Chapter 12- Implementing Strategy


Terms in this set (...)

1. forging alignment b/w key elements of organization and its strategy
2. leading effective change to accomplish alignment
3. creating measurement systems to refine the strategy and ensure its implementation
3 skills strategists must posses if they want to implement stategies
what implementation is about at one level
for this to be successfully done with a strategy, it requires a process that translates broad strategic objectives into clearly definable, everyday actions
1. external environment
2. strategy
3. internal elements
what 3 things must be aligned for effective implementation
a condition where the important elements of an organization are in proper relationship with each other, they fit well together and reinforce each other. when this is present in the an organization, all elements support the strategy
along with execution, is equally a matter of implementation
7s model
introduced by consultants at McKinsey and Company, provides a broad yet succinct way to capture the key strategic elements of an organization
1. strategy
2. structure
3. systems
4. staffing
5. skills
6. style
7. shared values
the 7 important organizational elements that must be aligned to ensure effective implementation of firm's strategy
the plan, process and related activities that create and sustain a competitive advantage for a firm in its target markets
enables a firm to perform well by guiding resource allocation decisions that result in competitive advantage
set of organizational arrangements that divides labor and takes within the organization into separate units and defines the reporting or authority form of firms by doing so. answers: who does what? who reports to whom?
organization chart
helps understand organization's structure
1. regional structure
2. functional structure
3. matrix structure
4. M-form corporation
4 common types of organizational structures
matrix structure
organizational structure where:
firms give significant decision making authority, and responsibility for profits and losses to two managers. most common shares responsibility between functional (departmental) manager and product managers
matrix structure
organizational structure where:
it is built on assumption that both strong functional expertise and nuanced product knowledge play vital roles in creating competitive advantage
matrix structure
organizational structure that:
makes life more complicated for managers and employees but hopes to create more value by combining expertise in decision making
organizational structure that:
is a corporate level structure. builds on idea of a corporate parent and business unit children. stands for multidivisional form
organizational structure where:
each division is a separate business and includes all the functions needed to run that business. managers for these organizations can structure their business units in different ways (functional, product, matrix, etc.). creates redundancy in corporation but puts all accountability on individual managers
the key mechanisms, policies, or processes that coordinate and control the work of the different units within the organization
the human resource management processes w/in organization for recruitment, hiring, training, deployment, performance measurement, promotion, and compensation
the abilities of individuals within the firm, as well as how the firm combined those individual talents to build capabilities (processes) to create a competitive advantage
skills and staffing
the two S's of the 7 S model that have their relationship shown as companies make hiring or development choices based on these two
these, like staffing, involve long term investments by firms to make sure they have the right employees who will help the company gain competitive advantage
the interpersonal relationship between people int he organization and, along with another of the 7 S's, comprises the culture of the organization
style, shared values
2 S's of 7 S model that comprise the culture of the organization
formal, informal
2 categories that style usually falls into
shared values
the priorities, values, and virtues that members of the organization see as important
superordinate goals
aspect of shared values that refers to the set of high-level goes that all stakeholders agree on
mission statement
area where many companies choose to make their shared values explicit
hard triangle
the elements in the 7S model that represents a set of hard (or tangible) levers that mangers can quickly pull to create alignment or realignment. by tangible meaning can appear on paper, document or manual
1. strategy
2. structure
3. system
S's that make up the hard triangle of 7S Model
1. style
2. shared values
3. skills
4. staffing
S's that make up the soft square of the 7S model
soft square
elements of 7S model that are often difficult to codify and usually take a long time to influence and change. determines how well the changes in the the remaining S's of the 7S model work
stakeholders, situation
2 Ss in addition to the 7Ss of the core model that lead to situation that may cause a firm to have a solid internal alignment but be out of alignment with external areas
individuals and groups who affect and are affected by the firm and its activiteis
describes the market and industry environment, social and technological trends, government regulations, and any other element outside the firm where change will affect alignment
60-70 percent
failure rate for organizational change
1. stop activity wanting to change
2. adopt new behaviors
3. ingrain behaviors into routines
3 basic phases of change
1. unfreezing
2. changing
3. refreezing
Kurt Lewin's steps in 3 step model of change
first step in organizational change process. begins when leaders, individuals, and groups within organization recognize and publicly admit that the current situation is not working. entails moving away from certain cations, policies, or strategies before adopting anything new. provides fundamental motivation for change
middle step in organizational change when company adapt to environment and learns new behaviors. is most difficult part part of change process. means moving from one set of behaviors and activities to another
last phase of organizational change. involves making change permanent by formalizing and institutionalizing new behaviors, methods, processes and routines. aligning rest of their activities to support change
phase of change when successful companies embed desired changes in hiring and training decisions, reward and compensation systems, and in shared values of the company's culture. allows organizations to maintain the progress they made through change
motivating phase of change and includes:
-making public admissions that current state is not working
-make clear break with past actions or processes
moving phase of change and includes:
-developing new behaviors
-engaging in trial-and-error processes
maintaining phase of change and includes:
-creating alignment
-embed new behaviors in training, compensation, and culture
1. generate sense of urgency
2. build a guiding coalition
3. create a vision
4. communicate the vision
5. empower individuals to act
6. garner short term wins
7. consolidate gains and move on for more change
8. institutionalize the change
8 key steps/tasks to implement successful change and shift in strategy
generate urgency
idea that managers must work to help their teams and organizations see need for change. means looking at larger environmental trends, spending time with customers, suppliers, employees, or stakeholders to gather data, and then creating a compelling case that will help people see, underhand and feel need to change
build a coalition
idea that managers need to create a group of influential people from all levels in the organization that suppport and lead the change effort (once people see and feel the urgency to change)
create a vision
idea that for change to occur there needs to be clear statement of where the organization wants to go, desired outcomes and endpoints, for organizational change and what life will be like when change is successful
1. generate urgency
2. build a coalition
3. create a vision
3 steps towards implementing successful change that help an organization move through unfreeze phase
1. communicate the vision
2. empower action
3. garner short term wins
3 steps towards implementing successful change that help with organization move through change phase by helping organizational members alter their behaviors and work patterns to create the change
communicate the change
idea that managers must express idea of change through variety of channels and repeat it over and over. managers must over communicate their vision and keep repeating the message even after they are sure most people have heard it
empower action
idea that leaders and managers in organization need to grant authority, formal or informal, that allows organizational members to try new practices. includes giving members the knowledge and resources they need to engage in new practices successful. also includes a safety net for people should they fail
garner short-term wins
idea that managers should begin projects that require the last change and have high probability of success. this will create credibility and momentum that encourages key organizational members to get off the fence and work to make the change successful. should come quickly
consolidate gains and press on
idea that organization must create a few high profile wins and continue to press ahead to work on the deeply rooted behaviors, policies, and practices that must change for a true realignment to occur. least glamorous and longest task of successful change. challenging projects help organization embed change deeply in its operating routines and represent an import par of making change stick, impetus for refreezing
institutionalize change
idea of making organizational element or practice so essential that its value is taken for granted and becomes part of the central values of the culture
systems, staffing, shared values
the three S's that managers primarily institutionalize changes through
see change institutionalized in this organizational element when routines of sales methods, accounting procedures, or operating processes embody the new set of behaviors or activities
see change institutionalized in this organizational element when compensation systems that reward the new behaviors further ingrain the notion that the change represents "the new way things are done here".when firm looks for, hires, and retrains a new type of employee. recruiting and ongoing behavior as a new generation of employees sets the standard for behavior
shared values
organizational element that is always altered by strategic change
institutionalize change
step towards implementing change that takes the longest of all steps/stages
1. generate urgency
2. build coalition
3. create vision
tasks/steps of implementing strategic change that are in:
The Silent Phase (unfreezing) 1/2-1.5 years
1. share vision
2. empower action
3. garner short term wins
tasks/steps of implementing strategic change that are in:
The Active Phase (change) 1-2 years
1. consolidate gains
2. institutionalize changes
tasks/steps of implementing strategic change that are in:
Completion (refreezing) 4-7 years
represents a general need for assessing whether any strategy, new or existing, works. is essential element of solid strategy implementation
measurement system
if this is an effective one, helps everyone (top management down to front line employees) understand how their daily work contributes to strategic succcess
principle line of sight
measurement tool that helps managers create measurement systems to overcome the limited perspectives of individual organizational members
principle line of sight
the notion that individual members in an organization should be able to connect their daily work tasks to the overall strategic goals of the organization
line of sight
idea behind this is to answer urgent questions about priorities quickly and effectively. allows clear idea of company's overall strategy, helping individual know role in furthering that strategy, and gives tools to decide which of the many urgent tasks are most important
line of sight
links day to day organizational behaviors and decisions to their impact on overall strategy. recognizes that most important strategies come to fruition only as individual managers and employees make decisions about how to allocate the valuable resources they control
line of sight
after formulating a clear and direct strategy, next step in creating this took is to translate overall strategy in to a set of specific objectives for divisions of large work groups
last of the three primary tools of implemenation
balanced scorecard
measurement tool that measures four broad areas of organizational performance: financial results/metrics (current performance), customer goals/metrics (external performance), internal business processes/process metrics (internal performance), and learning and growth/innovation metrics (future performance)