designed strategy, but many struggle to execute it effectively.

As you embark on this journey, you must remember that 90% of business strategies are not implemented for various reasons.

It’s a frightening statistic.

Strategy execution is a critical differentiator between successful and unsuccessful organizations.

A well-executed strategy allows an organization to make the best use of its resources and capabilities to achieve its goals.

Many factors contribute to an organization’s ability to effectively execute its strategy.

This article will discuss the importance of strategy execution and the role of leadership in successfully executing a strategy.

1) Strategy can be defined as the process of choosing where to play and how to win. Strategy is about making choices and ensuring those choices are made. This includes deciding what to do and what not to do.

Most management teams struggle to make tough choices. They struggle to decide to exit specific geographic markets when evidence shows that those markets will never deliver profitable value. They find it difficult to abandon certain products or services when it is obvious that these products or services will never be profitable.

They find it difficult to kill certain companies because these companies eat value instead of creating value. These are all tough decisions you have to make when developing your strategy. Your strategy should center on where to play and how to win.

2) When it comes to executing a strategy, the ability to align the organization around a common goal is essential. Strategy execution is often a challenge for organizations.

Common challenges include lack of organizational alignment, difficulty in translating strategy into achievable goals, and inadequate performance measurement.

3) Many companies create what they call strategies when they are not strategies. The strategy should not focus on more than ten priorities. Focus on a few priorities resulting from a deep understanding of your business.

Spreading your focus and resources over too many things won’t help your business. I have seen strategy documents that span hundreds of pages. A good targeted strategy written with clarity should not exceed more than 30 pages.

Writing a thesis and calling it a strategy will discourage your managers from reading the document.

4) Who should be involved in developing your strategy? A good strategy should be consultative. Depending on the nature of your business, you may need to consult with your employees, customers and other stakeholders (pre-strategy formulation work) before going to a strategy formulation retreat.

The value of consultation is immeasurable. Employees are likely to support a strategy that they have contributed to its formulation. Either way, employees are the key to your business.

They know what works and what doesn’t. They know what customers complain about every day. They know what’s wrong with the plant.

If you give them the opportunity, they will tell you what they think should be done to solve some of the problems. You can use processes to leverage input from key stakeholders as you prepare for your strategy formulation session.

5) I’ve noticed that many leaders get distracted by focusing on which model to use to build business strategy. Don’t worry about patterns and instead focus on strategy development.

I usually use a combination of the balanced scorecard and the blue ocean strategy. Simplicity matters whichever model you choose. Whatever the model, the strategy must be clear, so that your lowest employees can understand it without further interpretation.

6) Once the business strategy has been developed, unfortunately, that’s where it stops. People meet again after 12 months to review a strategy they never implemented.

They still waste time coming up with another strategy, which is the same strategy with new dates. What a tragedy and what a waste of resources. Companies need to put in place a strategy execution mechanism to win.

First, the strategy must be articulated to all stakeholders so that you get their buy-in. Corporate strategy should trickle down to every department and individual in the organization.

The cascade process should ensure alignment of goals and targets across the organization. The cascading process should ultimately culminate in individual goals and targets. Others convert them into performance contracts.

seven) You need to hold people accountable for achieving your strategic goals and initiatives. Reward those who perform and censor those who don’t deliver. If there are no consequences for non-delivery or delivery, people won’t care.

8) Execution transforms strategic plans into actions to achieve strategic objectives and goals. It involves coordinating and mobilizing resources to implement plans and achieve desired results.

To be successful, execution must be aligned with strategy. This means that the organization’s resources and capabilities must be aligned with the opportunities it seeks to seize.

9) A well-designed strategy relies on a thorough understanding of the organization’s strengths and weaknesses as well as the opportunities and threats it faces.

Strategy should be designed to exploit the strengths of the organization and minimize weaknesses, while taking advantage of opportunities and avoiding or mitigating threats. For a strategy to be effective, it must be executed successfully.

ten) Strategy execution is a process that can deliver the intended results and realize the expected value of an organization’s strategic plan. Many organizations struggle to effectively execute their strategy. Several challenges can complicate strategy execution, including inadequate planning, unrealistic assumptions, ambiguous or competing priorities, and inadequate resources.

Organizations can take specific actions at each stage of strategy execution to overcome these challenges.

11) Strategy execution challenges come in many forms. Decisions made in the past may no longer be effective, new competitors may have entered the market, or technology may have changed the rules of the game.

Regardless of the source of the challenge, organizations must have a process in place to respond to those challenges.

Even a great strategy can fail if not executed well. Strategy execution is a dynamic process that constantly evolves in response to changes in the external environment and internal capabilities of the organization.

Strategy execution follows a disciplined process that begins with the right culture. The right culture is built on trust, transparency and accountability.

Each of these elements is critical to successful strategy execution. Organizations with a disciplined approach to strategy execution are more likely to deliver key initiatives on time and within budget.

The execution of a strategy requires the coordination of resources and activities at all levels of an organization.

*Memory Nguwi is an Occupational Psychologist, Data Scientist, Speaker and Management Consultant – Industrial Psychology Consultants (Pvt) Ltd, a management and human resources consultancy firm.[email protected] or visit our websites https://www.thehumancapitalhub.com/ and www.ipcconsultants.com

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