Strategy Implementation: Closing the Management Gap
Michael
D. Atherton
This article
appeared in the magazine Industrial Management.
It
seems that lately the word “change” has been used at
every opportunity in our popular culture and in business to describe
both what
is needed and what is inevitable. Whether
or not it is desirable is
debatable but its inevitability is
undeniable.
The implementation of
an
organization’s strategic plan is its attempt to take advantage of
change. The strategic plan, however
perfectly
conceived, is an academic exercise if it is not effectively implemented.
Amar points out that
strategy is
formulated by an organization to exploit its work within its
environment, both
internal and external. It is the
internal environment that, especially in industry, gets ignored. This is particularly disastrous for strategy
implementation.
An examination of the
highest-level business processes common to all organizations and how
organizations form around these processes, provides insight into how
strategy can
be more effectively transformed from a plan into reality.
Organization
forming/group orientation
The natural formation
of
organizations leads to people falling into one of three broad groups:
·
Planning
·
Project
·
Operations
Each of these groups
has a different
orientation and task to accomplish. People
who fall into the planning group
are involved in steering an
organization towards long-term success. In
many organizations this is a small
group of senior executives. Those in
project groups execute finite-term
undertakings. Examples of project
groups include system development teams and product development teams. Those in the operation groups are involved
in functions directly related to the sale and production of the
organization’s
product on a day-to-day basis. Examples
here might include departments such as customer service and traffic.
The orientation of
each group has
lead to different modes of operation:
Planning
– The planning
group employs a cyclical process that starts over regularly. Organizations are quick to audit themselves
in order to develop a plan that is realistic given their internal
constraints. This internal
self-examination often falls short in specifically defining how the
plan can be
implanted throughout the entire organization. The
planning process is cyclical in
nature and generally has a term of
one year or less.
Project
– The project
process is linear in nature and has a term of several weeks to several
years. It is used by project groups to
manage undertakings tasked by the planning group. These
groups often do not have visibility of, or fail to take
into account, strategic objectives and their relation to operational
considerations.
Operations
– Operations
groups have a continuous process for selling, producing, and
distributing the
organization’s product using tools installed by the project groups. Like project groups, they often do not have
visibility of, or fail to take into account, strategic objectives. Their decision time frame is usually very
short and has an immediate impact on the relationship of the
organization with
its external environment.
The
gap
A
gap forms when an organization
does not, as part of a strategic planning process, anticipate and
resolve
conflicts that arise between the cyclical, linear, and continuous
processes. The gap is the difference
between what was planned, what was developed and how it is used. It results in lost time, opportunities,
money and a strategic plan that misses it mark.
A
typical scenario that results
from the gap between management processes is that of the three year
project
launched by the planning group to develop and implement a business
system that
will enable the organization to achieve specific strategic objectives. The planning group may have a six month
process
cycle – certainly a year or less. The
project group starts the project in the right direction relative to the
original strategic plan - - it is amazing how often even this is not
the case -
but by the middle of the second year its progress is in conflict with
the
planning group's current plan. The project group is midway through the
project
while the planning group has completed three more planning cycles.
Ultimately
the operations group gets a tool from the project team that may be
late, over
budget, and worst of all, does not enable it to meet current and future
objectives.
The
strategic planning process
must define the objectives and framework within the organization by
which they
will be achieved. This critical step to implementing strategy is most
effective
when it takes into account the various management processes in the
organization
and addresses how they can work together more effectively.
Options
for closing the gap
Options for closing
the gap
between management processes will affect the culture of the
organization. The
cornerstone of the strategic plan might drive the approach or its
component
business processes might be examined in detail and then changed as
necessary. The end result is an
organization that is integrated across process boundaries.
This should not be confused with
functional
integration. A team that is formed
across functional boundaries, like a product development team that
includes
personnel from engineering, manufacturing and customer service, will
still, by
the nature of its orientation, be managed by the project management
process. The challenge is to develop an
internal environment where the outcomes each management process are
compatible
with the outcomes of the others and overall - albeit changing -
strategic direction
of the organization.
Drive the
organization with
the plan - Amos and Serlin of Levis Strauss & Company emphasize
that
the strategic plan must drive all activities. They
point out that once a cycle in the
planning process is completed,
there is a tendency for some to revert back to their previous task
orientation. Their solution is regular
meetings that are focused on strategic planning only.
Discussions of issues and actions in the
context of the whole
plan bring about a better sense of what is strategic in relation to a
specific
management process.
Focus the
organization -
Bausch and Lomb views the strategic planning process as a closed loop
system
that incorporates their quality process as the cornerstone to its
success.
Hribernik outlines several key elements related to how this has been
implemented throughout their entire organization;
·
Objectives
are corporate divisional and individual.
·
Performance
against the strategic quality plan is reviewed in the fourth quarter of
each
year
·
Cross
functional teams have been formed at the corporate divisional and
operating
unit level
·
Teams
are trained in a Bausch & Lomb technique called Team-Oriented
Problem
Solving (TOPS). This training enables teams to get heavily involved in
solving
quality issues in their day-to-day activities.
Cross-functional
teams can be
used to break down barriers between management processes within the
organization. Normal training of teams,
as in the case of Bausch and Lomb, serves to subtly permeate the
strategic plan
throughout the organization by focusing it on the objectives related to
quality. At the same time the corporate
culture becomes one that is proactive in achieving objectives
regardless of
each individual’s process orientation.
Reengineer for
objectives - Successful business
reengineering focuses
the organization on outcomes. As Goll
points out, reengineering is the total transformation of a business. It is an unconstrained reshaping of all
business processes technologies and management systems as well as the
organization’s
Structure and values. Reengineering, in
part, is a way in which the process and outcomes of strategic
management can be
integrated into other management processes to achieve desired outcomes.
Benchmark each
management
process – Process benchmarking seeks to measure the relative
effectiveness
of two or more businesses in performing a specific process. Venetucci points out that process
benchmarking results in the identification of an organization’s
performance
weaknesses and enables it to set performance goals for reengineering
activities. The external market view of
process benchmarking acts as a catalyst for innovative thinking,
stimulating
creative solutions to management problems.
Process benchmarking
by itself
will not result in the integration of business processes.
The exercise enables an organization to
better understand how its management processes stack up against its
peers. It also serves to identify those
processes
that are candidates for reengineering. Finally,
it can stimulate creative
approaches for breaking from the
status quo and solving problems within and between management processes.
Incorporate the
individual - A recent interview
of former San Francisco
49ers head football coach Bill Walsh in Harvard Business Review
draws
comparisons between his coaching success and successful management
practices. The interview highlights the
careful balance that must he achieved between providing explicit
direction and
avoiding stifling individual creativity and participation.
Organizations must have explicit
direction
while at the same time encouraging the participation and creativity of
each
individual.
The
implementation of an
organization’s strategic plan should not constrain the effectiveness of
its
human capital. The implementation of
the plan should involve communicating to each individual their unique
role and
its importance in achieving the plan's objectives.
At the same time, the individual must be
encouraged to offer
creative and adaptive ideas for achieving those objectives.
Conclusion
The natural formation
of
organizations into different management processes necessitates a
proactive
approach to integrating them. When they
are not actively integrated, the outcome of the strategic management
process
becomes end in itself. The outcome of
the project management process becomes less effective.
The result is lower quality,
productivity
and customer responsiveness. Opportunities
and margins are squandered.
Techniques for
closing the gap
between the different management processes within an organization
involve, to
some degree, changing the corporate culture. They require more than
creating
cross-functional teams. They demand an
understanding of the internal management processes at work in the
organization
and how they relate to each other. Successful strategy implementation
necessitates creating a culture that bridges the gap between these
different
management processes, drawing each toward objectives common to all.
For further
reading
Amar, Dev Amar,
“Manufacturing-Led Strategic Topology,” Production
and
Inventory Management Journal, Second Quarter, 1992.
Amos, Robert M., and
John Serlin,
“Strategic Logistics Planning,” Council of Logistics Management
Annual
Proceedings, Vol. 1, New Orleans, Sept 29, 1991.
Atherton, Michael D.,
“Don’t Get
Caught in the Management Trap,” APICS – The Performance Advantage,
October 1992.
Goll, Edmund O.,
“Let’s Debunk
the Myths and Misconceptions About Reengineering,”
APICS – The Performance Advantage,
December, 1992.
Hribernik, Robert M.,
“Using the
Quality Process to Drive Continuos Improvement,” Council of
Logistics
Management Annual Proceedings, Vol. 2, New Orleans, Sept 29, 1991.
Rapaport, Richard,
“To Build a
Winning Team: An Interview with Head Coach Bill Walsh,” Harvard
Business
Review, January-February, 1993.
Venerucci, Robert,
“Benchmarking
Objectives,” Production and Inventory Control Journal, Fourth
Quarter,
1992.
Westbrook, Jerry D.,
“Organizational Culture and its Relationship to TQM,” Industrial
Management,
January/February 1993.
