The Action Plan and control management process is implementation – how strategy is put into action. No matter how creative the formulated strategy the organization will not benefit if it is not skilfully implemented. In today’s competitive environment there is an increasing recognition of the need for more dynamic approaches to implementing strategies. Strategy is not a static analytical process, it requires vision, intuition and employee participation. Many organizations are abandoning central planning departments and strategy is becoming an everyday part of the job for workers at all levels. Strategy implementation involves using several tools – parts of the firm that can be adjusted to put strategy into action. Once a new strategy is selected it is implemented through changes in leadership structure, information and control systems and human resources. For strategy to be implemented successfully all aspects of the organization need to be in line with the strategy. Implementation involves regularly making difficult decisions about doing things in a way that supports rather than undermines the organization’s chosen strategy.
The primary key to successful strategy implementation is leadership. Leadership is the ability to influence people to adopt the new behaviours needed for strategy implementation. An important part of implementing strategy is building consensus. People throughout the organization must believe in the new strategy and have a strong commitment to achieving the vision and goals. Leadership means using persuasion motivating employees and shaping culture and values to support the new strategy .
Managers can make speeches to employees, build coalitions of people who support the new strategic direction, and persuade middle managers to go along with their vision for the company. At IBM, for example profiled at the beginning CEO is using leadership to get people throughout the organization aligned with the new e-business on demand strategy. He dismantled the executive committee that previously presided over strategic initiatives and replaced it with committees made up of people from all over the company who would have a voice in strategy formulation and implementation. He is investing big money to teach managers at all levels how to lead rather than control their staff. And he is talking to people all over the company, appealing to their sense of pride and getting them fired up about making IBM great once more by uniting behind the on-demand vision. With a clear sense of direction and a shared purpose, employees feel motivated, challenged and empowered to pursue new strategic goals. Another way leaders build consensus and commitment is through broad participation. When people participate in strategy formulation, implementation is easier because managers and employees already understand the reasons for the new strategy and feel more committed.
Structural design typically begins with the organization chart. It pertains to managers’ responsibilities their degree of authority and the consolidation of facilities departments and divisions. Structure also pertains to such matters as centralization versus decentralization the design of job tasks and the organization’s production technology.
In many cases, implementing a new strategy requires making changes in organizational structure, such as adding or changing positions reorganizing to teams, redesigning jobs or shifting manager’s responsibility and accountability. At IBM the entire company is being reorganized into teams that will work directly with customers and that is the only way IBM can find out what customers want and deliver it fast. In addition practically every job in the giant corporation is being redefined to support the new strategy.
A company revised task design by combining several packing positions into one job and cross training employees to operate all of the packing line’s equipment. This reduced the number of workers needed during peak times and avoided leaving some workers idle during slow periods. The structural changes cut overall plant costs and manufacturing expenses, while significantly increasing the factory’s productivity and yield thus helping to implement the new strategy.
A Retail giant has made masterful use of sophisticated information technology to support a low cost strategy by accelerating checkout, managing inventory and controlling distribution. To build up a new Boeing it is using collaborative software that lets designers, suppliers and manufacturers around the world collaborate on everything from wings to seat-back trays. Boeing hopes the new approach will revive its reputation as leader in aircraft design, as well as make the entire process more efficient helping the company compete more effectively with Airbus.
Information and Control systems include reward systems, pay incentives, budgets for allocating resources, information technology systems and the organization’s rules, policies and procedures. Changes in these systems represents major tools for putting the strategy into action. For example, managers can reassign resources from research and development to marketing of a new strategy which requires increased advertising but no product innovations. Managers and employees must also be rewarded for adhering to the new strategy and making it a success.