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Talking Strategy, With Dr Julius Tapera
THE strategy implementation process is not without its own challenges. Various studies have identified strategy-related challenges and most of these challenges have largely been regarded as relating to the strategy implementation process while other challenges relate to the other stages of the strategic planning process in general.
The challenges include lack of adequate resources, Government regulations, lack of follow through, competitive pressures, inadequate communication and feedback, lack of performance management links to outcomes, culture not ready for change, unfavourable economic conditions, confusion over goals or expectations and confliction accountabilities.
In addition to the above factors hindering effective strategy execution, environmental uncertainty, lack of effective co-ordination of strategic interventions, poorly defined implementation tasks and inadequate monitoring of implementation activities have also been identified as significant challenges to strategy implementation.
Lack of adequate resources
Ordinarily, resources are scarce and their availability is a critical challenge for strategists. The process of strategy formulation should therefore take into account acquisition/mobilisation and appropriate allocation of the requisite resources for effective strategy implementation.
A well-crafted strategy without allocation of adequate resources to implement it risks remaining a “good plan”, which is not translated into goods and services and does not effectively contribute to the achievement of organisational goals.
One of the critical aspects of strategic planning is marrying the strategic plan to the budget as the lack of adequate resources can be a hindrance to effective strategy execution. In the organisational budget, management has to allocate adequate resources required for effective strategy implementation and prioritise the timely disbursement of those resources to support the various strategic interventions that facilitate sustainable competitive advantage.
Government regulations
Governments play a critical role in creating a conducive business environment within which organisations are expected to thrive in their respective areas of enterprise.
This is achieved through policy formulation and crafting of regulations that govern enterprise in general, and other industry-specific regulations that deal with issues such as health, environmental management, competition, consumer protection, employer-employee relations and licensing.
However, in certain instances, Government regulations may prove a hindrance to successful enterprise and create challenges for effective strategy formulation and implementation. This is normally the case where there are policy inconsistencies, monopolistic and protectionist tendencies where the
Government also has business interests in certain industries or economic sectors. Other studies, however conclude that Government regulation has significant positive impact on innovation, strategy execution and organisational performance.
Lack of follow-through
Effective strategy execution requires consistent monitoring and evaluation of the implementation interventions. Organisational resources and employee actions must be synchronised and consistently channelled towards identified strategic priorities.
Firms run projects and programmes that facilitate the achievement of strategic goals and it is incumbent upon the firm’s leaders to follow through and ascertain that employees’ activities are indeed contributing towards the achievement of the firm’s goals. The monitoring and evaluation process may result in the observation of certain deviations from the strategic course and managers may recommend the institution of corrective action. The implementation of these corrective measures also requires to follow through.
Lack of follow-through thus hinders effective strategy execution as implementers do not always follow what is on the strategic plan hence the need to consistently check and ascertain that all strategic interventions are according to plan.
Competitive pressures
Michael Porter asserts that in any industry, there are generally five competitive forces that industry players have to contend with; the threat of new entrants, bargaining power of suppliers, bargaining power of buyers, rivalry among existing industry players and the threat of substitute products.
These forces create competitive pressures which strategists have to deal with in creating sustainable competitive advantage. These competitive forces have varying degrees of threat to the welfare of the organisation and as such, each organisation has the challenge to formulate and implement strategies that assist in retaining markets and continuously improving organisational performance.
Predicting competitor moves can never be achieved with much precision, leaving most organisations with the challenge of reactionary rather than pro-active strategies. Other studies have, however, found that intense competition has a significant positive influence on organisational performance as firms continuously seek to out-manoeuvre their competitors.
Inadequate communication and feedback
Good practice in organisational communication entails that there be clear channels of communication at all levels and in all directions; top-down, bottom-up and lateral communication.
In addition, there must be clear channels for feedback so that the whole communication process is seamless.
Sometimes the organisational vision, mission, values and goals are not clearly communicated to all employees, limiting the scope of employees’ participation in the whole strategic planning process.
Inadequate or inappropriate communication and lack of proper feedback during the communication process will inadvertently hinder effective strategy execution. It is, therefore, incumbent upon organisational leaders to overcome communication and feedback barriers to effective strategy execution. Some authors have recommended delayering the organisational hierarchy to flatten the organisational structure in a bid to improve communication and its contribution to strategy implementation.
Lack of performance management links to outcomes
Effective management of performance entails evaluating the extent to which individual and team efforts are contributing to the achievement of set organisational goals. Where there is no clear linkage of performance to intended outcomes, the evaluation of performance may turn out to be a futile exercise.
Some organisations have successfully linked the performance of individuals and teams to the organisational outcomes through the Balanced Scorecard, wherein outcomes are clearly categorised as financial, business processes, the customer as well as learning and growth.
Each of these four categories has specific outcomes and key performance indicators that are used to measure the extent to which interventions are contributing to the organisational outcomes. Failure to create this linkage between performance management and organisational outcomes negatively affects the effectiveness of strategy execution.
Culture not ready for change
Change is inevitable and it is incumbent upon organisational leaders to read the wave of change and enculturate change adaptation among organisational members.
Resistance to change has, however, been acknowledged as another major challenge in strategy execution as some organisational members have various reasons why they are not prepared to embrace change.
Some of these reasons include fear of the unknown, protecting one’s own turf, lack of clarity on the need for change, fear of loss of employment, lack of consultation prior to introducing change and a top-down approach to the change process. Institutional bureaucracy and excessive centralisation, which deprive implementers some autonomy, have also been identified as the other cultural factors that negatively affect the effectiveness of strategy implementation.
Organisational leaders, therefore, have to tactfully manage resistance to change and promote change adaptation among employees to facilitate the effectiveness of strategy execution.
In our next issue, we will continue looking at the other challenges that organisations encounter in their effort to effectively implement their strategies.
Dr Julius Tapera holds a PhD in Strategic Management and is the Assistant to the Vice-Chancellor at Lupane State University. He is a Strategic Management Consultant, Motivational Speaker & Author. He is contactable on Mobile: +263773586037; Email: [email protected] or [email protected]
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