gcwabaza, lungelo - conference presentation draft 5
TRANSCRIPT
The silent killers of strategy implementation in QS firms
*Gcwabaza, L. & Crafford, G.
• Introduction
• Strategy Implementation
• The Aim
• Literature Reviewed
• Methodology
• Results
• Conclusions
• Recommendations
• Questions
Presentation Overview
“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.”
- Hrebiniak and Joyce, 1984 - “Implementing Strategy”
IntroductionOpening
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 maximizing shareholder’s wealth2.
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
results in emerging markets.
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)
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
Literature Review
Why do strategic plans fail?
“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
• Impersonalized emails• 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
1Collected all implementation obstacles
2Consolidate through a process of elimination
3Categorize according to themes
45 Dimensions, with a total of 49 (variables)obstacles
5Test the market for evidence
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
1. Troubleshooting
planning
2. Flexibility and
adaptability
3. Communication
4. Buy-in
• Effective Alignment
• Effective Communication
• Priority and not an afterthought
Recommendations
Q2-7 In your personal opinion, please comment on the firms overall performance?• We perform at about 85 % of really good• The sustainability of any practice depend on the turn around time of a project from
initiation to final completion. The commercial market expect risk performance from all consultants It is very difficult at the moment. The municipalities take too long for project initiation in approving a SD-Plan and normal plan approval. These are the important pointers for a successful building environment prior construction During construction further institutional regulations apply more pressure to the construction time period The above factors will kill our industry
• Well, considering the obstacles the government has put in place in their misguided empowerment policies
• Our practice is doing well under the current economic status. The practice is only struggling to expand and venture into the private sector.
• Currently there is a scarcity of work and new appointments• Our practice is doing well under the current economic status. The practice is only
struggling to expand and venture into the private sector.• Good under difficult economic circumstances• Stronger, more diverse marketing methods required. New innovative techniques
The main barriers to strategy executionInhibiting Force References
Execution takes more time than planned (Speculand, 2009; Hrebiniak, 2008; Alexander, 1991)
Lack of communication (Hrebiniak, 2008; Hanely, 2007)
Lack of coordination (Beer & Eisentat, 2000)
Resistance from lower levels (Hanely, 2007; Okumus, 2003; Kotter, 2007)
Lack of control systems (Kaplan & Norton, 2008; Atkinson, 2006)
Execution viewed as isolated tasks (Hrebiniak, 2008; Bossidy & Charan, 2002)
Lack of resources (Muell & Shani, 2008)
Challenge of building the future while running as-is (Franken, Edwards & Lambert, 2009)
Execution decisions pushed down to lower levels (Speculand, 2009; Hrebiniak, 2008; Beer & Eisnstat, 2000)
Strategy not clear and actions not defined (Kaplan & Norton, 2008; Corboy & O’Currbui, 1999)
Rewards to incentives not aligned to strategic goals (Kaplan & Norton, 2008)
Poor leadership (Meull & Shani, 2008; Beer & Eisenstat, 2000)