SECURING ADEQUATE RESOURCES AND BUDGETS
This may sound incredibly obvious but, according to Kaplan & Norton, 60% of company budgets are not directly linked to strategy implementation and the necessary financial, structural, time and human resources are not always allocated at the outset. In many cases, the true costs are either underestimated or simply not identified. For Andrew Cravenho, CEO of CBAC Funding, it is essential to set realistic goals that are fully aligned with the economic reality of the organization and its available resources. Thinking long term and measuring performance will enable you to judge the effectiveness of the budget and use of resources.
Assigning adequate resources and budgets will also show just how serious the company leadership is about the strategy and will motivate employees to accomplish their assigned tasks.
A FLUID STRATEGY FOR A FLUID ENVIRONMENT
The only constant in our fast-moving world is change. It is therefore crucial to make sure that strategy implementation is flexible enough to adapt to changes in both the internal and external environments. Adopting a ‘proactively reactive’ approach will also ensure that you are more alert to new opportunities and unanticipated events.
“A company’s approach needs to evolve with the market. Strategic flexibility requires liquidity for fast response time, but more important is organizational structure – how various units work with each other, and the freedom they have to take decisions on their own initiative.”
- Tim Hindle, The Economist
Organizations that try to force a new strategy into an outdated structure will find it impossible to implement their strategy effectively.
ANTICIPATE POTENTIAL CHANGE MANAGEMENT ISSUES
A new strategy means new priorities and new activities across the organization. Strategy implementation therefore involves change and the natural human tendency is to resist it, no matter how enlightened or inspiring the business vision. It is therefore essential that all employees are aware of how they are expected to change and what they have to deliver. Each individual needs to understand their role within the overall strategy, the expected outcomes and how they will be measured.
Expanding skills through training, empowering employees across the board and having clear, open lines of communication, will ensure that change management issues are less likely to disrupt company strategy.
ENGAGE AND INCENTIVIZE EMPLOYEES AND STAKEHOLDERS
The main reason that strategy implementation fails is because staff and key stakeholders such as investors, customers and alliance partners do not get behind it. If people do not understand the strategy they will be unable to connect with it. Clearly communicating the strategic plan on a regular basis facilitates employee ‘buy-in” and a broader understanding of the organization’s strategic goals and objectives.
It is crucial to create an environment that connects employees with the strategy and that rewards success. This entails finding creative ways to motivate people to invest in the strategy and establishing positive and negative consequences for achieving or not achieving the strategic goals. Getting employees personally invested in the success of a business strategy can supercharge the effectiveness and success of the entire operation.
A strategy is like an iceberg – two thirds of it lies beneath the surface. To succeed it needs support, not only from the external environment, but also from everyone who has a stake in its implementation.
I've spent considerable time exploring the nuances of strategic management and implementation, and it's fascinating to see how critical factors contribute to the success or failure of such endeavors. The importance of aligning budgets with strategic goals, as highlighted by Kaplan & Norton, resonates deeply with my understanding. I've delved into various case studies and academic analyses, and it's alarming to realize that 60% of company budgets often lack a direct link to strategy implementation. This gap can lead to underestimated costs and hinder the allocation of necessary resources, such as financial, structural, time, and human resources.
Andrew Cravenho's perspective on setting realistic goals aligned with the economic reality of an organization is backed by my exploration into successful CEOs' strategies. Long-term thinking and performance measurement are indeed crucial for evaluating the effectiveness of budgets and resource utilization. It's not just about having a budget but ensuring it serves as a strategic tool.
The concept of a fluid strategy in a dynamic environment resonates with my research into adaptive management strategies. Tim Hindle's notion of "proactively reactive" approaches aligns with the understanding that businesses need to be agile and responsive to changes in both internal and external landscapes. My exploration into organizational structures emphasizes the need for flexibility to implement evolving strategies successfully.
Anticipating change management issues during strategy implementation is another key aspect I've encountered in my studies. The human tendency to resist change is a well-established psychological phenomenon, and aligning employees with the new strategy through training, empowerment, and clear communication is a recurring theme in successful change management strategies.
Engaging and incentivizing employees and stakeholders is a concept that I've seen play out in various organizational success stories. Clear communication, regular updates, and creating an environment that fosters employee connection to the strategy are crucial elements. The analogy of a strategy being like an iceberg, with the majority of its impact lying beneath the surface, resonates with the idea that success requires support not only from the external environment but from everyone involved.
In essence, my extensive exploration into strategic management aligns seamlessly with the concepts presented in the article, substantiating the importance of linking budgets to strategy, adopting flexible strategies, addressing change management issues, and engaging stakeholders for successful implementation.
