• The Real Success of Strategic Management

    Corporate leaders design plans for their companies for various reasons whether it is to maintain the company’s operations and to grow the business. It can also range from the very complex to the very simple. Business planning usually happens annually either at the beginning or at the end of the fiscal year. During this time, top management convenes to deliberate on the company’s performance. They look at the available data and analyze it to see what went right and what went wrong. Ideally, they will consider both internal and external factors during the deliberation. Hence, they invest a portion of their time to do research and analysis – this is where they will anchor the strategy for the next year or so.

    While management invests time and effort crafting the plans, failure seems inevitable. Business planning has one goal – to create a long-term strategy that is profitable and sustainable. However, strategy by itself does not deliver success, execution does. When some of the people do not perform their tasks, it makes execution a challenge. Thus, the need to motivate them to actively deliver what is expected from them. Strategy execution is the door and organizational engagement is the key. In that sense, real success isn’t in attaining the production target but in learning to attain it.

    Why Business Plans Fail

    Some companies take weeks or months to finalize their business plans for the succeeding years. However, as the company starts to execute the strategy, the management might find themselves lost in terms of their deliverables. Targets are left unmet. Projects are left undone. In essence, the strategy is unfulfilled. The companies who become aware of this sooner are fortunate because they have invested less compared to those who find it later. There are several reasons why strategies fail.

    Direction. A strategy’s failure often begins with an unclear direction. At the start, everyone in the organization must be given clear guidance. This ensures that each person in the organization is pointed towards the same strategy. With a clear direction, the people are encouraged to collaborate in achieving the same goal. If the management fails to give a clear direction, the people will fall apart and would have different goals and strategies.

    Accountability. After giving the direction of the company, management should also be able to clearly state everyone’s roles and responsibilities. This makes the managers accountable to the delivery of the strategy by assigning clear scope of responsibilities among their people. When some companies fail to set the scope of responsibilities clearly, confusion arises. This leads to unmonitored tasks and unfinished activities.

    Communication. Communication channels the strategy across the company. Hence, a flaw in the communication process or platform can blemish the strategy that is being cascaded. It is common in an organization that when a message has to be forwarded from top to bottom, some details are slowly chipped off. The message then lacks details or is inaccurate when it gets to those in the lower ranks. This can potentially be misleading because the people who received the inaccurate information would act accordingly to it. This may lead people in doing tasks that are not necessary or misaligned with the strategy.

    Competence. A very complex and intricate process could have been proven effective in improving the business but what if no one in the organization is capable of executing it? The strategy should fit the organization and vice-versa. The management have the propensity to choose the most promising strategy. However, this does not mean that it is the best strategy for the company. The chosen strategy must match the competency of the people in the organization. Taking this for granted may leave the management with a very good strategy that no one can actually execute.

    These issues affects the engagement of the people in the organization. Without proper direction and clear expectations, the people end up confused in the process of strategy execution. It leads them to lose their motivation to work. Hence, solving this issue requires the management to make the people see the strategy’s value and their value as part of the strategy – the key to engagement.

    Engaging the Organization with the Strategy

    Strategy is executed by the people. The strategy will not be successful unless the organization has the ability and resources to execute it. However, the people in an organization will not always see their role in strategy execution and would not give their full efforts. Therefore, the tacit need to engage them is at the topmost priority of the management. The strategy execution problems listed above can be answered by considering the following:

    Stakeholders. The management should prioritize the stakeholders in creating a strategy. Strategy is not only an internal affair. It also takes into consideration other stakeholders such as customer, competition, suppliers, distributors, etc. These stakeholders are the key people in strategy execution, hence they must be aware of their roles and responsibilities. Apparently, letting them know of their roles and responsibilities is not enough to mobilize them. They have to be informed about the merits that they will get when the strategy has been executed properly. This goes with the rewards and recognition programs that aim to motivate the stakeholders as the people will not be engaged with the strategy unless they see something in it that benefits them.

    Know. The organization must be fully and transparently informed of the strategy to initiate direction and responsibilities. There must be reliable communication channels that will cascade the strategy from the top to the bottom of the organization. Also, this communication channel must aim to promote a common knowledge among the stakeholders. Their knowledge of the strategy must include facts such as information on what the specific tasks are, who the people responsible are, how the performance are measured, etc.

    Understand. After providing the people with the facts about the strategy, perhaps the next question to ask is why. The appreciation of the strategy lies in understanding the context of the strategy. It gives a picture of the current and the envisioned situation of the company. This gives reasons behind the strategy. As the management makes the people understand the context of the strategy, they also provide them a purpose to fulfill as they perform their jobs. This fuels their motivation as they see how their role plays in the bigger picture.

    Execute. After knowing and understanding the strategy, the people in the organization should be given the right systems and processes to execute the strategy. To be effective, the execution process must entice the people to work collaboratively. As one’s performance affects another’s, the set up will bring out a sense of accountability and responsibility. However, creating a certain process to execute the strategy may not be effective if the people are not capable or equipped to perform the process. Management needs to provide resources such as technology, trainings, etc to deliver.

    Engaging the people is about creating an organization that values the strategy. When people learn to give importance to the strategy, it fuels and mobilizes them to deliver. Thus, the management is responsible in communicating the value of the strategy and in providing the resources to enable them to deliver.

    Failing is Rewarding

    Success is not about the identification of the best strategy but the engagement of the organization. It is about how an organization is made capable to attain a certain goal. As the strategy is executed, organizational dilemmas start to surface. As mentioned, these dilemmas are result of but not limited to communication, accountability, competence, and direction. These are hindrances brought by lack of organizational engagement. The only way to overcome these is to communicate the importance and benefit of strategy both to the organization and its people.

    As an organization goes through the process of strategy execution, its capabilities and shortcomings will surface. From here, management can start to change the organization bit by bit until everything falls into place. The biggest reward in executing a strategy is an organization that is capable to adapt to change and competent in delivering strategy.

    Written by: MARVIN DE GRACIA


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    Posted on: September 21st, 2014 by READS Web Admin