Strategy implementation process. Implementation of strategic planning stages in social organizations
The process of strategy implementation represents the unity of two components: strategic changes (in all internal variables of the organization), which constitute the essence of the practical implementation of the strategy, and their management.
There are many points of view on the issue of describing the implementation process strategies . There are authors who do not consider the implementation of the strategy in detail, believing that this is part of the usual systematically carried out activities managers .
According to A. L. Gaponenko And A. P. Pankrukhina 1, strategy implementation management specific management activity differs from ordinary management activities, like operating management and different from development management.
Indeed, management of any object can be represented as management of functioning and management of development, and, in our opinion, management of change. Development is one of the types of controlled changes, probably the most preferable. However, there are reduction strategies that can hardly be called development, but they are still change.
To highlight the features of development management, it is necessary to clarify what development is as a type of change and what the functioning of a management object is.
Development this is a change characterized by movement forward, the formation of new features, new structural characteristics object. Development means its improvement, improvement, progress, as well as growth and expansion, in contrast to changes that may be in the nature of reduction or regression. In relation to an organization, development means sustainable changes in the direction of activity, functions performed, the structure of the organization, the level of efficiency and quality of the organization’s activities, i.e. strategic changes.
Operation this is ordinary work, the life of the organization, the performance of functions required for the continued existence. To function means to act, to perform duties. Operation is the performance of standard operations under relatively constant conditions.
Functioning and development are two sides of the same process.
Development commercial organization , for example, is expressed in the fact that the enterprise:
masters the production of new products;
uses new technologies and methods production , in particular modern Information Systems;
applies modern methods management ;
masters new sales markets ;
patents major inventions and know-how for the purpose of further licensing;
forms his own branches ;
enters into strategic alliances with other similar firms in order to obtain a monopoly position and exploit price differentiation.
Strategic change is not an end in itself. In real business practice, there are enough examples of relatively long and successful functioning of various businesses in accordance with the same strategy, i.e. without any significant changes.
Such business situations are characterized by two main points: 1) business stability means right choice strategies ; 2) such situations certainly constitute an object strategic management , but at the same time they are not subject of strategic development, due to relevant changes external environment organizations . But in modern market conditions, it is precisely the adequate response of a commercial organization to the ever-increasing factor of uncertainty in the external environment (its changes) that is precisely one of the most relevant and acute problems simple functioning, and especially the development of any business.
The relevance of changes as one of the key objects and subjects of strategic management is due to objective modern trends, which characterize the immediate strategic development prospects of both any Russian and almost any other market . Consequently, strategic changes are the main constructive content of any strategy. It is strategic changes that are the main carriers of the new quality during the development of the organization, and it is strategic changes that represent the key object of management in the process of implementing both each specialized strategy and overall strategy generally.
Any change means transferring the change object from one state to another. Strategic changes transfer their object, commercial organization, from one strategic state to another. And at the same time, the actual strategic development of the organization consists in changing the quality of its activities as a result of a chain of such successive transitions.
Effective strategic development of an organization is characterized by the fact that in a constant process of transition from one state to another, there is a steady increase in its positive strategic quality.
The following main stages of the strategy implementation process as a set of strategic changes are distinguished:
1) launching a strategy;
2) major strategic changes;
3) completion of the strategy.
If we consider the process of managing the implementation of the strategy from an operational perspective, then its elements should be as follows:
1) development of a strategic program;
2) strategic control.
The strategic management process, according to some authors, includes three stages: strategic planning , strategy implementation , strategic control (Fig. 8.1).
Rice. 8.1. Components of strategic management
In this scheme, the logic of the operations performed is quite simple and understandable: planning changes (strategy development), implementing changes (strategies), controlling changes. If management actions to transform the planned strategy into reality are included in the process of strategy implementation, then, probably, strategic control, at least its types such as preliminary and current, should become part of the strategy implementation. Based on this, the following management tasks must be included in the implementation of the strategy:
1) building an organization capable of implementing the strategy, including improvement organizational structure, (Chandler A. Strategy determines structure 2);
2) development budget ensuring the implementation of the strategy, which provides for the endowment of each organizational unit with a budget that ensures the implementation of its part strategic plan and control over effective use resources ;
3) changes in the organization’s information system, including the creation of systems for collecting and analyzing strategic information;
4) the formation of a new organizational culture and strategic leadership style that corresponds to the adopted strategy by establishing common goals and values of the organization, defining ethical standards, creating an atmosphere of support for the strategy, support for organizational innovation and new opportunities;
5) improvement of the management system staff , including selecting people for key positions, creating a team, introducing new motivational mechanisms in the interests of implementing the strategy, developing a system of material and moral incentives, developing management for vision ;
6) creation of a system for continuous improvement (regulation) of activities based on the information received to achieve strategic goals (benchmarking).
At the same time, in our understanding, the implementation of the strategy includes two important points:
1) carrying out strategic changes in the organization, i.e. identifying the impact of the implementation of the strategy on the enterprise and its systems and bringing them into compliance;
2) performing basic management functions: planning, organizing the provision of resources, strategic control, evaluation and analysis of strategy implementation (Fig. 8.2).
Rice. 8.2. Strategy implementation process
The experience of strategic management accumulated by many domestic and foreign corporations indicates that the success of any strategy ultimately depends on the organization of work to implement the entire system of plans.
There is even an opinion that with a very good organization in implementing an average strategy, you can achieve greater success compared to those achieved by a poorly organized strategy with brilliant ideas.
The developments of the famous consulting firm McKinsey have shown that the successful implementation of a new strategy is hampered by the fact that it is based on old structures, values, systems, skills, personnel and management style that do not correspond to new tasks and methods of solving them. Based on her research, a model was developed called Seven S after the initial letters of the words denoting the conditions for successful implementation of the strategy. In Fig. 5.7 we have kept the writing of these conditions on English language, below is an explanation of the conditions in Russian. Its main idea is not only that the implementation of the strategy is carried out through changes in these areas, but also that in each specific case it is necessary to search for them best combination ensuring the effectiveness of the actions taken.
Rice. 5.7. Model for successful strategy implementation
Strategy - a strategic plan or course of action that predetermines the long-term allocation of resources to achieve goals.
Structure - structure or ways of connecting people, tasks and individual activities, as well as the relationships between them.
Shared Values - values shared by people and concepts for the development of an organization.
Systems - formal procedures or systems for control, performance measurement, planning and budgeting.
Skills - organizational competencies, including the abilities of individual workers, managers and other specialists of the organization.
Style - leadership style of management and general operating style of the organization.
Staff - organization of recruitment, selection, development, socialization and promotion of the organization's personnel.
Tools for implementing strategic plans
Implementation of strategy is a daily labor-intensive work focused on performing specific actions to carry out organizational changes, often affecting the interests of all employees of the organization. It is at this stage that managers at all levels of management must act as a single team, in which knowledge and understanding of strategic management processes is equally important for managers at all levels.
Plans for the strategic development of the organization as a whole, its structural divisions (business units) and functional subsystems are implemented through a system of programs, tactical and operational plans. Programs specify the activities included in the strategic plan; tactical plans detail tasks for more short periods and mainly at the middle level of management, operational plans link the daily activities of the organization with the targets and priorities of the strategy, primarily at the first level of management.
The basis of the organization's strategic development programs is the operating principles that are part of the philosophy of their development.
Let us give an example from domestic practice. The action program for implementing the strategy of the Fazotron-NIIR corporation has laid a number of fundamental principles that reflect the vision and system of its values: independence, mandatory fulfillment of government orders, profitability, continuity, consistency, search for new solutions in the economy and organization of enterprise management. In accordance with them, programs were developed:
carrying out privatization (corporatization) of an enterprise by its staff;
creation of a corporation (the corporation includes 24 subsidiaries and branches);
development of the latest high-quality competitive products;
transforming the main product into an independent product, entering the foreign market with it and conquering its niche;
preservation of scientific potential, scientific school and traditions of the enterprise;
ensuring work at all stages life cycle goods;
formation and support of the corporation’s image;
improving the management structure;
quality assurance systems based on ISO-9001 (Kanashchenkov A., Osokin A.
Operation strategy of an enterprise creating high-tech products in new conditions // Aerospace Courier, 2000, No. 6, p. 22-23).
In foreign practice, the transition from strategy to programs is carried out through the development of company policy as a system of measures for its implementation in such areas as:
marketing position;
productivity and added value;
profitability and the relationship between costs and income;
income, working conditions, prestige, status and powers of managerial and production staff organizations.
Let's give an example. The goals of Lincoln Electric's strategy, focused on product consumers, are formulated in such parameters as: quality, price, supply, service, delivery. The company's policy in achieving each of these goals consists of a whole system of measures.
For example, the goal of “quality” is achieved by: controlling product quality, maintaining standards, paying only for quality work, using experienced workers with low labor turnover, consistency between design and manufacturing methods.
The “price” target is based on the following measures (which partially overlap measures to achieve High Quality): compliance with consumer product standards, integration of production processes, ensuring consistency between design and production methods, use of an experienced and flexible workforce, division of labor, premium wages, process improvement, cost control, price reduction when cost savings are achieved, etc. .
The goals of the strategy, focused on the organization's personnel, include high wages, job security, control and respect for the dignity of everyone.
The high wage policy is based on the following measures: consumer product standards, process integration, experienced work force, division of work into parts, premium wages, process improvement, cost and overhead control, high standard of equipment used.
The goal of achieving safe operations is linked to policies based on: using quality equipment, improving processes, controlling costs and overheads, reducing prices when cost savings are achieved, maintaining inventory to ensure process continuity, avoiding peak loads, etc.
The dignity of workers in the organization is ensured by the policy of promoting people in the organization, giving workers shares of the company, the absence of special privileges, and assistance from managers in changing the status of workers (based on Aguilar F. J., Managing Corporate Ethics, p. 48, 54).
The main directions and methods used in programs and plans are interconnected. Thus, if a decision is made to change the organizational form, this inevitably leads to changes in the structure, processes and management methods. Innovations in technology necessarily lead to new organization labor and production, necessitate appropriate measures for human resource management, etc.
The third type of strategies are functional strategies, which are developed specifically for each functional area of the organization. Functional strategies are strategies that are developed based on corporate and business strategy. The purpose of a functional strategy is to allocate department (service) resources and search for effective behavior of a functional unit within the framework of the overall strategy. It is also necessary to take into account that the levels of strategy are interconnected (Fig. 1.2.1).
Rice. 1.2.1. Relationship between strategy levels
To the main types functional strategies relate:
1) the R&D strategy, which summarizes the main ideas about a new product - from its initial development to introduction on the market, has two varieties: an innovation strategy and an imitation strategy;
2) production strategy is focused on decisions about the required capacity, the placement of industrial equipment, the main elements of the production process, and the regulation of orders;
3) Marketing strategy is about identifying suitable products, services and the markets to which they can be offered. Determines the most effective composition of the marketing mix (market research, product and pricing policy, distribution channels and sales promotion). This strategy is especially successful in production aimed at mass buyers with falling real incomes;
4) financial strategy is responsible for forecasting the financial indicators of the strategic plan, evaluating investment projects, planning future sales, distributing and controlling financial resources.
Many organizations are developing a personnel (human resource) management strategy that allows them to solve problems of increasing the attractiveness of work, motivation, certification of personnel, maintaining the number of employees in enterprises and the types of jobs that correspond to the effective conduct of business.
Thus, based on this classification, the strategy developed by the enterprise must be a combination of several strategies. These strategies must be coordinated and closely interact with each other. The strategic choice of an enterprise must be definite and unambiguous. Only in this case will the enterprise achieve success.
2. Formation and implementation of strategy
2.1. Formation of strategy
According to most experts (I. Ansoff, J. Lorsch, K. Andrews, etc.), the formation and implementation of strategy is a conscious, rational activity of managers who, having realized the impossibility of further maintaining or strengthening the position of a company operating in an oversaturated market , on the basis of traditional policy, they are reorienting the methods of its development: from analyzing internal factors (achieved results, mastered goods and used technologies) to studying the opportunities provided by the external environment (external factors). The main emphasis when developing a strategy is on the analysis of specific market segments.
The strategy formation process consists of three stages: development, refinement, and strategic choice.
Under development the organization's market opportunities and resources are assessed (for the first option this is not necessary); formulation of a strategic goal; creation of a general concept of strategy and, within its framework, a set of projects, programs, strategic plans.
The strategic planning process begins with the organization's mission, then formulates the strategic intent (vision) of the organization.
Once a specific vision period has been justified, it is divided into a number of strategic periods, which also require additional justification. To do this, you can use a preliminary analysis of the external and internal environment.
Having determined the duration of the strategic period, it is necessary to set strategic goals for this period.
The next stage is a more detailed analysis of the external and internal environment. The external environment of the organization is represented by external environmental factors of direct and indirect influence. A general analysis of direct environmental factors can be supplemented by an assessment of the “five forces of competition,” reflecting all possible sources of threats and opportunities for the organization. Factors of indirect impact include political, economic, social, technological, natural and climatic, and institutional.
The purpose of such an analysis is to identify what may hinder the achievement of the set goals and what additional opportunities can be realized during this strategic period. If the analysis of the external environment leads to the identification of opportunities and threats to the organization, then internal environment analyzed for its strengths and weaknesses in relation to the set strategic goals.
The choice of strategy is carried out on the basis of pre-formulated criteria and within the framework of specific algorithms and techniques strategic planning. The selected generic strategies are then tailored to the specific situation.
At the finalization stage, options are adjusted and finalized to the desired standard.
This stage is aimed at transforming the organization's strategy into an interconnected system of plans for the organization into an interconnected system of plans for the organization and its divisions, forming a system of strategic, tactical and operational plans. The results of drawing up this system of plans are, as a rule, activities related to important changes in the organization: in its structure, remuneration systems, production processes, etc.
At the stage of strategic choice, an assessment takes place, on the basis of which the best option is accepted as the base one. It serves as the basis for the development of special and functional strategies, preparation of plans and budgets.
Canadian scientist G. Mintzberg formulated three possible, in his opinion, general models of strategy formation.
The planning model assumes that this is a purposeful, rational process carried out by specialist planners, led by the first person, which is embodied in a system of plans. Most often, with its help, options for strategies for mergers, acquisitions, diversification, etc. are developed.
The entrepreneurial model is based on the fact that the strategy is formed by the entrepreneur based on an intuitive understanding of the logic of this type of business, good knowledge of the situation, a deep personal vision of the problem and ways to solve it.
The experiential learning model is based on the evolving nature of the strategy formation process, the possibility and need for its consistent adjustment taking into account new information. Relevant decisions are made within the framework of a multilateral dialogue, in which the maximum number of employees of various ranks participates.
Thus, strategy formation includes strategy planning, development of programs, plans and methods for implementing strategy, monitoring and evaluation.
2.2. Implementation of the strategy
For the chosen strategy, a plan for its implementation is created, which contains: a list of the main stages of work, their time frame, distribution of responsibilities, a description of the mechanism for attracting and using resources, requirements for personnel and methods of motivating them, a list of circumstances that need to be constantly monitored, key criteria allowing judge the success of the strategy.
The implementation of the strategy is aimed at solving the following tasks:
1) establishing priority among administrative tasks so that their relative importance corresponds to the strategy that the organization will implement;
2) establishing a correspondence between the chosen strategy and internal organizational processes in order to orient the organization’s activities towards the implementation of the chosen strategy;
3) selection and alignment in accordance with the implemented strategy of leadership style and approach to managing the organization.
These tasks are solved through changes called strategic.
The peculiarity of the strategy implementation process is that it is not a process of its implementation, but only creates the basis for the implementation of the strategy and the organization’s achievement of its goals.
The main task of the strategy execution stage is to create the necessary preconditions for the successful implementation of the strategy. Thus, strategy execution is the implementation of strategic changes in the organization, transferring it to a state in which the organization is ready to implement the strategy.
Strategy implementation is the longest stage of the strategic process. At this time, the strategy chosen by management is implemented. The implementation of strategy necessitates the adoption of the system used to manage the organization. This system determines: which units will be responsible and for what, what information systems will be needed to monitor the implementation of the strategy, what retraining of the workforce will be required, etc. Particularly significant activities in the implementation of the strategy are the following: development of an option for action under unforeseen circumstances, development of an organizational structure, selection of an organization's management system, organization's policy, selection of an organizational association and control systems.
A strategic plan is developed for an ideal situation, but reality may differ to a greater or lesser extent from it. Therefore, an important element of any strategic plan is to develop options for dealing with situations where such differences become too great. This option is used if it is necessary to respond to important changes in the organizational environment that may actually arise. To effectively respond to changes in the environment, it is necessary to systematically monitor actual changes and correlate them with the planned ones, for which it is also necessary to determine the cyclical nature of control. Typically, such options are reviewed every year.
To successfully implement the adopted strategy, the organization must have a certain structure that provides maximum opportunities for its implementation. Development of structure includes the distribution of responsibility for completing tasks and decision-making rights in the organization. It is also necessary to decide what structure the organization should have: horizontal or vertical (centralized or decentralized decision-making), to what extent it should be divided into relatively independent working groups, etc.
Choosing an organization management system – uh then another one the most important problem, since it is the personnel that determine the successful implementation of the strategy. Later we will see that management can be structural, financial and operational. It may also be necessary to adapt the different systems used to manage the organization.
Organization policy plays a key role in the strategic management process. The political activity of an organization is a fact, since different groups have their own goals and programs and conflict between them is quite likely. The most important results of such conflicts are the struggle and the creation of coalitions that play important role in the process of strategic management, especially since strategic change creates a tendency to bring this struggle of forces to the fore. Later we will look at the issues of power and politics in the strategic management process
Strategy implementation includes the choice of organizational entity and control systems requires joint action and coordination between different departments. The organization must decide how best to analyze the performance of its units and manage their actions.
Successful implementation of strategy requires alignment with the structure, culture, and governance of the organization. Different strategies and contexts may require different structural changes, cultural values, and control systems from the organization. It is also necessary to formulate plans for resources and various functional areas.
At the stage of strategy implementation, many problems arise and there are objective reasons for this: here there is a transition from design to management practice, a collision with reality, which is always richer and more variable than any plans. In addition, the design process requires a certain (sometimes significant) time, during which such changes will occur in the organization’s environment that the plans may to some extent become “outdated” even before implementation begins. Let us highlight the following typical problems in the strategy implementation process.
First, there may be a mismatch between strategy and structure, and they may counteract each other. Secondly, the lack or absence of certain skills and the need to compensate for them. Reluctance of managers to change their working style and acquire new skills. Thirdly, information and communication systems may not meet new management requirements and do not adequately assess the changes taking place, so the organization's senior management team will not be fully in control of the situation. Fourthly, the implementation of the strategy includes changes, which, in turn, contain uncertainty and risk, and they can cause wariness of managers and reluctance to take responsibility for making risky decisions. Fifth, management methods such as compensation program, development management structure etc., which operate within the structural framework, may not correspond to strategic goals.
Thus, strategic management is a continuous process. Once strategies have been implemented, they need to be monitored and their implementation assessed at certain periods. An important condition for this is the selection of appropriate criteria that determine how well the strategy is chosen from the point of view of strategic analysis. This is, first of all, its feasibility and acceptability.
Conclusion
A strategy is a set of actions necessary to achieve set goals through the rational use of resources of the economic system. The goal of the strategy is to achieve long-term competitive advantage that will ensure high profitability and viability of the production system.
Strategy formation includes strategy planning, development of programs, plans and methods for implementing strategy, monitoring and evaluation.
The strategy developed by the enterprise must be a combination of several strategies. These strategies must be coordinated and closely interact with each other. The strategic choice of an enterprise must be definite and unambiguous. Only in this case will the enterprise achieve success.
Strategic management is a continuous process. Once strategies have been implemented, they need to be monitored and their implementation assessed at certain periods. An important condition for this is the selection of appropriate criteria that determine how well the strategy is chosen from the point of view of strategic analysis. This is, first of all, the degree of difficulty and amount of effort in order for a given strategy to be applied in practice, as well as determining the extent to which the results of applying a particular strategic option are aimed at fulfilling the organization's mission and achieving its goals.
List of used literature
1. Vesnin V. R. Management: textbook. – 3rd ed., revised. and additional – M.: TK Welby, Prospekt Publishing House, 2006. – 504 p.
2. Vikhansky O.S. Strategic management: Textbook. – 2nd ed., revised. and additional – M.: Gardarika, 1998. – 296 p.
3. Markova V.D., Kuznetsova S.A. Strategic management: Course of lectures. – M.: INFRA-M, 2001. – 288 p.
4. Management: textbook - M.: Publishing House "Jurisprudence", 2008. - 248 p.
5. Meskon M.Kh. and others. Fundamentals of management: Transl. from English / Meskon M.H., Albert M., Khedouri F. - M.: Delo, 1993. – 665 p.
6. Semenov A.K., Nabokov V.I. Fundamentals of Management: Textbook. – 5th ed., revised. and additional – M.: Publishing and trading corporation “Dashkov and K”, 2008. – 556 p.
Annex 1
Advantages and disadvantages of the strategy
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Advantages |
Flaws |
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1. Indicates the direction of development for the organization. |
1. Following a predetermined course in an unfamiliar environment can obscure potential dangers and prevent behavior change at the right time. |
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2. Coordinates the efforts of organization members. |
2. Leads to increased “groupthink” and loss of individuality. |
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3. Displays in general outline the nature of the organization and demonstrates its distinctive features |
3. A general description cannot always give an idea of the scope and complexity of the entire organization system. |
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4. Eliminates uncertainty and provides consistency and order. |
4. Inevitably simplifies and distorts reality, limits creativity. |
Appendix 2
Basic approaches to strategy development
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The essence of the approach |
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1. Main strategic approach |
The direct developer of the strategy and all its key components is the head of the organization or its owner. Typical for small private enterprises, enterprises family business and for companies that are run directly by their founders. |
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2. Delegation of authority |
Lower managers, groups of employees from various departments, or a special group are involved in developing the strategy. This approach provides the manager with the opportunity to choose from a variety of alternative strategies and allows managers at all levels to be actively involved in developing strategies. Typical for diversified companies with a wide range of products. The disadvantage is that lower-level managers do not always have sufficient information and experience to make strategic decisions. |
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3. Collaborative approach |
The development of the strategy is carried out by a group that includes line and functional managers from different departments, consultants from among former employees those with extensive experience and work experience, etc. require more time to develop a strategy. |
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4. Proactive approach |
The manager encourages all employees to protect and implement individual components of the strategy. This approach is only possible if there is a strong human resource potential. Can be used in industries with rapidly developing technologies. |
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Strategy development is one of the most important tasks solved by any organization. However, it makes sense only when the conditions for its implementation are created and it is transformed into concrete, effective actions, corresponding to the stated goals.
Successful implementation of a strategy can be achieved through adherence to following conditions :
Participation of all management personnel (and not just representatives of senior management) in the implementation process;
Availability of developed intra-organizational communications;
Availability of full information exchange;
The management system uses an organizational culture factor that can stimulate the implementation of strategic initiatives.
In practice, there are no clear recommendations and specific directives for organizing the strategy implementation process. This is due to the marked differences between different organizations and the strategic situations in which they operate. Uneven competition conditions and experience, different environment and ways of development of the organization, organizational culture, policies and motivation systems dictate the use of an individual approach to strategy implementation. Individual approach implies taking into account the characteristics of a specific situation and the organization itself. However, both domestic and foreign literature on this issue indicates the possibility of identifying some fundamental elements(steps, stages) of the strategy implementation process that most organizations need to complete when implementing a strategy. In Fig. 6.5 presents a diagram of the strategy implementation process, which reflects the main steps and some conditions that ensure the effectiveness of this process and sufficient adaptability to various situations, developing in organizations.
Determining the necessary strategic changes and organizing their implementation is one of the main functions of the manager responsible for strategic management. Carrying out changes is a necessary condition for implementing the strategy. The breadth and depth of the necessary changes associated with aligning the elements of the organization and its strategy depends on the experience and competence of senior managers, which determines the scope of work and the structure of the process of implementing the chosen strategy.
After clarifying the scope of the upcoming work, managers proceed to the next stage - the distribution of key management tasks among individual divisions of the organization and responsible executors. The range of these tasks includes both strategic and tactical tasks, the solution of which is necessary for the implementation of the strategy. The central place at this stage is occupied by the development of tactical goals for each economic and functional unit and their coordination with the strategic goals of the organization.
The tasks of the strategic plan can be completed only if they are appropriately reflected in the tactical and operational plans of the organization. Therefore, the development of a system of plans that is adequate to the structure of the organization is an important condition for the effective implementation of the strategy. The system of plans includes: a strategic plan (represented in one document or consisting of “main directions of development” and “organizational development plan”), tactical plans, project plans and programs.
The system of plans is the central tool of the strategy implementation management system. Through it, planned assignments, strategic objectives and goals are distributed and communicated to specific departments and managers; management influences are implemented on the structure and timing of work performed; distribution and redistribution of strategic resources is carried out.
When the strategy has been developed, the necessary strategic changes have been identified, tasks have been distributed among departments and performers through a system of plans, and budgets have been developed, the question arises of how to carry out this set of works and achieve the planned goals with maximum efficiency. To answer this, the organization must develop an appropriate policy.
At the next stage of strategy implementation, criteria and methods for assessing performance results are determined. The purpose of such an assessment is to analyze the process of implementing the strategy and forming adjustments (which is both the end and the beginning of the strategic management cycle).
Successful implementation of the strategy requires constant feedback, which is carried out by comparing the intended goals with the intermediate results of work to achieve them, which makes it possible to identify the so-called strategic gaps, the reasons for their occurrence and develop measures to eliminate them. The management task in in this case- create a system for assessing the correspondence between the actual progress of work and the requirements for effective implementation of the strategy. The central place is occupied by the definition of a range of evaluation criteria in the form of economic indicators, which are considered over different time periods.
In Fig. 6.5 presents two the most important conditions successful implementation of the strategy: monitoring the strategic situation and integration processes between various administrative systems and elements of the organization. As conditions for the implementation of the strategy, monitoring and integration processes represent very complex management work carried out in the process of implementing the strategy.
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Once the strategic plan is developed, the manager is faced with the task of turning it into action and good results. If strategy development comes first entrepreneurial activity, then its implementation is an internal administrative activity. The details of such activities depend on the specific situation. However, there are repeating key tasks of this process, each of which is decomposed into a number of subtasks.
Building an organization capable of implementing the strategy must include:
Development of an internal organizational structure based on the needs of the strategy,
Creating the arts and distinctive advantages on which the strategy is based,
Selecting people for key positions.
Budget development ensuring the implementation of the strategy, provides:
Providing each organizational unit with a budget that ensures the implementation of part of the strategic plan,
Control over the efficient use of resources.
Creation of internal administrative support systems requires:
Define and manage policies and procedures that impact strategy,
Development of administrative and operational systems for action in strategically critical situations.
The development of a payment and incentive system should include:
Motivating organizational units and personnel in order to implement the strategy,
Development of a system of material and moral incentives,
Development of results-based management.
Development corporate culture in relation to the strategy includes:
Establishment of private indicators,
Definition of ethical standards,
Creating a working environment that supports the strategy,
Cultivating the spirit of work at a high cultural level.
The strategic leadership style requires:
Managing the process of growth performance, company culture and promoting strategy;
Supporting organizational innovation and new opportunities;
Participation in policies for implementing strategy, supporting production capabilities and organizational consensus;
Emphasis on ethical standards of behavior;
Corrective action initiatives to improve strategy implementation methods.
Topic 11: STRATEGY IMPLEMENTATION PROCESS
Main questions:
1. Components of the strategy implementation process
2. Management functions and factors for implementing strategy
3. Necessary conditions for implementing the strategy
4. Planning for strategy implementation
5. Motivating staff to implement the strategy
Components of the strategy implementation process
The strategy implementation process is a unity of two components:
1) strategic changes in all internal variables of the organization (this is the essence of the practical implementation of the strategy);
2) managing these changes.
Management of any object can be represented as management of operation and management of development.
Operational management means management current state systems. This is ordinary work, the life of the organization, the performance of functions required for continued existence, this is the performance of standard operations in relatively unchanged conditions.
Development Management means managing the potential quality of the system. This is a change characterized by movement forward, the formation of new features, new structural characteristics of the object. Development means its improvement, improvement, progress, as well as growth and expansion, in contrast to changes that may be in the nature of reduction or regression. In relation to an organization, development means sustainable changes in the direction of activity, functions performed, structure of the organization, level of efficiency and quality of the organization’s activities, i.e. strategic changes.
Functioning and development are two sides of the same process. The development of a commercial organization, for example, is expressed in the fact that the enterprise:
· masters the production of new products;
· uses new technologies and production methods, in particular modern information systems;
· applies modern management methods;
· develops new markets;
· patents basic inventions and know-how for the purpose of further licensing;
· forms its own branches;
· enters into strategic alliances with other similar firms in order to obtain a monopoly position and use price differentiation.
Strategic change is not an end in itself. In real business practice, there are enough examples of relatively long and successful functioning of various businesses in accordance with the same strategy, i.e. without any significant changes. Such business situations are characterized by two main points:
1) business stability means the right choice of strategy;
2) such situations, of course, represent an object of strategic management, but at the same time they are not the subject of strategic development, conditioned by corresponding changes in the external environment of the organization.
The relevance of changes as one of the key objects and subjects of strategic management is due to objective modern trends that characterize the immediate strategic prospects for the development of both any Russian and almost any other market. Consequently, strategic changes are the main constructive content of any strategy. It is strategic changes that are the main carriers of new quality during the development of an organization, and it is strategic changes that represent the key object of management in the process of implementing both each specialized strategy and the general strategy as a whole.
Any change means transferring the change object from one state to another. Strategic changes transfer their object, a commercial organization, from one strategic state to another. And at the same time, the actual strategic development of the organization consists in changing the quality of its activities as a result of a chain of such successive transitions.
Effective strategic development of an organization is characterized by the fact that in a constant process of transition from one state to another, there is a steady increase in its positive strategic quality.
The following main stages of the strategy implementation process as a set of strategic changes are distinguished:
1) launching a strategy;
2) major strategic changes;
3) completion of the strategy.
If we consider the process of managing the implementation of the strategy from an operational perspective, we can highlight the following elements:
1) development of a strategic program;
2) strategic control.
The process of strategic management, according to some authors, includes three stages: strategic planning, strategy implementation, strategic control (Fig. 1).
