gcwabaza, lungelo - conference presentation (greenovate)
TRANSCRIPT
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)
