gcwabaza, lungelo - conference presentation (greenovate)

The silent killers of strategy implementation in QS firms

Lungelo Gcwabaza

“Corporate sustainability is a business approach that creates long-term consumer and employee

value by creating a “green strategy” aimed toward the natural environment and taking into

consideration every dimension of how a business operates in the social, cultural, and economic

environment”.

IntroductionOpening

– William Clay Ford Jr. Executive Chairman, Ford Motor Company.

IntroductionOpening

Corporate sustainability is based on two guiding principles:

1. Sustainable business practices are critical to the creation of long-term shareholder value in an increasingly resource-constrained world;

2. Sustainability factors represent opportunities and risks that competitive companies must address.

IntroductionOpening

Why is this import?

Because;

“Creating sustainable business performance

through strategy implementation”

“Simply knowing what to do is not enough; in the final analysis, success is judged in terms of actual rather than intended results. Choice and action determine actual results, and each is incomplete

without the other.”

IntroductionOpening

Hrebiniak and Joyce, 1984 - “Implementing Strategy”

Competitive

Complex

Effectiveness

Efficiency

Productivity

Growth

Sustainability

The Business Landscape

IntroductionOpening

On average, companies deliver 63% of the financial

performance on their strategy promised. – Harvard Business

Review.

57% of firms failed to execute strategic initiatives over the

past three years. – An Economist Survey.

Just 3% of executives believe their companies are

successful at execution. - An AMA Survey.

80% of C-level executives believe the ability to successfully

execute is nearly impossible to achieve. – Get it Done! A blueprint

for Business Execution

IntroductionOpening

"It is not sufficient to formulate brilliant strategies. To affect performance, strategies must be implemented.

Managers can orchestrate many organizational variables to implement strategies.

They must change financial resources, organizational structures, administrative and information systems, corporate

culture, organizational skills and staff, and performance evaluation and reward systems“

-Shrivastava, 1994: 156.

Introduction

Business Related Studies

Construction Industry Studies

Quantity Surveying

Profession?

IntroductionCurrent Research

IntroductionResolution

For the average business, a 35% improvement in the quality of strategy implementation was directly

associated with a 30% increase in shareholder value1.

Effective and conscience implementation of strategy can lead to creating and maintained competitive advantage in

addition to elevating sustainable business performance2.

1. Becker et al. (2001:213)2. Hrebiniak (2005:6)

The purpose of this research is to investigate the critical impeders of effective strategy

execution that quantity surveying firms must overcome to realize strategic objectives in

the South African context.

The Aim

Overview• Definition of strategy

• Key drivers of strategy

• Why Strategic plans fail?

• Barriers to implementation

• Consequences of failure

Literature Review

Literature Review

Definition of Strategy Implementation

The strategy implementation stage involves converting strategic alternatives into an operational plan1

Strategy implementation is the process that turns plans into action assignments and ensures that such assignments

are executed in a manner that accomplishes the plan’s stated objectives2

1. Aaker (1988)2. Kotler (1984)

Literature Review

Describes change

+

Reflects obligations

How?Why?What?

Literature Review

Alignment: “WHAT”• Includes how well employees understand the

company strategy, realize why it is critical to success and recognize the actions required to make it a reality.

Mindset: “WHY”• The level of emotional commitment to the strategy and

encompasses the belief that the strategy is right, passion that it will make a difference and an urgency to make it happen.

Capability: “HOW”• Refers to the essential skills required within the

organization to effectively execute strategic initiatives. Skills include business acumen and decision-making, leadership and management and sales capabilities.

Literature Review

Why do strategic plans fail?

Literature Review

Literature Review

“Where they struggled was in converting awareness into action. The necessary knowledge about what to do existed, but the company lacked the capacity to move on it in a decisive and committed way.”

- From “Tracking the enemies of agility” - Julian Birkinshaw (2013)

Barriers to implementation1. Insufficient capabilities of

employees2. Ineffective coordination of

implementation activities3. Lack of commitment 4. Lack of leadership and

discretion of middle managers

5. Deviation from original objectives

6. Lack of confidence about success

Literature Review

Consequences of Failureₓ Goals have not been reachedₓ Unattained desired revenuesₓ Failed new market penetrationₓ Energy and resources were wastedₓ Skepticism and resistance towards new strategies

Literature Review

Methodology

• Study Design

• Population and Sampling

Technique

• Questionnaire

Administration

• Data Analysis

• Results

Overview

This study builds on previous quantitative research on strategy within the realm of quantity surveying within the construction industry.

The quantitative research method was pursued because the populace of study was spread all over South Africa; and due to geographical dispersion, a qualitative approach was not feasible.

Methodology

Study Design

• The population of relevance:• Directors of QS firms registered on the ASAQS

Websites • Any other upper/ senior managerial positions

• A population of 741 registered firms was derived from the ASAQS online directory.

• Selection criteria = accessibility to test subjects.• 50% of the population = 371 directors in SA,

altogether.

Methodology

(Continued)Population

• Online web-survey to registered QSs also made available on the ASAQS website

• Two reminder emails in the second and fourth week

Methodology

(Continued)Questionnaire Administration

Methodology

(Continued)• Microsoft excel.• Frequency distribution, descriptive statistics• Interpretation shall be based on the mean and

standard deviation score• 7-point evidence Likert scale was used

Data Analysis

5Test the market for evidence

45 Dimensions, with a total of 49 (variables) obstacles

3Categorize according to themes

2Consolidate through a process of elimination

1Collected all implementation obstacles

Methodology

(Continued)

1• Environmental obstacles

2• Obstacles related to the consequences of

planning

3• Organizational obstacles

4• Management obstacles

5• Individual (personnel) obstacles

Results

1• Environmental obstacles

ResultsCont.

Rank Variables Mean Std. Dev Mode 1 Economic obstacles

(inflation, down turn of the market, etc.)

3.66 2.06 2

3 Political obstacles and changes

3.61 2.17 3

3 State laws and regulations related to company activities.

3.61 2.23 5

Correlates with previous research Ali & Hadi, 2012

2

• Obstacles related to the consequences of planning

ResultsCont.

Correspond with previous research Al-Ghamdi, 2015

Rank Variables Mean Std. Dev Mode 1 Inadequate and improper use of

consultants and professionals of strategy developing

3.02 1.92 3

3 Lack of conversion of appropriate strategic plans into business plans and short-term operational objectives and the distribution of these goals between different sectors.

3.00 1.81 3

3 Inadequate identification of company's major problems and lack of focusing on them in strategic planning process

3.00 1.89 2

3• Organizational obstacles

ResultsCont.

These results agree with Pateman, 2008

Rank Variables Mean Std. Dev Mode 1 Lack of consistency and

alignment between organizational structure and developed strategies.

3.05 1.85 2

3 Lack of proper communication between individuals, departments and units of the organization.

3.00 1.90 3

3 Inadequate control systems and performance measurement and feedback.

3.00 1.79 3

4• Management obstacle

ResultsCont.

These results agree with Pateman, 2008

Rank Variables Mean Std. Dev Mode 1 Inadequate commitment of

managers to the organization and its strategic plans.

2.98 1.92 2

3 Inadequate understanding of managers and employees of company strategies and future prospects.

2.85 1.86 1

3 Inadequate protection and consideration of company's managers and other beneficiaries to implementing the business strategies.

2.85 1.75 2

5• Individual (Personnel) obstacles

ResultsCont.

These results agree with Lawrie, 2014

Rank Variables Mean Std. Dev Mode 1 People's inadequate

understanding of their company business strategies.

2.95 1.81 4

2 Employees fear of endangerment of their job security

2.93 1.96 2

3 Low capacity and capability of staff in line with the objectives and tasks.

2.85 1.96 1

Conclusions

Prominent obstacles to implementation

1. Environmental obstacles

2. Obstacles related to the consequences of

planning

3. Organizational obstacles

Conclusions

Compounding themes:

•Inconsistency In formulation

•Lack of managerial commitment

•Ineffective communication

Conclusions

Research critique:

• Further study into effectiveness of

implementation efforts & Frameworks used

Recommendations

Identify

Inform

Involve

Incentivize

Recommendations

“Forward thinking companies that execute successful business strategy will enable the company to gain, as efficiently as possible, a sustainable edge over its competitors. They and their management teams make things happen ahead of their competitors”

– Michael Meacher, Environment Minister (Addressing ENVEC, October 2002)

• Mr. Lungelo Gcwabaza• lungelogcwabaza@gmail.com• 078-069-7754

Thank You

ANY

QUESTIONS