strategy implementation process sotiria iman kouvalis

Making Strategies Work The Process of Implementing Strategic Plans

MBA with Strategic Planning Specialism Edinburgh Business School, Heriot-Watt University, UK

Presented by Sotiria Iman Kouvalis, Mission:Focus International Strategy and Management Consultant

Copyright for content and diagrams

are attributed to

Edinburgh Business School

Heriot-Watt University

United Kingdom

Making Strategies Work

Professor Alexander Roberts

Andrew F. MacLennan

Compiled by Sotiria Iman Kouvalis, Mission:Focus

The purpose of this presentation is

to give you a ‘cheat sheet’

using checklists to ensure your

strategy implementation plan is

on the right track

in being effective.


80% of Strategic Plans Fail

Why can’t organizations

(who apparently have good strategic plans)

put their ideas into practice?

Approximately 80% of change efforts

fail to achieve their objectives.


Typical Explanations

“No one can predict change in the external environment.”

“The organization’s culture gets in the way.”


Planning vs. Implementing

Strategic Planning

what to do

(overall)

Strategy Implementation

how to do it

(day-to-day operations)


MAKING STRATEGIES WORK PROCESS Outline and Checklist


MSW Process


Mission

The highest level objective to be achieved. It must be clear as it provides guidance to those responsible for the organization’s achievement.

{

Mission

Questions to ask when identifying a mission:

• What is the purpose of the organization?

• Where are we trying to go?

• What kind of organization would we like to see in the future?

• What is the ultimate role of our function in the organization?

• If the department suddenly didn’t exist, what important things would be missing or fail to achieve in the future?


Mission

Checklist:

• Does the mission statement state the purpose, scope, strategic marketing position, customers and markets served, what it wants to achieve, timescale, competitive strategy?

• If it mentions it wants to achieve the #1 position, is it specific? No. 1 position in what? Price? Sales? Profit maximization? Market share?

• Does it define its terms it uses in the mission statement?

• Is it too ambiguous, lengthy, confusing or written by only a chosen few people?

• Is the objective beyond being realistic and achievable?


Environmental Analysis

The systematic identification of barriers and enablers to achieving the objectives. Normally classified into internal and external factors. {


Questions to ask when identifying environmental factors:

Barriers:

• What gets in the way of achieving the mission?

• Why has the organization not already achieved the mission?

• Why can the mission not be achieved immediately?

Enablers:

• What could help achieve the mission?

• What is your department particularly good at?

• How can your department help to achieve the mission?

• How can departments work together to achieve the mission?



Checklist:

• Has a comprehensive environmental analysis been done?

• Have the following tools been used: PEST, SWOT, Porter 5 Forces, Value Chain Analysis, Competitive Analysis?

• Have you prioritized the environmental factors?

• Has scenario planning and/or contingency plans been made for critical factors that have a high level or uncertainty/low level of control?

• Have both internal and external factors been considered?

• Have you avoided one-word answers like “technology” or “economy?”

• Are KEIs (Key Environmental Indicator)included?


PEST (External)

Political

Economic

Social

Technology

Note: Also consider market, competition, economic, demographic, legal factors


SWOT (Internal)

Strengths

Weaknesses

Opportunities

Threats


Porter’s 5 Forces threat of new

market entrants

threat of substitute products

bargaining power of the

firm’s suppliers

bargaining power of the firm’s buyers

existing competitive rivalry in the

industry


Strategy

A high level statement of how enablers will be utilized and the barriers overcome in order to achieve the mission. {

Strategy

Questions to ask when identifying a strategy:

• Does it start with, “We must achieve the mission by…?”

• Is it a high level statement on how the environment conditions will be overcome to achieve the mission?


Strategy

Checklist:

• Does it address the barriers and enablers of the environment?

• Does it answer the HOW and not the WHAT?

• Is the statement feasible given the environmental analysis?

• Does it leave out details for now such as budgets, processes, timescales, roles, performance indicators, structures?


Critical Success Factors (CSF)

The limited, critical, things that must go well in order for the strategy to succeed. They should follow the necessary and sufficient rules. {


Questions to ask when identifying CSFs:

• What things have to happen to achieve the strategy?

• Do we have to do this to achieve the strategy?

• If we don’t do this, can we still achieve the strategy?


Note: CSFs are milestones for managers.


Checklist:

• Do the CSFs start with, “We must…?”

• Are they action-oriented and meaningful?

• Do they include both financial and non-financial factors?

• Do they meet the “necessary rule” and “sufficient rule?”

• Are KPIs identified?

• Are the CSFs linked to the strategy?


Notes: Necessary rule = it’s a CSF only if it is critical to meeting the strategy Sufficient rule = full set of CSFs required but no more than that KPI = Key Performance Indicator

Critical Activities (CA)

The activities that must be carried out in order to achieve the CSFs. These should follow the necessary and sufficient rules. {


Questions to ask when identifying CAs:

• What activities need to be carried out to achieve the CSFs?


Note: CSFs are milestones for teams and individuals. CAs also knows as KBAs (Key Business Activities)


Checklist:

• CAs can be cross-functional or across departments

• Are CAs linked to specific CSFs?

• Are APIs (Activity Performance Indicator) identified?

• Are there both financial and non-financial measures?

• Are timescales identified for each CA?

• Are milestones devised to track progress?

• Are resources allocated and cost/project plans in place?

• Are reporting systems in place to monitor and control CAs?


Organizational Design, Processes and Systems

These should be organized in a way that facilitates the CAs. One particular system, the reward system, is worthy of close inspection. {

Organizational Design, Processes and Systems Checklist:

• Is a RACIS matrix completed?

• Are budgets taking CAs and CSFs into consideration?

• Are reward systems looked at carefully to avoid unintended effects?


RACIS Matrix


Responsibility • Approval • Consulted • Informed• Support

Reward Systems

• Bonuses below 10% tend to not be motivational enough

• Bonuses above 15% tend to lead people to move towards personal gains over achieving organizational objectives

• A good mix is between 10-15% bonus above base salary

• At least partially, bonuses should be linked to CAs or CSFs

• Reward systems should be perceived as equitable and apply across the organization, not just for senior managers

• Check to ensure that current reward systems are not producing unintended effects (notorious common error) or personal gain over the organization’s mission

• Take into consideration both intrinsic and extrinsic rewards

• Consider giving both individual and team rewards


An Extra Note About Competitive Strategy

• Competitive strategy success lies in the organization’s activities.

• Are you choosing different activities than your competitors or doing them in a different way?

• Since most organizations fail at implementing their strategies, this could be a competitive strategy itself if you implement it more effectively, quicker and at a lower cost than your competitor, making clear tradeoffs and marketing position with less unintended effects

• Identify and monitor your risks and manage change effectively


80% of Strategic Plans Fail

But you can be part of the

20% who succeed

in implementing your strategic plan.


What You Need

• A good Making Strategies Work facilitator

• Support from board and senior management

• The right people involved at the right stages

• A good project manager


strategy implementation process sotiria iman kouvalis

Documents

sotiria iman kouvalis

high level statement

strategic plans fail

critical success factors

organizational design

external factors

sufficient rules

critical activities