Strategy Implementation and Evaluation

A regional bus operator decides that most of its tickets should be sold online within two years. The decision takes one board meeting. Making it happen takes an app, new refund rules, retrained counter staff and new targets for depot managers.

Strategy implementation is the phase in which a formulated strategy is turned into concrete actions, tasks and programmes. It bridges planning and results. It is essential for growth and sustainability; when it fails, resources are wasted and the organisation drifts.

What it involves.

• Designing a structure that fits the strategy. Alfred Chandler's finding, from the history of large American firms, was that structure follows strategy.
• Allocating resources.
• Setting policies, procedures and decision processes.
• Developing and motivating people.
• Building a supportive culture and leadership.
• Setting up information and reward systems.

The McKinsey 7-S framework is a checklist for this alignment. For the bus operator, as an illustration, the structure is a small digital team and the resources are money for the app. The policies are clear online refund rules. The people are counter staff retrained to help passengers book online, and the rewards are depot targets that count online sales.

Don't treat implementation as a separate step that begins when planning ends. The two overlap. What people learn while implementing often reshapes the strategy, which is Henry Mintzberg's point about emergent strategy.

Where it breaks. Claims that 70% or 90% of strategies fail in execution are widely repeated, but they rest on weak evidence. The safer lesson is narrower: a plan without structure, money, people and rewards behind it stays on paper.

Go deeper for practitioners

Where ‘structure follows strategy’ comes from. Chandler's Strategy and Structure (1962) traced how firms such as DuPont and General Motors grew into many product lines. Their central, function-based structures could not cope, so they adopted the multidivisional form, with semi-independent divisions. The strategy changed first; the structure followed.

A decision. Six months in, the bus operator's online share has barely moved. Depot managers still earn bonuses on counter sales. Before blaming the app, check the reward system: people tend to follow what they are paid for, not what the strategy says.

Links. Modes of strategy-making and emergent strategy are in Strategy and strategic management (this unit). The 7-S framework is in Internal analysis.

A strategy is only as good as its execution.

A regional supermarket chain decides that online orders should reach a quarter of its sales in two years. A year later they are at 8%. Store managers still treat online orders as an extra chore, and nobody tracks the numbers weekly.

Poor execution leaves employees without clear objectives, misallocates resources, and weakens structure, leadership and communication. Implementation is resource-intensive, and its common pitfalls are well known.

A leading indicator moves before the result does. For the supermarket, the weekly share of orders placed online, or the share of stores meeting a delivery-time target, would warn early. Annual sales show the problem only after a year is lost.

Back to the supermarket, as an illustration. Three challenges are visible: lack of alignment (routine store work crowds out online orders), people not connected (managers gain nothing from online sales) and no measures. The remedies follow from the table: put online orders in store managers' targets, review them weekly, and staff a small team to own them.

Three forms of implementation. The work runs through three areas at once.

Don't confuse the forms of implementation with the approaches to it. The three forms are the areas the work covers: structure, leadership and functional plans. Bourgeois and Brodwin's five approaches, in the next section, are the ways a chief executive drives that work.

Where it breaks. A checklist of challenges names the symptoms but not their order of importance. Fixing communication will not help if the strategy itself is weak, so start with the first row.

For exams. Expect to match a remedy to its challenge (OKRs to poor goal-setting), and to name the three forms.

Clear goals, alignment, training, resources, communication, follow-through, measures.

The chief executive of a Chennai software services firm wants to enter cloud-security work. She can decide alone and issue orders, or let the idea grow from her engineers. Both are recognised ways to implement a strategy, with very different results.

Finer points of each.

• The change approach uses powerful behavioural tools and can push through harder strategies than the commander approach. It attends more to economic and political factors than to social ones.
• The collaborative approach, often run through brainstorming sessions, brings in the views of managers closer to operations. But a negotiated strategy may end up a compromise, and those whose views were not heeded may lose interest.
• The cultural approach extends participation to lower levels. It suits organisations, often high-growth technology firms, that can afford to build supportive values. Lower-level staff may lack the perspective to shape strategy.
• In the crescive approach (‘crescive’ means growing), goals are stated loosely at the top and refined from below. Top management shapes employees' ideas of which proposals would be supported, then acts as a judge rather than a master strategist. It considers the broadest set of factors: economic, social, political and behavioural.

Back to the software firm, as an illustration. As commander, the chief executive announces a cloud-security unit and assigns staff. With the change approach, she also gives the unit its own targets and bonuses. Collaboratively, her senior managers design the move with her. Crescively, she backs a proposal from engineers who have already won a small security contract.

Don't confuse approaches with challenges. They are sometimes listed as four ‘challenges’; they are approaches, and there are five. Nor is collaborative the same as crescive: in the collaborative approach senior managers shape strategy together; in the crescive approach ideas come up from lower-level employees.

Where it breaks. The five are ideal types. Real chief executives mix them, and the right one depends on the firm's size, the urgency of the change and the skills of its people. A crisis may need a commander; a research-led firm may get its best strategies crescively.

For exams. Know all five names in order, and the role of top management in each: it decides and instructs in the commander approach, and judges in the crescive one.

Commander, change, collaborative, cultural, crescive.

A Bengaluru maker of kitchen appliances decides to launch a new model every quarter. Its designers report to three bosses, approvals take months, and its engineers have never worked to such deadlines. The strategy changed; nothing else did.

The McKinsey 7-S model, introduced in Internal analysis, is often used to implement strategy because it shows how the parts of an organisation must change together. Its common uses:

• to facilitate organisational change;
• to implement a new strategy;
• to see how each area may change in future;
• to align departments and processes in a merger or acquisition.

The hard elements (strategy, structure, systems) are easier to identify and manage. The soft ones (shared values, style, staff, skills) are harder to manage, but they are the foundation of the organisation and more likely to give sustained advantage. All seven deserve equal attention.

Back to the appliance maker, as an illustration of step 1. Strategy: a launch every quarter. Structure: designers answer to three bosses, so decisions stall. Systems: each design needs months of sign-offs. Skills: engineers are used to one launch a year. Style: managers avoid risk. Steps 2 to 4 might give each product line one owner, cut the sign-offs to two, and train the engineers in faster development. Step 5 checks every quarter whether the fit holds.

Don't treat the hard elements as the main ones. They are easier to see and change, so plans often stop at a new structure or system. The soft elements decide whether people use them.

Where it breaks. The model shows what must fit, not how to make the change or in what order. It looks inward, so it must be paired with a view of customers and rivals.

In practice. Use the questions as a workshop agenda: ask each department to answer them, then compare the answers. Where two departments describe the same element differently, there is usually a misfit.

Find the misfits, design the fit, plan, change, keep reviewing.

A tea-café chain plans to open 50 outlets in three years, assuming office workers will keep buying tea near work. Eighteen months in, it needs to know two things: is that assumption still true, and is the plan on track?

Strategy evaluation is the last step of the strategic management process. It ensures that the strategy and its implementation still meet the organisation's objectives.

Strategic control keeps watch while the strategy runs. Textbooks name four kinds, building on the work of Georg Schreyögg and Horst Steinmann (1987):

• Premise control: are the assumptions still valid? For the café chain: are office workers still coming in?
• Implementation control: are the steps working? Are outlets opening on schedule, and are the early ones meeting their targets?
• Strategic surveillance: a broad watch for anything that may affect the strategy, such as a new rival chain or a change in rents.
• Special alert control: a rapid response to sudden, unexpected events, such as a flood that shuts the central kitchen.

The balanced scorecard (Robert Kaplan and David Norton, Harvard Business Review, 1992) links strategy to measures from four perspectives, so that financial results are not the only test.

Don't confuse strategic control with operational control. Operational control checks this month's output and costs against the budget. Strategic control asks whether the strategy itself still holds. Within strategic control, premise control checks named assumptions; surveillance is a broad, unfocused watch.

Where it breaks. Measures can be gamed: staff who are judged on serving time may rush customers. Too many measures also blur the focus, so a scorecard works best with a small number of measures in each perspective.

For exams. Know Fred David's three activities, the four kinds of strategic control, and the four scorecard perspectives with their questions.

Go deeper for practitioners

Leading and lagging measures. Financial results are lagging measures: they report what has already happened. The other three perspectives hold leading measures, which move first. If repeat visits fall this quarter, profit per outlet is likely to follow.

Strategy maps. Kaplan and Norton later drew the four perspectives as a chain of cause and effect: trained staff improve processes, better processes please customers, and pleased customers improve financial results. Drawing the chain tests whether a strategy's logic holds.

A decision. The café chain's profit per outlet is on target, but repeat visits have fallen for two quarters. The financial view says carry on; the leading measure says act now. Premise control asks why: has office attendance changed, or has a rival opened nearby?

Review the premises, measure the results, correct the course.