Creating the plan is only the beginning. What makes the difference is Strategic Implementation. According to studies, approximately 70% of companies fail to implement their strategies successfully. That is why strategy implementation has gained the nickname “The Graveyard of Strategy”.
Making Strategy Work by Lawrence Hrebiniak, a professor at the Wharton School of the University of Pennsylvania, asserts that “Implementation is more crucial than strategy creation.’’ Instead of designing a strategy and hoping it works, it should be a matter of doing so along with a reasonable plan of action.
What is Strategy Implementation?
The execution of strategic plans and initiatives, known as Strategy Implementation, serves as the crucial link connecting strategic planning to the realization of desired outcomes. This process involves actively carrying out the organizational strategies devised to attain long-term goals and objectives. It encompasses the creation, utilization, and integration of organizational structure, control systems, and culture to align with strategies that result in a competitive advantage and enhances overall performance.
Where it goes wrong
Strategy is great in theory but more often it fails to achieve its purpose. The case of Kodak serves as a poignant example of how even innovative companies with groundbreaking technologies can falter due to a failure in strategic implementation and adaptation. Founded by George Eastman in 1888, Kodak experienced a pivotal moment in 1975 when Steve Sasson created the world’s first digital camera at the company’s headquarters in New York. This 0.1-megapixel marvel, roughly the size of a toaster, marked a revolutionary advancement in photography.
Despite recognizing the significance of this breakthrough, Kodak’s strategic misstep became apparent in the subsequent years. The company invested substantial resources to mass-produce digital cameras, poised to launch their first commercial model. However, the management team abruptly halted this initiative out of fear that digital cameras might cannibalize the traditional film division, which was a lucrative source of revenue from single-use film rolls.
Even with warnings that digital technology would likely replace film within a decade, Kodak resisted change, prioritizing short-term financial key performance indicators (KPIs). This resistance to adapt to market trends left Kodak trailing behind as the photography industry shifted decisively toward digital technology. The consequence was dire – a few years later, Kodak filed for bankruptcy, underscoring the critical importance of strategic agility and a willingness to embrace innovation in the face of industry evolution.
From the Kodak story, we can get the below points on why strategy implementation fails
- Resistance to Change: Employees and stakeholders may resist changes associated with the new strategy. This resistance can manifest as reluctance to adopt new processes, technologies, or organizational structures.
- Poor Leadership: Effective leadership is crucial for strategy implementation. When leaders are indecisive, inconsistent, or lack commitment to the strategy, it can demotivate employees and hinder progress.
- Inadequate Planning: Insufficiently detailed or unrealistic strategic plans can set the organization up for failure. Plans must be actionable, with clear goals, timelines, and milestones.
- Failure to Adapt: In a rapidly changing business environment, sticking rigidly to a plan without the ability to adapt to new information or circumstances can lead to strategy implementation failure.
- Overlooking Risks: Failing to identify and address potential risks and challenges can lead to unexpected setbacks. Organizations should conduct thorough risk assessments and develop mitigation strategies.
- Short-Term Focus: Sometimes, organizations prioritize short-term gains over long-term strategic objectives. This can result in sacrificing the long-term success of the strategy for immediate results.
- Lack of Accountability: Individuals and teams who are not held accountable for their roles in strategy implementation may become complacent and lose motivation to achieve strategic goals.
How to Bridge the Gap
Bridging the gap between strategy and execution requires a holistic approach that involves people, processes, and systems. It is an ongoing effort that demands clear direction, flexibility, and a commitment to learning and improvement.
3Cs of Strategy Implementation
When implementing, it is important to note the 3Cs of Strategy Implementation as follows
Clarification of Strategy
This refers to ensuring that the strategic objectives, goals, and plans are clearly defined and easily understood by everyone in the organization. The strategy should not only be actioned by your stakeholders and executives who were presently involved in the strategy formulation. By doing so, you may lose your mid-level and frontline team members along the way.
Clarify your strategy for everyone from the C-suite to the frontline staff. This involves:
- Clearly articulating the mission, vision, and values of the organization.
- Breaking down complex strategies into actionable and understandable steps.
- Avoiding ambiguity and ensuring that there is no confusion about the strategic direction.
Communicating the Strategy
Communicating the essence of your strategy at every level of the organization is important because it helps people connect and understand the big picture. All employees should be clearly conveyed the strategic goals and objectives and ensure they know their role in achieving them. Discussions need to occur at each level, translating the organization’s strategy into understandable and contextualized sound bites, which connect to the work of individuals.
Cascading the Strategy
Cascading the strategy is a dynamic and iterative process that ensures alignment and engagement throughout the organization. It is a process of translating an organization’s high-level strategic objectives and goals into actionable plans and objectives at lower levels of the organization. This approach ensures alignment and helps employees throughout the organization understand their roles in achieving the overall strategy.
Cascading involves the managers translating the strategy to the teams using team meetings, coaching, process improvements, customer meetings, and identification of responses to the market issues that are in alignment with an organization’s strategy.
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