Implementing Business Strategy
Once an appropriate business strategy has been formulated an implementation plan is developed to include performance targets and measures that reflect the strategy’s objectives. This sounds reasonably straight forward but in reality, this is where many companies fail. Most businesses develop strategy plans, but many never successfully implement them.
This may be due to:
- A lack of staff motivation.
- A lack of staff cohesion (i.e. working together towards the same aim).
- A lack of direction from management.
- Resources that don’t meet projected outputs.
Successful strategy implementation comes from within the operations of a company through:
- Building a company culture and focusing on continuous improvement.
- Organisational capabilities – providing a framework for detailed day to day planning; assessing performance; ensure coherence to the strategy plan through decisions and actions taken over time. Encouraging proficiency and efficiency. Implementing policies supportive of the strategy plan.
- Leadership, supervision and motivation – implementation must involve all levels of management. Team and individual roles, responsibilities and targets within a company should be clearly identified and defined; internal support systems should be in place.
- Budgets – managers evaluate competing budget requirements within the company and direct resources to areas that support the strategy and produce results.
- Timing - producing the best results in the least possible amount of time.
- Rewards aligned to results (usually the amount a person is paid, but also job satisfaction).
Benchmarking
Benchmarking is a valuable tool that can be used to improve your business processes and performance by identifying, understanding and comparing best practice used by other organisations worldwide, inside and outside of your industry. The process is only useful if the companies you are benchmarking are known for their high performance, there is no point for example in benchmarking a low performing competitor as then your standards will reflect theirs.
When benchmarking, identify companies whose business processes are efficient, compatible and adaptable to your own business. Benchmarking implementation decisions should be regularly evaluated and reviewed to ensure that corporate, operational and individual targets are reached.
Reviewing Strategy and Strategy Management
As the business world constantly changes so do individual businesses. A strategic plan is subject to an array of external and internal influences that change the business environment. These possible changes must be considered in the formation of a plan but must also be monitored and reflected in subsequent reviews.
Considerations include:
- The market – market survival, market leadership, market positioning, expansion into broader markets.
- Economic climate.
- Political climate.
- Technological change – better and more efficient ways of doing things may develop.
- Societal shift (demographics, affluence, employment etc.).
- Environmental considerations.
- The internal aspects of the business – stability, profitability, efficiency and resources match the intent and capability of the business; effect of mergers and acquisitions. New managers come with new ideas.
Managers must therefore:
- Evaluate performance constantly.
- Make decisions that reflect current performance.
- Make adjustments as needed.
These adjustments may include:
- Changing the businesses long term direction.
- Redefining the business.
- Changing performance objectives (higher or lower).
- Adjusting the strategy.
- Improving strategy implementation.
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