Effectiveness Levers in Strategy Execution

Equally important to developing a good strategy is properly executing it. Part of strategy execution is the developing of a series of actions for its implementation.

Strategy execution is the implementation of strategy in an effort to achieve business goals. It comprises the daily structures, systems and operational goals that guide teams to success.

In recent years, several authors have dedicated themselves to studying strategy execution.

For Franken, Edwards and Lambert (2009), strategy implementation involves the development of a set of change programs to deliver the strategy and that, in turn, involve attracting, allocating and managing all necessary resources to execute these change programs. Execution is the result of countless decisions taken daily by executives and employees, acting in accordance with the information they have and with their own interests.

One of the most important studies of strategy execution was conducted by Gary L. Neilson, Karla L. Martin, and Elizabeth Powers. The authors observed executives in more than 250 companies. In this study, compiled in “The Secrets to Successful Strategy Execution”, the authors identified four key levers that executives must consider to ensure good strategic execution — decision rights, information, motivators and structure. This is illustrated in Figure 1.

The “decision rights” lever covers issues such as which decisions and actions fall within scope, the possible questioning of decisions, the involvement of superiors in operational decisions, persuasion and induction instead of command and control, and corporate support for business divisions.

The “information” lever covers the availability and agility of information about the competitive environment to corporate, adequate information flows across organizational boundaries, the availability of information to employees regarding the impact of their decisions on the results of the company, access to performance indicators, KPIs by line managers, and the alignment of communication with the market to convey a consistent image and single message (thus avoiding conflicting messages).

The “motivators” lever covers the performance assessment process for identifying high-, adequate- and low-performance employees, the connecting of success in meeting performance targets with professional development and compensation, and policies around bonuses, salaries and other tools designed to motivate employees to high performance.

Finally, the “structure” lever includes criteria for recognition, promotions and breadth of command. Effecting changes in the structure, reflected in the organizational chart, is the most obvious means for generating visible and concrete change; however, these usually produce quick, short-term boosts in efficiency, as they focus on the symptoms of the dysfunction, rather than the causes.

The authors conclude the article stating that the execution of strategy is an important challenge and must take into account the four levers described. Even in the companies most successful in this regard, only two-thirds of employees attest that important strategic and operational decisions are actually put into practice. Thus, all four levers must be considered—not just the motivational and structural levers, as is often the case.

The organization achieves results as it supports and sustains defined strategies. Acting with strategic management puts the company ahead of its competitors and generates a sustainable competitive advantage over the long term.

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