Strategic implementation involves all the efforts geared towards putting into action the formulated strategy. It is one thing to decide upon a strategy and another to ensure its success.
The basic question which the process of strategy implementation seeks to provide answer to is; “what is required for us to implement our part of the overall strategic plan and how can we best get it done?”
This underscores strategy supportive matches that are needed with the organisational skills and capabilities, functional area activities, organisational structures, reward systems and incentives, policies and procedures, budgets and programs, information systems and control mechanisms.
The duty of a strategic manager becomes more complicated here as he tries to decipher the risks involved in the implementation of various strategies.
He also evaluate a given business plan from a shareholder and other stakeholders’ perspective drawing conclusions and judgments on how it can meet the business objectives in the context of its environment.
A successful strategy implementation depends on:
- Manager’s skills in resource planning and activation.
- Creation of stronger fits between strategy and the organisation structure
Working through people by motivating, monitoring, evaluating and controlling their activities in order to ensure performance deliver on objectives.
The three aspects of strategy implementation are:
- Resource Planning
- Organisation Structure
- Evaluation and Control
Organisation Resource Planning
When giving consideration to strategy implementation, the first question to ask is whether the organisation has enough and right resources to execute strategy. The three key variables that should be considered in ensuring that resources are fit to put strategy into action are:
- Financial resource capability
- Human resource competence and
- Material resource capacity
- Financial Resource Capability
The holy book says, money answers all things. The extent to which money can be used to facilitate strategy will determine how far an organisation can activate its other factors of production to deliver its objectives. The financial capability of the entity must measure up with strategy implementation.
Human Resource Competence
The management skills and competence must be in tandem with the strategy embraced by the top managers. The manpower requisition must be focused on matching managers’ competence to implement strategy.
Material Resource Capacity
Just like the other two aforementioned resources, material inventory capacity and quality must be there to deliver the expected product output standards for strategy implementation. Plant, equipment and technology employed are important factors for consideration for strategy implementation too.
Resource Development
Resource development underscores the deliberate preparation of the resources in a bid to make them suitable for the organisation environment demands. Resource development for strategy implementation is centred on the followings:
- Resource compatibility
- Resource marshalling
- Resource allocation
- Resource requirement identification
- Resource activation and
- Resource deployment.
- Resource Requirement Identification
The basic requirement here is the precise identification of what resources are required to carry out the strategy. Exactly what resources would a strategy require for its implementation? Effective planning of resource must depend on the extent to which the planner is cleared about what resources are needed.
The danger is that the resource requirement are overlooked in that it would be assumed that the resource need of the past will cope with the current strategy or the future strategy.
The requirement is for a detailed consideration of resources that is needed to put in place a strategy that makes the most sense in the implementalism. The resources that would be needed for identification include:
- Physical resources in term of plant and machinery
- Financial resources in money terms
- Human resources in manpower
- skills
- System requirement – costing system, quality and control system etc.
- Intangibles in form of goodwill image or reputation.
Resource Fit or Compatibility
After identifying the required resources for implementation of strategy, the next thing is to clarify how problematic implementation is likely to be. Since major resources changes will inevitably create a problem both of operational, logistic and probably of conflict within an organisation.
It is important to be cleared of the extent to which the existing resources can cope or would need to be changed or added to or perhaps would have to be replaced altogether. The likelihood is that some will be adequate and some redundant. This is an issue that needs to be investigated seriously.
The question here is; can the required resources be integrated with each other, what change in the existing resources would be needed and what the future resources would look like.
Fit between required resource underlying answer to the question is the assumption that the resources needed are capable of working together but the fact of the matter is that resources can interact and this interaction needs to be considered explicitly. Here, it is now necessary to plan how things would happen when resources are made to interact.
A sensible way to start is to analyse the extent of change in the existing resources need by identifying the key tasks and priorities. Key tasks are different from priorities in that:
Key tasks: These are the major areas of attention that the strategic change depends upon. It could be that management determines that the new venture would depend on the construction of an effective marketing and selling efforts no matter how good the company becomes at production.
Priorities: This has to do with the timing. Priorities are the actions that need to be tackled to get the project under way so that the design and the commissioning of the plans can take off.
The identification of key tasks and priorities also provide a basis for allocating responsibilities. Who is to be responsible for each key area and where do the key tasks interact and who is in charge in respect of co-ordination. This actually dovetails on resource marshalling.
Resource Marshalling
This is the process of sorting and appropriating adequate resources for a particular purpose. It comprises the choice of techniques, the choice of source of funds, sourcing and selection of human resources. In a nutshell, it means human and material resources generation and acquisition adequate for strategy implementation.
The quality of success of any strategy depends to a great extent, on the quantity resources marshaled into its Factors that or limit as resource marshalling includes internal or external environmental factors such as constraint, government policies and other regulations, inadequate or limited supply of human and material resources etc.
For instance, choice of a particular plant for production purposes may be limited by import restriction or government policy. Norms on debt-equity ratio may not allow for a particular source of fund.
Marshalling of critical human skills may also be limited by manpower shortage or skilled manpower availability. Resource marshalling can be measured in efficiency and effectiveness ratio.
Resource Activation
Company develops its own resources within its internal capabilities or strategic standing strength (SSS). Human resources can be activated through training and development such as on-the-job training, external training, workshops and seminars etc. Material resources can be developed through backward integration or through external supplier development effort. Financial resources can also be activated. through internal source such as ploughing back generated profit.
Resource Allocation
Resource allocation is the distribution of organisation funds and other resources among different user departments. Budget is the means by which organisation funds can be allocated. Budget according to Abhulimen Anao, is a relatively detailed plan which specifies both the responsibilities of the different organisational units for accomplishing the set goal and the relevant quantitative and financial targets against which actual performance will be measured.
A budget is a comprehensive and coordinated plan, expressed in financial terms, for the operations and allocation of enterprise resources for some specific period in order to attain organisational future goal.
Resources may be allocated based on the priorities of programs and projects the organisation is involved with. The techniques for allocating capital resources among projects include:
- Payback Period
- Accounting Rate of Return
- Internal Rate of Return
- Net Present Value
Resource Deployment
The manners in which the marshaled resources and allocated resources are utilised define resource deployment. A plan of action would provide a basis for understanding the impact of changes in the sequencing of activities.
For example, what would be the effect of a delay in one part of a project on other parts of the project? Are some areas less sensitive to delay? The plan of action would also provide a way of monitoring and controlling the development of project. It would help identify points on the project at which certain key stages must be completed.
Deployment is looking at efficient and effective utilisation of funds and other resources of the organisation after it is allocated to their various usage centres. Organisation structure is the vehicle for deployment of resources.