Corporate strategy focuses on the organisation as a whole, while a business unit strategy focuses on an individual business unit or market. In the real sense, a strategy is a plan of action designed to achieve a long-term or overall objective of the organisation. An organisation is not only top management, nor is it only middle management.
Every organisation entails everyone from the top to the front lines. It is only all the members of the organisation and how they are aligned around a strategy and support it, for better or for worse.
Henry Mintzberg from McGill University defined strategy as a pattern in a stream of decisions to contrast with a view of strategy as planning.
Alfred D. Chandler Jr. the author of Strategy and Structure (1962) also defined strategy as “the determination of the basic long-term goals and objectives of an organisation, the adoption of courses of action and the allocation of resources necessary for carrying out these goals”.
Researchers and practitioners have used the term strategy freely for over two decades. No controversy surrounds the question of its existence; no debate has arisen regarding the nature of its anchoring concepts.
Peter Drucker (1954) was among the first to address the issue of “strategy”. To him, an organisation’s strategy was the answer to the dual questions: What is our business? And what should it be? After Drucker’s initial statement, little attention was given to the concept of strategy in management literature until Alfred Chandler officially defined strategy.
Overcoming the organisational hurdles to strategy execution is an important step toward that end. It therefore removes the roadblocks that can put a halt to even the best of strategies. In the end, a company needs to invoke the most fundamental base of action: the attitudes and behaviour of its people deep in the organisation.
You must create a culture of trust and commitment that motivates people to execute the agreed strategy. People’s minds and hearts must align with the new strategy so that at the level of the individual, people embrace it of their own accord and willingly go beyond compulsory execution to voluntary cooperation in carrying it out.
Where effective strategic management is concerned, this challenge is heightened. Trepidation builds as people are required to step out of their comfort zones and change how they have worked in the past. They wonder. What are the real reasons for this change?
Is top management honest when we speak of building future growth through a change in strategic course? Or are they trying to make us redundant and work us out of our jobs. The more we remove people from the top, the less they involve in the creation of the strategy and the more this trepidation builds.
On the front line, at the very level at which a strategy must be executed day in and day out, people can resent having a strategy thrust upon them with little regard for what they think and feel. Just when you think you have done everything right, things can suddenly go very wrong in your front line.
To build people’s trust and commitment deep in the ranks and inspire their voluntary cooperation, organizations need to build execution into their strategies right from the start. This principle allows these organisations to minimise the management risk of distrust, noncooperation and even sabotage.
This kind of management risk is really relevant to strategy execution because strategy execution requires significant changes in doing things in the organisation. Relenting on strategy execution could render organizations strategy as mere academic exercise and such well thought out plans could be left in the shelves without implementation.
Hence, minimising such risk is essential as an organisation execute its strategy. Organisations must reach beyond the usual suspects of carrots and sticks. They must reach to fair process in the making and executing of their strategies. Practitioners have proven that fair process is a key variable that distinguishes successful strategic moves from those that failed. The presence or absence of fair process could make or break an organisation’s best execution efforts. Poor process could ruin strategy execution.
Let’s consider the experience of one of the leading pharmaceutical companies in Ghana. This pharmaceutical company is into pharmaceutical wholesaling. Because of the many distribution parameters, there are several complex controls to be considered in the company’s strategy execution.
Products must first be checked of dates of expiry before purchasing and the decision often rests on cognizance logic. To offer customers a leap in value, the company devised a strategy to remain competitive in its pricing and also minimise its operational cost. Using artificial intelligence, it developed an expert way of pricing its products by factoring in only the cost build up and adding an appreciable profit margin.
This process was dramatically simplified, giving the sales representatives the opportunity to penetrate the market. This win-win strategic move, however, was doomed from the start. It wasn’t that the strategy was not good or that the pricing model did not work, it worked exceptionally well. The strategy was doomed because the sales representatives fought it.
Having not been engaged in the strategy-making process nor apprised of the rationale for the strategic shift, the sales representatives saw the expert system of penetrating the market, in a light no one in the design team or management team had ever imagined. To them, it was a direct threat to what they saw as their most valuable contribution.
All the wonderful benefits, having a way to avoid the hassle-filled part of their job, having more time to pull in more sales and winning more supplies by standing out in the industry, went unappreciated. With the sales representatives feeling threatened and often working against the company’s strategy, by expressing doubts about its effectiveness to customers, sales did not take off.
After cursing its hubris and learning the hard way the importance of dealing with managerial risk up front based on the proper process, management was forced to pull its pricing system from the market and work on rebuilding trust with its sales representatives. Another scenario entails an NGO which found it too laborious for the women of a village in Ghana, walking too distant to the riverside every morning, to fetch water for their households.
The tiresomeness of it all is that these women would carry their babies on their backs, waists and fronts. The NGO thought it wise to construct a borehole closer to the village, to alleviate them from their slavery encounter. The borehole turned out to be an “economic white elephant”.
The village dwellers failed to patronise its usage. The NGO therefore conducted a study of why the village women were still walking their usual distance to the riverside every morning to fetch water. The finding of the study revealed that the NGO did not include these stakeholders when siting the borehole.
In furtherance to that, the study again revealed that walking that far distance every morning enables the women to converse enough with the friends and associates. They did not build execution into what they deemed as a helpful project for the community. The NGO embarked on sensitisation programme to convince all the village dwellers to patronise the borehole and afterwards they started fetching water from the borehole.
Commitment, trust and voluntary cooperation are not merely attitudes or behaviours, they are intangible capital. When people have trust, they have heightened confidence in one another’s intentions and actions. When they have commitment, they are even willing to override personal self-interest of the organisation.
Enquiring from any organisation that has created and successfully executed a strategy, the managers would be quick to rattle off how important this intangible capital is to their success. Similarly, managers of organisations that have failed in executing their strategies will point out that lack of intangible capital contributed to their failure. Such organisations were unable to orchestrate strategic shifts because they lacked people’s trust and commitment. Commitment, trust and voluntary cooperation allow organisations to stand apart in the speed, quality and consistency of their execution and to implement strategic shifts fast at low cost.