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1
EIGHT LEVERS OF STRATEGY IMPLEMENTATION
Vikas A. Adlakha C-015
Anand Shah C-033
Malik M. Samnani C-044
Akhilesh Tripathi C-047
Abhijit J. Udani C-048
Krunal C. Sanghvi C-055
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FLOW OF PRESENTATION
Strategy Implementation
F-I-P Cycle
Implementation: A Gap
Why 8 Levers?
Structural Levers
Managerial Levers
Levers – Use at Different Stages
Conclusion
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STRATEGY IMPLEMENTATION
Strategy Implementation is the translation of chosen strategy into
organizational action so as to achieve strategic goals and
objectives.
Broader aspect of Strategy Implementation is all about
Developing and Utilizing its important parameters viz;
Organization Structure
Control Systems
Culture
Strategy Formulation
Strategy Implementation
Performance
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F-I-P CYCLE
Poor Formulation
Good Implementation
Poor Performance
Good Formulation
Poor Implementation
Poor Performance
Performanc
e
Formulatio
n
Implementa
tion
Strategy implementation shapes the next round of strategy formulation.
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IMPLEMENTATION – A GAP
Research of Management Strategists: Mankins & Steele (2005)
Companies realize only 63% of performance promised by their strategies.
Kaplan & Norton (2005) Poor implementation is to the fact that 95% of employees do not
understand company’s strategy. Johnson (2004)
66% of the corporate strategy is never implemented. Beer & Eisenstat (2000) – Six Silent Killers
Top-down or Laissez-Fair Senior Management Style Unclear Strategy and conflicting priorities. An Ineffective senior management team. Poor vertical communication. Poor coordination across functions, businesses or borders. Inadequate down-the-line leadership skills and development
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STRUCTURAL LEVERS
Actions
ProgramsPolicies
Systems
Who, what and when of cross functional integration
Installing organizational learning and continuous improvement practices
Installing strategic support systems Establishing Strategy
Supportive policies
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FOSTERING CROSS FUNCTIONAL INTEGRATION AND COMPANY COLLABORATION.
Input and Collaboration of all the members at all the levels
of strategy
•Eg: Lack of support from pilots was one of the roadblocks to the cost cutting strategy of AI
Cross Functional Integration
•Integration between the all the activities of the value chain •Eg: At ICICI bank aggressive sales pitch is backed by streamlined operations.
ACTIONS
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PROGRAMS
Organizational learning & continuous improvement
must incorporate innovation into the
implementation lever
Creation of Innovation Chain to include global
partners in the innovation effort
Practiced by
Japanese Auto
giants pioneered
by Toyota
Partnership
between Reva
Motors and
General Motors
for producing
small passenger
cars
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POLICIES
Institutionalizes
limits
aligns
shape
strategy-supportive practices & operating procedures thereby pushing daily
activities in the direction of efficient strategy execution
independent action and discretionary decisions and behavior. Policy
communicates what is expected, guides strategy-related activities, and restricts
unwanted variations
actions & behaviors with strategy, thereby minimizing divergent decisions and
conflict
character of work environment and translates corporate philosophy into how things are done, how people are treated, and what corporate beliefs and attitudes mean in everyday terms; determines the fit between corporate culture & strategy
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SYSTEMS: INSTALLING STRATEGIC SUPPORT
Provides timely access to both qualitative and quantitative data
Cross-functional decision criteria gave better results then functionally anchored decision criteria
Estimate how much to invest, which business model to support and which capabilities are needed
Concerns related to security/ privacy of data are issues related to implementation of IT system
Development of a decision-support model to assist in making complicated cross functional issue easier to understand
Enabled managers to quantify subjective interaction into more easily understood framework
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MANAGERIAL LEVERS
Interacting
AllocatingOrganizing
Monitoring
The exercising of strategic leadership
Tying rewards to achievements
Understanding when and where to allocate resources
The strategic shaping of corporate culture
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INTERACTING
Strategic Leadership is a critical implementation lever for building a capable organization.
Direction
Protection
Orientation
Motivation
Managing Conflict
Responsibilities under Strategic
implementation
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INTERACTING………………….CONTD.
Five levels of Leadership hierarchy:-
Highly capable individuals
Contributing team member
Competent manager
Effective Leadership
Executive
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ALLOCATING
Encompasses the use of major resources such as money, people and capabilities.
In addition to financial resources; Physical capital Human capital Organizational capital
Resources
Allocation of Resources:Understanding when and where to allocate resources
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MONITORING
Outcome
Favorable
Monetary
Non Monetary
Non Favorable
Corrective Actions
Results of Strategy - Performance
Two major probabilities of outcome
Ways of taking performance to next level
o Popular Technique: Tying reward to achievements is linking executive pay to organization's overall ROE .
• The lever suggests using multiple type of awards for motivating and encouraging employees
• E.g. – Genpact has the system of awarding - Gold, Silver and Bronze Recognition Certificates to their employees along with the commensurate performance bonuses
Reward
Achievement
Organization Culture is a powerful strategic implementation tool for business
Culture is a system of shared values and norms in an organization
Shaping of Organizational Culture requires: Clarity Consistency Comprehensiveness
The Strategy formulation – performance gap can only be removed if the organization culture is ready to adapt to higher standards and develop appropriate attitude and behaviour in the long run
Culture
Executive Culture
(A Model to follow)
Engineering Culture(Core
technology)
Internal(operational)
ORGANIZING
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USE OF LEVERS AT DIFFERENT STAGE
Early Stage
Entrepreneur needs to understand the impact of each of the levers and its strengths and weaknesses
An analytical tool to identify levers that might serve as barrier to company’s long term success.
Entrepreneur knows the role and impact of each lever to overcompensate one lever weakness with another lever strength
successful implementation of well formulated and appropriate strategy for established firms to achieve overall corporate success
Established Stage
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CONCLUSION
Role : facilitated the formulation and implementation of strategies
Result : Strategy Implementation helps create future
Resistance :Unless weak lever were identified and overcome, it would constraint future strategy formulation
Relaxation : Use of all eight levers are not necessary , a clear understanding of each lever’s role and it’s impact on ability to suceed is necessary
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Thank You
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