Organizations successful at strategy implementation effectively managesix key supporting factors:

     1.  Action Planning     2.  Organization Structure     3.  Human Resources     4.  The Annual Business Plan     5.  Monitoring and Control     6.  Linkage.

Action Planning

First, organizations successful at implementing strategy develop detailed action plans... chronological lists of action steps (tactics) which add the necessary detail to their strategies. And assign responsibility to a specific individual for accomplishing each of those action steps. Also, they set a due date and estimate the resources required to accomplish each of their action steps. Thus they translate

their broad strategy statement into a number of specific work assignments.

Organizational Structure

Next, those successful at implementing strategy give thought to their organizational structure. They ask if their intended strategy fits their current structure. And they ask a deeper question as well... "Is the organization's current structure appropriate to the intended strategy?"

We're reminded here of a client we worked with some years ago. The company was experiencing problems implementing its strategy calling for the development of two new products.

The reason the firm had been unable to develop those products was simple... they had never organized to do so. Lacking the necessary commitment for new product development, management didn't establish an R&D group. Rather, it assigned its manufacturing engineering group the job of new product development... and hired two junior engineers for the task. Since the primary function of the manufacturing engineering group was to keep the factory humming, those engineers kept getting pulled off their "new product" projects and into the role of the manufacturing support. Result – no new products.

Human Resource Factors(STRATEGIC LEADERSHIP)

Organizations successful at strategy implementation consider the human resource factor in making strategies happen. Further, they realize that the human resource issue is really a two part story. First, consideration of human resources requires that management think about the organization's communication needs. That they articulate the strategies so that those charged with developing the corresponding action steps (tactics) fully understand the strategy they're to implement.

Second, managers successful at implementation are aware of the effects each new strategy will have on their human resource needs. They ask themselves the questions... "How much change does this strategy call for?" And, "How quickly must we provide for that change?" And, "What are the human resource implications of our answers to those two questions?"

In answering these questions, they'll decide whether to allow time for employees to grow through experience, to introduce training, or to hire new employees.

The Annual Business Plan

Organizations successful at implementation are aware of their need to fund their intended strategies. And they begin to think about that necessary financial commitment early in the planning process. First, they "ballpark" the

financial requirements when they first develop their strategy. Later when developing their action plans, they "firm up" that commitment. As a client of ours explains, they "dollarize" their strategy. That way, they link their strategic plan to their annual business plan (and their budget). And they eliminate the "surprises" they might otherwise receive at budgeting time.

Monitoring & Control

Monitoring and controlling the plan includes a periodic look to see if you're on course. It also includes consideration of options to get a strategy once derailed back on track. Those options (listed in order of increasing seriousness) include changing the schedule, changing the action steps (tactics), changing the strategy or (as a last resort) changing the objective. (For more on this point, see "Monitoring Implementation of Your Strategic Plan.")

Linkage - The Foundation for Everything Else

Many organizations successfully establish the above five supporting  factors. They develop action plans, consider organizational structure, take a close look at their human resource needs, fund their strategies through their annual business plan, and develop a plan to monitor and control their strategies and tactics. And yet they still fail to successfully implement those strategies and tactics. The reason, most often, is they lack linkage. Linkage is simply the tying together of all the activities of the organization...to make sure that all of the organizational resources are "rowing in the same direction."

It isn't enough to manage one, two or a few strategy supporting factors. To successfully implement your strategies, you've go to manage them all. And make sure you link them together.

Strategies require "linkage" both vertically and horizontally. Vertical linkages establish coordination and support between corporate,

divisional and departmental plans. For example, a divisional strategy calling for development of a new product should be driven by a corporate objective – calling for growth, perhaps –- and on a knowledge of available resources –- capital resources available from corporate as well as human and technological resources in the R&D department.

Linkages which are horizontal –- across departments, across regional offices, across manufacturing plants or divisions – require coordination and cooperation to get the organizational units "all playing in harmony." For example, a strategy calling for introduction of a new product requires the combined efforts of – and thus coordination and cooperation among – the R&D, the marketing, and the manufacturing departments. For more on the subject of linkage, please see

Culture and Strategy:

Operationalizing StrategyMarch 25, 2009

in Human Resource Management

Culture and Strategy:

Operationalising strategyNowhere is this concept more important than in institutionalizing strategy. When an organization’s culture is consistent with its strategy, the implementation of strategy is eased considerably. Kotter and Hesketh’s concept of “adaptable cultures” is an attempt to build organizational culture on a foundation of paying attention to key stakeholders such as employees, customers, and stockholders, thus ensuring that the culture can change when the organization’s strategy must change. It is impossible to successfully implement a strategy that contradicts the organization’s culture.

Thus, AT&Ts traditional belief in the importance of universal telephone service, which dates from the days of its monopoly, has been a major stumbling block in the implementation of its new market oriented strategy that distinguishes between customers who need different services. It is only recently, with the explicit culture change program introduced by Robert Allen, that AT&T has began to be more responsive to its customers and to act quickly when necessary. That AT&T managers are acquiring the ability to move quickly was evident in their decision to acquire McCaw Cellular, a large, nationwide provider of cellular telephone service.

If strategies set the general goal and course of action for organizations, operational plans provide the details needed to incorporate strategic plans into the organization’s day to day operations. Operational plans fall into two general classes. Single use plans are designed to be dissolved once they have achieved specific,

nonrecurring goals. Standing plans, in contrast, are standardized approaches to handling recurrent and predictable situations.

Single Use plans:

Single use plans are detailed courses of action that probably will not be repeated in the same form in the future. For example, a rapidly expanding firm, such as Fresh Fields natural grocery stores, that is planning to set up a new warehouse will need a specific single use plan for that project. Even though the company may have established a number of warehouses in the past, the new warehouse presents unique requirements of location, construction costs, labor availability, zoning restrictions, and so forth.

A program is a single use plan that covers a relatively large set of activities. It outlines (1) the major steps required to reach an objective, (2) the organization unit or member responsible for each step, and (3) the order and timing of

each step. Projects are smaller, separate portions of programs; they are limited in scope and contain distinct directives concerning assignments and time. If the program is to transfer inventory from one warehouse to another, one related project might be to evaluate floor space at the proposed installation. Budgets are statements of financial resources set aside for specific activities in a given period of time; they are primarily devices to control an organization’s activities, and thus are important components of programs and projects.

Standing Plans:

Whenever organizational activities occur repeatedly, a standing plan – a pre-established single decision or set of decisions can effectively guide those activities. Once established such standing plans help managers conserve time because similar situations are handled in a pre-determined, consistent manner. Standing plans consist of policies, rules, and more detailed procedures.

A policy is a general guideline for decision making. It sets up boundaries around decisions, telling managers which decisions can be made and which cannot. In this way it channels the thinking of organization members so that it is consistent with organizational objectives. Your university has a number of policies, such as those that dictate the relative importance of athletics and extracurricular activities vis-à-vis academic learning and performance. Sega recently adopted a policy to label the content of its video games, to warn parents of materials that may be inappropriate for some audiences. Some policies have rules built into them – statements of specific actions to be taken in a given situation. For instance, it may be a rule that an athlete with a grade point average below 2.0 cannot be a member of a varsity team. Most policies are accompanied by detailed procedures, called standard operating procedures or standard methods, which are just a de tailed set of instructions for performing a

sequence of actions that occurs often or regularly.

Most organizations have some form of policies, rules, and procedures that help in implementing strategy in cases where routine action is required. At the Limited, a specialty clothing store, standard procedure ensures that customers get an offer of assistance within the first few seconds of entering the store. At Wal-Mart, a discount merchandiser, store procedure requires that one person greet all customers and smile at them.

what is your operational strategy and what is it doing for your company? Is it simply making you a better competitor? Or is it positioning you for commanding market leadership? In a volatile environment in which operations have become a make or break proposition, more and more leaders are asking these questions.

Today’s Operational CEOs realize that even brilliant business strategies are destined to fail without the right operational business strategies to back them up. Our experience points to five essential ingredients of operational strategy:

1. Transform Market Forces into Operational Advantage

Examine the external macro and micro global market forces shaping the operational context in your business strategy, including macroeconomic, demographic, regulatory, technology, competitor, and customer shifts. Which are putting you on the defensive? How can they be turned to your advantage? What new arbitrage opportunities do they introduce? This is the kind of insight that Black & Decker used to turn a regulatory requirement for double insulated power tools into a new modular product platform that redefined cost and performance in category after category. The same type of insight helped Progressive Insurance transform automobile claims from an unproductive part of its cost structure into a far more economical and valued source of competitive advantage.

2. Do One Thing Extraordinarily Well

Companies that deliver disproportionate shareholder value identify the one thing above all others that they do extraordinarily well, and then execute relentlessly. Consider the case of Apple iTunes. Its 73 percent share of the digital music player market is fueled by Apple’s relentless pursuit of ease of use as a competitive advantage. Isolate your company’s singular basis of

competition. Some companies focus on product leadership, and are consistently first to market with the right new products. Some companies like Wal-Mart are all about cost leadership, attaining the lowest end to end operational cost and the highest productivity. Others are focused on winning based on customer intimacy, delivering an exceptional total product and service customer experience. Wherever you choose to play, the key is to have the discipline of focus in operations management.

3. Think End-to-End, Continuous, Real-Time, and Horizontally

Every organization has a set of core operational domains that make up its operational model. For most, these comprise some combination of the development chain, the supply chain, and the customer chain. Operational business strategies configure these operational domains to deliver against business strategy, and create a competitive advantage in their own right.

4. Drive Innovation in Your Operations and Business Model

Peter Drucker defined innovation as change that creates a new dimension of performance. He also stated that a key accountability of the CEO is innovation. Too often

innovation management is perceived to be a technical or product-oriented activity. The reality is that operations management innovation is creating the commanding leaders today. Will you settle for operational improvement, will you target operational excellence, or will you set your sights on operational innovation? CEOs that don’t challenge their organizations to break operational rules and reward them for succeeding will ultimately have to settle for less. 

5. Execute Relentlessly

A complete operations management strategy requires a commitment to execution, identifying the critical programs to integrate efforts and making the necessary changes in 1) organization and management systems 2) talent, culture, and leadership, 3) business technology systems, and 4) process architecture. Our research shows that companies with commanding leads in their markets execute relentlessly across all four of these dimensions of execution, informed by their global marketplace insight, aligned to a singular competitive focus, emboldened by a clear innovation intent, and guided by a sound operational model aligned with business strategy and business economics. 

In the 21st century, companies that make all aspects of their operations management a source of strategic

innovation will dominate their markets, delivering unparalleled revenue growth, EBITDA performance, and shareholder return.

Institutionalizing Strategy

To emphasize systems, style, staff, skills, and super-ordinate goals, we need to look at how strategy is institutionalized. An institution is a collection of values, norms, roles and groups that develops to accomplish a certain goal. The institution of education, for example, developed to prepare children to be productive members of society. To institutionalize a business strategy, business leaders must also develop a system of values, norms, roles and groups that will support the accomplishment of strategic goals. So, strategy is institutionalized if it is connected to the culture, the quality system, and the other driving forces in the organization.

We have seen that the drive toward TQM can be institutionalized. Another aspect of organizational life that is also undergoing increasing institutionalized is an emphasis on ethics development. Both shift organizational attention from detection and control to coordination and strategic impact. The ultimate outcome of this shift in focus is an enhanced quality of work

environment for employees and increased quality of products and services for customers.

The role of the CEO: CASE STUDY

Because chief executive officers (CEOs) spend most of their time developing and guiding strategy, their personal goals and values inevitably shape organizational strategy. For examples, Walt Disney valued family entertainment and conceived the idea of a “magical little park” that would amuse and educate both children and their parents. His vision resulted in Disneyland, which opened in 1955. Although Disney died in 1966, his values and vision have continued to shape his company, as evidenced by the completion of his plans for Disney World (opened in 1971) and Epcot Center (opened in 1982). Usually how ever a change in CEO is associated with a change in strategy. Although current Disney CEO Michael Eisner has continued to develop the theme parks, he has moved away from Walt Disney’s strategy of offering mainly G-rated films for children to create Touchstone Pictures, which offers PG and PG-13 films that appeal to wider audiences.

Their role in strategy formulation makes CEOs especially important to strategy implementation. First, they interpret strategy, acting as final judges when managers disagree on implementation. Second, CEOs enact through their words and actions the seriousness of an organization’s

commitment to a strategy. Third, CEOs motivate, providing intangible incentives beyond pay or bonuses. By appealing to members’ values, beliefs, and loyalties, CEOs can mobilize support for a strategy.

Jim Henson and the Magic of the Muppets:

Because the head of an organization can be central to its direction and culture, an unexpected death such as that of Muppet-creator Jim Henson can challenge the survival of an organization. In August 1989, Walt Disney Co. had announced plans to buy the licensing and publishing businesses of Jim Henson Productions and give Muppet creator Jim Henson an exclusive 15 year production arrangement. While affectionate speculations abounded concerning a possible love triangle between Mickey Mouse, the amorous Miss Piggy, and an ever elusive Kermit, negotiations continued with Disney offering a reported $150 million to $200 million.

Less than six weeks later, Brain Henson, Jim’s son, was named president of Jim Henson Productions, and Cheryl Henson, Jim daughter, was named vice president for creative affairs. My father had wonderful goals and wonderful dreams, Brain noted. And that was seen in virtually everyone in the company. So in some ways he is still there in everyone. We have lost our focus temporarily, but we will get that back right away, He is still there.

Brain recognized the important role his father played as the provider of the company’s creative inspiration. He therefore endeavored to protect his father’s vision, while at the same time, building the company. It is not one man’s vision, asserted Brain they are a company with a creative team at the top and his father built a company around him; He is spreading that.

The greatest challenge for Jim Henson Productions lay in figuring out how to be creative without Jim Henson. According to screenwriter Jerry Juhl this translated into “getting back to center”. You could deal with it corporately figure out offices and things like that.

But Jim Henson Productions was able to get back on track. Although the deal with Disney fell through, several joint projects continued, including a 3-D Muppet film and live stage show for the Disney theme parks, and Disney’s video arm introduced the Jim Henson Video label of Muppet programs on video cassette. In addition, in December 1992, the company released The Muppet Christmas Carol, its first feature film project.

Future plans for Jim Henson productions remain uncertain. This does not indicate failure. They still do not know where they are going to be three years from now. But that was always how it was operated, said Brian. He constantly wanted to see what felt fresh what new ideas

came along. And then he would have the courage to try and see if the new idea worked. In this way, Brian has carried on the tradition of his father.

Embedding Resource Mobilizationwithin Core Organizational Strategy- the MITRA experienceJune 2006…Shalabh Sahai and Rahul Nainwal were reviewing the progress that MITRA had made in the past couple of years. MITRA had grown quickly in terms of operations as well as team strength. As founders, Rahul and Shalabh had managed to mobilise the funds needed to fuel the organizational growth until this point, but it was pretty much dependent upon its relationship with just a handful of benefactors. This growthcould not be sustained if a serious ‘Resource Mobilization Strategy’ was not formulated for MITRA.MITRA’s journey…MITRA (a Hindi word meaning ‘friend’) had evolved dramatically since its conception in 2000, from an organization focusing on using information and communication technologies(ICTs) to bring about change in the social sector to the present, using people, their skills andexpertise, to make a significant difference in meeting India’s social and rural development needs.. Indian cultural traditions embraced communityvolunteering, however, the recent economic boom was leading to a prospering urban middle class that was dissociated from volunteering.

So while MITRA began, with the support of a private bank, by launching an online volunteer matching program with Non-Government Organizations (NGOs) through an internet portal; by 2003, it had to switch to a strategy of promoting and facilitating volunteering through personal counselling. Tracking Resource Mobilization…MITRA started with initial funding support from a large private sector bank in India. The commitment of its founders and the early successes ensured that the bank’s confidence sustained in MITRAWriting an objective strategy… And, people’s skills and expertise when utilized in the right kind oforganizations can make a significant difference in meeting India’s social and rural development needs.While MITRA was clear on its future strategy, It made sense for MITRA to factor in a ‘fee’ for its services. However, the organization recognized the need for committing to provide its services to all its constituencies, irrespective of their ability to bearthe costs. the organization would need to ‘seed’ volunteering at its own cost, to achieve desirable results. Given the circumstances, it was realized that a soundfinancial strategy, which would draw on all these considerations was required to be put inplace for MITRA.Earned Revenues: MITRA would aim to earn 35% of its annual budget throughrevenues from services. This would ensure that services are perceived as valuable tothe customers – individuals, NGOs and institutions, while operations are efficientenough to be competitive. The scope of growth would also not be limited byavailability of funds from other sources.

Program Grants: MITRA would conduct programs such as fellowships andworkshops to invest in creating capacity within the civil society to adopt volunteeringas a formally organized process. Such programs would look for external fundingsupport and would comprise 35% of the budget.Corpus Funds: MITRA should be able to continue its core volunteer placementservices independently. The organization believes in testing potential and innovativeprojects. Therefore, to provide for these, it would create a corpus fund throughendowments. Income from investment of corpus funds would contribute another 30%of the annual budget dedicated to these services.Institutionalizing the strategy…As thoughts progressed, certain things became clear to Shalabh and Rahul. The financialmodel would need to be embedded into the veins of MITRA. And the veins were its people and culture.MITRA had attracted people from a variety of backgrounds into its fold. There were people with post-graduate degrees in social work from premier institutes in India and there were others from corporate, management and software industries. For long, however, the program teams had been oblivious to the organization’s finances. Moreover, the feeling in the organization was that MITRA was a charitable entity giving out ‘free services’ to the target constituency. But if the likes of revenue services were to be rolled successfully, the entireteam would need to take burden. Thankfully, the team was young, vibrant and passionate about their work and MITRA. There was an opportunity to create team involvement in the resourcemobilization strategy and this began in right earnest after June 2006.

The process unfolded as detailed below, in moving from a founder driven thinking / fund-raising mode to an organizational way of thinking and working.Building team stakesBetween July 2006 and July 2007 MITRA conducted two internal workshops for its employees with an objective to involve the core team in Resource Mobilization, reflecting the changed organizational strategy. The workshops reviewed past performance sharing it withthe entire team. Each member addressed the group laying out the program / centre specific achievements along with the challenges. The senior management laid down, thread bare, the funding sources along with the program specific utilization of allocated funds, broken downinto major heads. This brought the team to a common understanding of the resources available and utilized in the past. An early voice of protest from employees, “We want bettersalaries”; actually turned out to be an echo of support, “Let us contribute to the organizations’ income so that it is able to pay us better”. It’s a great relief to RAHUL and his friend!The senior management introduced to the team the vision ahead and laid down the broad goals for the year ahead. The entire team felt very close to the innermost working of the organization and were able to relate to the objectives and the challenges better.New structure, fresh outlookWith people on its side, the next step was to achieve operational efficiency. Owing to quick organizational growth, staff in each program reported directly to either Shalabh or Rahul.Further, both of them shared the responsibility for fundraising for all the programs together.Attempts had been made to structure the team into regional units based upon location. Each region comprised of staff that worked on different programs (though sometimes a single staff member may be handling more than one program in her/ his location). The idea was to create a matrix structure with regional managers alongside program managers. However, the results

were not that encouraging. It seemed that hierarchies were being added without much operational benefits. For a small organization of 16-18 people, it was also a complexstructure.To make things simple and more efficient, a new structure comprising program units was developed in place of the existing structure. The ‘National Volunteering’ unit was created,comprising of existing staff from iVolunteer Service Centres in Delhi, Mumbai, Bangalore and Chennai. The unit was made responsible for facilitating local volunteering and employee volunteering in their respective regions and was headed nationally by a Program Manager.The ‘Fellowship’ unit was made responsible for the iVolunteer India Fellow and iVolunteerIndia Fellow Professional programs and any other initiatives launched on similar lines. The kij; unit was headed by a Program Manager – Fellowships. The iVolunteer Overseas programwas already functioning as a separate team. A new position was created called ‘Manager – International Volunteers’ to give a push to the program that had a ready market and potential for high revenues.An analysis of potential sources of funds for its different programs revealed that the corporates were seen as potential funders as well as clients for several programs and services.It made sense to have a single interface for all corporate relations. Further, the organization needed to revamp its image and aggressively market some of its programs and services. To address these needs, a new position of ‘Manager – Corporate Relations & Marketing’ was added.

Goal OrientationOnce the organization was structured into distinct program units, it became easy to allocate costs to each of the programs as a cost centre. Transparency of costs led the managers to adopt financial goals along with the operational goals. For example, the corporate relationsManager was now familiar with the costing structures of the national volunteering team. servicing the clients. At the same time, the national volunteering team was able to understand the perceived value of their services and was driven to improve operational efficiencies.Performance linked incentives were introduced for the entire team. People liked their job.Monetary incentives enhanced their motivations. People were also able to see a growth pathfor themselves in the new organizational structure. Efforts were also undertaken to assess and address the training needs of the teams.would ensure long-term sustainability of the program.MITRA was now rolling out recruitment services to provide full-time staff for its partnerNGOs (based upon a long pending demand). Thus, two new verticals –www.JobsForGood.com and www.MicrofinanceJobs.com – launched in 2007, begantargeting the social sector and the micro-finance sector job markets respectively. Theorganization was clear that the new initiatives would have to earn their own money. In thelong term, it also envisaged investing profits from recruitment services to fund its corevolunteering services. By November 2007, the recruitment initiatives were able to cover theircosts, earning about Rs. 250,000; equivalent to approximately US$ 8000, in revenues.The founders worked with their long-term corporate benefactor to secure a one-time corpus

endowment. They impressed upon this partner that the new financial model that wouldsustain the organization in future. A corpus endowment would fund some of the coreorganizational activities and also act as a ‘show of faith’ in its mission, they reasoned. Effortsyielded in a seed endowment for the corpus funds of MITRA.Learning and ChallengesIn October 2007, Shalabh discussed with Rahul the progress that MITRA had made sincetheir conversation at Rahul’s home more than a year ago. Progress had been encouraging.They had learnt that an organization like theirs could attain sustainability only by embeddingresource mobilization as an important element in the organization’s operational strategy andvision.The key challenge had been to convince the key stakeholders in the organization, employeesand clients (volunteers, corporates and non-profits) that, the revenues linked to the servicesare key to the sustainability of the services themselves.More so, building revenues into its operational model simply changed the organization’s thinking process. It now evaluated each new and existing service not only in terms of the value it added to India’s social development but also in terms of identifying who was willingto recognize the value and pay for it. The team was now driven by MITRA’s mission of “enabling people to bring skills and expertise to the social development sector in India” and also understood that sustainability was an important yardstick in the organization’s efforts indoing so. Promising team members were elevated to managerial positions in the new unit-based structure. This had multiple effects. The promoted members felt recognized and soonexhibited their professionalism in the way they took charge of their units. The new positions

and responsibilities showed the entire team that the management believed in sharing responsibilities and growth of the MITRA team. For the management, it was simply creating a second line of leadership.The team realized that if it was difficult to convince more people (funders and paying clients) about their services, then the services themselves needed a re-think – were they actually serving a purpose or was it just the MITRA management that thought so. It realized thatbuilding revenue streams allowed the organization a certain degree of independence to pursue the programs it really believed in, independent of the funders.MITRA also learnt that the grant support from the corporate sector was not a steady stream. Moreover, matching the program objectives and the methodology was not always possiblewith most corporates. At the same time, the corporate focus on finances often helped the organization think through their programs for financial sustainability. Shalabh and Rahul agreed that these were still early days for a young organization and a process that had just begun. They were happy that MITRA’s board continually guided them.This time they had met across the conference table in MITRA’s head office. Though, in the evening, they rode Rahul’s Royal Enfield to a city café to discuss some more.