Session 1 – Introduction
From creation to implementation
Need to align the following for implementation:
- People
- Culture
- Leadership
- Supporting activities
- Structure
- Incentives
From Strategy to Implementation: Seeking Alignment. Pocket mentor series. (Access: HBS
customized digital book).
Implementation: describes the concrete measures that translate strategic intent into actions that
produce results
- Requires contunuous managerial attention at all levels
- Absolutely essential and capable of providing enormous rewards
- Operations-oriented
Strategy creation:
- Entrepreneurial and market-oriented
,Two very different activities:
Strategy creation Implementation
Analysis and planning Execution
Thinking Doing
Initiate Follow through
At the top Top-to-bottom
Entrepreneurial Operational
Goal-setting Goal-achieving
Strategy in the absence of effective implementation is pointless
Some say strategy is a commodity as it can be replicated by rivals
Alignment: for a business, a situation in which organizational structures, support systems,
processes, human skills, resources, and incentives support strategic goals.
- Any successful strategy must be formed around a coherent and reinforcing set of
supporting practices and structures (alignment).
Four elements of alignment (according to George Labovitz and Victor Rosansky):
- Strategy
- Processes
- People (employees)
- Customers
When the four elements of alignment are simultaneously connected, each element is
supported and strengthened by the others and great things happen.
The Seven S Framework:
- Strategy, Structure, Systems, Style, Staff, Skills, and Superordinate goals
Elements of strategy alignment:
- People
- Incentives
- Supportive activities
- Organizatiobal structure
- Culture
- Leadership
People & Incentives
Roles:
- Senior management responsible for communicating strategic intent to employees
- Mid- and lower-level managers must reiterate that intent and translate it into the way their
subordinates work
- Management also must ensure that the company has:
o People with the right skills to make the strategy successful
o People with attitudes that support the strategy
o The resources that people need to do their jobs well
,Incentives are another big part of the people side of implementation, perhaps the most important
- Unless employees have real incentives to implement the strategy, they will not commit to
it, and the strategy will probably fail
The best assurance of implementation is a reward system that aligns employees’ interests with
the success of the strategy
- Every unit and employee should have measurable performance goals with clearly stated
rewards for goals achievement
- Rewards should be large enough to elicit the desired level of employee effort
The Say-Do Problem
Misalignment between incentives and strategy is often result of the say-do problem: a company
says one thing but does another. Incentive mechanisms fail to support explicit company
strategies and goals.
Supportive Activities
Success is more likely when many seemingly unrelated activities reinforce each other and the
overall strategy
Organizational Structure
Necessary to eorganize people and resources in support of a new strategy. Organizational
strucure has to follow stratgey to be successful
Culture & Leadership
Must be supportive of both the strategy and the day-to-day work that implements it
Culture: refers to a company’s values, traditions, and operating style. Describes how people view
their workplace and how things are done.
- Difficult to measure but sets the tone for managerial and employee behavior
To understand company culture ask:
- Who are the company’s heroes, and what stories do people tell about them?
Cultures can be strong or weak:
- Strong: difficult to change without great effort, time, and substantial disruption
o Wise to adopt strategies consistent with their cultures, otherwise creates
implementation problems
Changing company culture to better align with a new strategy is the responsibility of the CEO
and senior management, top-down job. Few approaches:
- Concentrate on aspects of culture that must change and leave less critical aspects alone
- Model the behaviors and values that you’d like employees to adopt
- Build consensus and commitment to change via ‘town meeting’ forums, a personal
connection between the leadership and rand-and-file employees is essential
- Sponsor celebratory events when change milestones are met, reward employees
- Set high performance standards
, How well aligned is your company with its chosen strategy?
Mankins, M. C., & Steele, R. (2005). Turning great strategy into great performance. Harvard
Business Review, 83(7), 64–72.
On average only 63% of companies deliver the financial performance their strategies promise.
- Causes of this strategy-to-performance gap are invisible to top-management
Leaders pull wrong levers: better execution when there is need for better strategy and
vice versa.
Results in wasted energy, time, and contunued underperformance
Research also shows a select group of high-performing companies managing to close the
strategy-to-performance gap through better planning and execution. They do this by:
- Developing realistic plans that are solidly grounded in the underlying economics of their
markets and then used to drive execution
- Curating disciplined planning and execution processes to make it far less likely to face
shortfall in actual performance
o In the case they do fall short, these processes enable them to discern the cause
quickly and take corrective action
From creation to implementation
Need to align the following for implementation:
- People
- Culture
- Leadership
- Supporting activities
- Structure
- Incentives
From Strategy to Implementation: Seeking Alignment. Pocket mentor series. (Access: HBS
customized digital book).
Implementation: describes the concrete measures that translate strategic intent into actions that
produce results
- Requires contunuous managerial attention at all levels
- Absolutely essential and capable of providing enormous rewards
- Operations-oriented
Strategy creation:
- Entrepreneurial and market-oriented
,Two very different activities:
Strategy creation Implementation
Analysis and planning Execution
Thinking Doing
Initiate Follow through
At the top Top-to-bottom
Entrepreneurial Operational
Goal-setting Goal-achieving
Strategy in the absence of effective implementation is pointless
Some say strategy is a commodity as it can be replicated by rivals
Alignment: for a business, a situation in which organizational structures, support systems,
processes, human skills, resources, and incentives support strategic goals.
- Any successful strategy must be formed around a coherent and reinforcing set of
supporting practices and structures (alignment).
Four elements of alignment (according to George Labovitz and Victor Rosansky):
- Strategy
- Processes
- People (employees)
- Customers
When the four elements of alignment are simultaneously connected, each element is
supported and strengthened by the others and great things happen.
The Seven S Framework:
- Strategy, Structure, Systems, Style, Staff, Skills, and Superordinate goals
Elements of strategy alignment:
- People
- Incentives
- Supportive activities
- Organizatiobal structure
- Culture
- Leadership
People & Incentives
Roles:
- Senior management responsible for communicating strategic intent to employees
- Mid- and lower-level managers must reiterate that intent and translate it into the way their
subordinates work
- Management also must ensure that the company has:
o People with the right skills to make the strategy successful
o People with attitudes that support the strategy
o The resources that people need to do their jobs well
,Incentives are another big part of the people side of implementation, perhaps the most important
- Unless employees have real incentives to implement the strategy, they will not commit to
it, and the strategy will probably fail
The best assurance of implementation is a reward system that aligns employees’ interests with
the success of the strategy
- Every unit and employee should have measurable performance goals with clearly stated
rewards for goals achievement
- Rewards should be large enough to elicit the desired level of employee effort
The Say-Do Problem
Misalignment between incentives and strategy is often result of the say-do problem: a company
says one thing but does another. Incentive mechanisms fail to support explicit company
strategies and goals.
Supportive Activities
Success is more likely when many seemingly unrelated activities reinforce each other and the
overall strategy
Organizational Structure
Necessary to eorganize people and resources in support of a new strategy. Organizational
strucure has to follow stratgey to be successful
Culture & Leadership
Must be supportive of both the strategy and the day-to-day work that implements it
Culture: refers to a company’s values, traditions, and operating style. Describes how people view
their workplace and how things are done.
- Difficult to measure but sets the tone for managerial and employee behavior
To understand company culture ask:
- Who are the company’s heroes, and what stories do people tell about them?
Cultures can be strong or weak:
- Strong: difficult to change without great effort, time, and substantial disruption
o Wise to adopt strategies consistent with their cultures, otherwise creates
implementation problems
Changing company culture to better align with a new strategy is the responsibility of the CEO
and senior management, top-down job. Few approaches:
- Concentrate on aspects of culture that must change and leave less critical aspects alone
- Model the behaviors and values that you’d like employees to adopt
- Build consensus and commitment to change via ‘town meeting’ forums, a personal
connection between the leadership and rand-and-file employees is essential
- Sponsor celebratory events when change milestones are met, reward employees
- Set high performance standards
, How well aligned is your company with its chosen strategy?
Mankins, M. C., & Steele, R. (2005). Turning great strategy into great performance. Harvard
Business Review, 83(7), 64–72.
On average only 63% of companies deliver the financial performance their strategies promise.
- Causes of this strategy-to-performance gap are invisible to top-management
Leaders pull wrong levers: better execution when there is need for better strategy and
vice versa.
Results in wasted energy, time, and contunued underperformance
Research also shows a select group of high-performing companies managing to close the
strategy-to-performance gap through better planning and execution. They do this by:
- Developing realistic plans that are solidly grounded in the underlying economics of their
markets and then used to drive execution
- Curating disciplined planning and execution processes to make it far less likely to face
shortfall in actual performance
o In the case they do fall short, these processes enable them to discern the cause
quickly and take corrective action
