BUILDING AN ORGANIZATION
C A PA B L E OF
GOOD STRATEGY EXECUTION
S T R AT E G Y
I M P L E M E N TAT I O N
LECTURE
OUTLINE
Strategy Implementation
• Who is strategy implementer?
• Building a Capable Organization
• Budget, Policies, Support System &
Rewards
• Corporate Culture and Leadership
• Why Strategy Implementation Fails?
• Crucial Steps during Strategy
Implementation
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S T R AT E G Y
I M P L E M E N TAT I O N
• The most critical stage
• To achieve OMV, depends on the strategy
formulation processes and how to relate with
programs, budget and procedures
• Every manager and responsible individual has to
understand and support outlined strategies
S T R AT E G I C M A N A G E M E N T
MODEL
Establishin Internal & Objective
g Vision Extenal Strategy Strategy
Strategy
and Environme Execution Evaluation
Mission nt Analysis Policy
Improve Improve Repeat stage
Revise as Revise as as
as 1, 2, 3, & 4 as
needed needed needed needed
needed
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A Framework for Executing Strategy
The Principal Managerial Components of the
Strategy Execution Process
Building an Organization Capable of Good
Strategy Execution
Staffing the Organization
UNIT
ROADMAP Building Core Competencies and Competitive
Capabilities
Execution-Related Aspects of Organizing the Work
Effort
Current Organizational Trends
CRAFTING VS. EXECUTING S T R AT E GY
Crafting the Strategy Executing the Strategy
Primarily a market-driven activity Primarily an operations-driven
Successful strategy making activity
depends on Successful strategy execution
Business vision depends on
Perceptive analysis of market Doing a good job of working
conditions and company through others
capabilities Good organization-building
Attracting and pleasing Building competitive
customers capabilities
Outcompeting rivals Creating a strategy-supportive
Using company capabilities to culture
forge a competitive advantage Getting things done and
delivering good results
EXECUTING THE S T R AT E G Y
• An action-oriented, make-things happen task involving management’s
ability to
• Direct organizational change
• Achieve continuous improvement in Implementation
involves . . .
operations and business processes
• Move toward operating excellence
• Create and nurture a
strategy-supportive culture
• Consistently meet or beat performance targets
• Tougher and more time-consuming than crafting strategy
IMPLEMENTING A N E W S T R AT E G Y
REQUIRES ADEPT LEADERSHIP
• Implementing a new strategy
takes adept leadership to
• Convincingly communicate
reasons for the new strategy
• Overcome pockets of doubt
• Secure commitment of concerned parties
• Build consensus and enthusiasm
• Get all implementation pieces in place and coordinated
W H Y E X E C U T I N G S T R AT E G Y
IS
A TOUGH MANAGEMENT JOB
Overcoming resistance to change
Wide array of demanding managerial
activities to be performed
Numerous ways to tackle each activity
Number of bedeviling issues to be worked out
Demands good people management skills
Requires launching and managing
a variety of initiatives simultaneously
Hard to integrate efforts of many different work groups into a smoothly-functioning
whole
W H O A R E T H E S T R AT E G Y
IMPLEMENTERS?
• Individual or group
• Top management (CEO, BOD)
• Middle management (Business Unit Manager, Senior Executives, Division
Manager)
• Lower management (Head of Unit/Operation) and all level of employees
W H O A R E T H E S T R AT E G Y
IMPLEMENTERS?
• Implementing and executing strategy involves a company’s
whole management team and all employees
• Just as every part of a watch plays a role in making the watch
function properly, it takes all pieces of an organization
working cohesively for a strategy to be well-executed
• Top-level managers must lead the
process and orchestrate major initiatives
• But they must rely on cooperation of
• Middle and lower-level managers to see things go well in various
parts of an organization and
• Employees to perform their roles competently
CHARACTERISTICS OF THE
S T R AT E G Y I M P L E M E N TAT I O N PROCESS
• Every manager has an active role
• No proven “formula” for implementing
particular types of strategies
• There are guidelines, but no
absolute rules and “must do it
this way” rules
• Many ways to proceed that are
capable of working
• Cuts across many aspects of “how to manage”
TA S K S B A S E D O N T Y P E O F S T R AT E G I E S
Level of strategy Lead by Main Strategy
Network CEO and Executives • Develop establish network with
(Decision by CEO and BOD) potential companies/agencies
Corporate CEO and Executives • Built and manage business unit to
(Decision by CEO and BOD) generate good revenue
• Create synergy between business
unit
• Determine potential new sector to
venture
Business GM/Business Unit Head • Determine which best strategy is
(Decision by CEO, BOD and generating profit
Senior Executives) • Fast Reaction with changes of
external environment
• Determine divisional strategy
Divisional Division Manager • Develop and determine what kind of
(Decision by Business Unit Head) action to assist business unit
• Re-evaluate strategy by lower-level
manager 13
Operational Head of Unit/ Manager
04/17/2025
• Develop more specific strategy to
(Decision by Division Head) assist achieve divisional strategy
The Eight Components of the Strategy Execution Process
W H AT T O P E X E C U T I V E S H AV E TO
DO IN LEADING THE
I M P L E M E N TAT I O N P R O C E S S
Communicate the case for change
Build consensus on how to proceed
Arouse enthusiasm for the strategy to turn implementation process into a
companywide crusade
Empower subordinates to keep process moving
Establish measures of progress and deadlines
Reward those who achieve implementation milestones
Direct resources to the right places
Personally lead strategic change process and the drive for operating excellence
BUILDING A CAPABLE
ORGANIZATION — WHAT
IS INVOLVED?
Fig. 11.2: The Three Components of Building an
Organization Capable of Proficient Strategy Execution
PUTTING TOGETHER A
STRONG MANAGEMENT TEAM
Assembling a capable management team is a cornerstone of the organization-
building task
Find the right people to fill each slot
Existing management team
may be suitable
Core executive group
may need strengthening
Promote from within
Bring in skilled outsiders
SELECTING THE MANAGEMENT TEAM:
K E Y C O N S I D E R AT I O N S
Determine mix of
Backgrounds
Experiences and know-how
Beliefs and values
Styles of managing and personalities
Personal chemistry must be right
Talent base needs to be appropriate
Picking a solid management team needs to be acted on early in implementation
process
R E C R U I T I N G A N D R E TA I N I N G TA L E N T E D
E M P LOY E E S : I M P L E M E N TAT I O N I SS U E S
• The quality of a company’s people is an essential ingredient of successful strategy
execution
• Biggest challenge facing companies
• How to recruit and retain the best
and brightest talent with strong
skill sets and management potential
• Intellectual capital, not tangible assets, is increasingly being viewed as the most
important investment
• Talented people are a prime source of competitive advantage
KEY HUMAN RESOURCE PRACTICES TO
AT T R A C T A N D R E TA I N TA L E N T E D
EMPLOYEES
• Spend considerable effort in screening job applicants, selecting only those with
• Suitable skill sets
• Energy and initiative
• Judgment and aptitudes for learning
• Ability to adapt to firm’s work
environment and culture
• Put employees through training
programs throughout their careers
• Give promising employees challenging, interesting, and skills-stretching
assignments
BUILDING CORE COMPETENCIES
A N D C O M P E T I T I V E C A PA B I L I T I E S
Crafting the strategy involves
Identifying the desired competencies and
capabilities to build into the strategy to help
achieve a competitive advantage
Good strategy execution requires
Putting desired competencies and capabilities in place,
Upgrading them as needed, and
Modifying them as market conditions evolve
E X A M P L E : I N T E L’ S CORE
COMPETENCE
Design and mass production
of complex chips
for personal computers
EXAMPLE: PROCTER & GAMBLE’S
CORE COMPETENCIES
Superb marketing-distribution skills and R&D
capabilities in five core technologies - fats,
oils, skin chemistry, surfactants, emulsifiers
EXAMPLE: GENERAL
ELECTRIC’S
CORE COMPETENCIES
Developing professional managers with
broad problem-solving skills and
proven ability to grow
global businesses
EXAMPLE: DISNEY’S CORE
COMPETENCIES
Theme park operation and
family entertainment
E X A M P L E : D E L L’ S CORE
COMPETENCIES
Capabilities to deliver state-of-the-art
products to customers within days of next-
generation components coming available and
at attractively low costs
E X A M P L E : T O Y O TA’ S CORE
COMPETENCE
Legendary “production system” giving it
the capability to produce high-quality
vehicles at relatively low costs
T H R E E - S TA G E P R O C E S S O F
DEVELOPING COMPETENCIES
A N D C A PA B I L I T I E S
1. Develop ability to do something
2. As experience builds,
ability can translate into a
competence or capability
3. If ability continues to be polished and refined, it can
become a distinctive competence, providing a path to
competitive advantage!
STEP 1 IN DEVELOPING
COMPETENCIES
Develop ability to do something
Select people with relevant
skills/experience
Broaden or expand individual abilities as
needed
Mold efforts and work products of
individuals into a cooperative effort
to create organizational ability
As experience builds and company learns how to perform the activity
consistently well and at acceptable cost, the ability evolves into a competence
or capability
Typically, a capability or competence emerges from establishing and nurturing
collaborative relationships between
Individuals and groups in different departments and/or
A company and its external allies
STEP 2 IN DEVELOPING
COMPETENCIES
STEP 3 IN DEVELOPING COMPETENCIES
• If company masters the activity, performing it better
than rivals, the “capability” or “competence” becomes a
• Distinctive competence and
• Holds potential for
competitive advantage
This is the optimal outcome of the process
of building capabilities-competencies!
MANAGING THE PROCESS OF
BUILDING COMPETENCES:
FOUR KEY TRAITS
1. Competencies are bundles of skills and know-
how growing from combined efforts of cross-
functional departments
2. Normally, competencies emerge incrementally
from various company efforts to respond to market
conditions
3. Leveraging competencies into competitive
advantage requires concentrating more effort
and talent than rivals on strengthening
competencies to create valuable capabilities
4. Sustaining competitive advantage requires
adjusting competencies to new conditions
C O M P E T I T I V E A D VA N TA G E P O T E N T I A L
O F C O M P E T E N C I E S A N D C A PA B I L I T I E S
When it is difficult to outstrategize rivals
with a superior strategy . . .
. . . Best avenue to industry
leadership is to out-compete
rivals with
superior strategy execution!
Building competencies and capabilities
rivals can’t match is one of the
best ways to out-compete them!