The Strategy Implementation Toolkit
Moving from a strategic decision to executing on that new strategy is a significant challenge for most companies. Anecdotal evidence suggests that 50%-90% of strategic decisions made are never implemented. What makes it so difficult to implement strategy?
In our paper "Strategy implementation: Taking stock and moving forward," recently released in Long Range Planning, we look at what the research has to say about strategy implementation, and to be frank, the current research on implementation does not provide any straightforward or simple answers.
In our study, we conducted a review of the strategy implementation research published in top-tier academic journals and found 119 articles that spoke directly to this topic. As we analyzed these papers, we found different streams within the research that looked at implementation somewhat disparately.
One stream of research took what is called a contingency perspective, which examined how resources, structures, and processes were configured. The idea here is that just as firms shape their strategies to create a good fit with the external environment, they also need an internal fit in order to be able to execute them. In fact, from this perspective, implementation is viewed as setting up an organization (resources, structures, and processes) that are well aligned and internally consistent with the overall strategy. For example, a differentiation strategy might require different resources, structures, and processes than a cost-leadership strategy.
The other dominant stream of research took a cognitive perspective and looked at implementation as the mindset of the people within the organization. From this body of research, implementation is all about creating a shared understanding, as this allows for collective action and moving the organization in a desired strategic direction.
Surprisingly, these two streams of research rarely speak to each other. We felt this was unfortunate, because in our view, implementation is not either configuration or cognition – it requires both! To bring the fragmented research together, we introduce the strategy-as-practice lens, which is concerned with what managers DO, i.e. their practices. Since implementation is about moving from decisions to actions, a strategy-as-practice lens is informative and appropriate.
We argue that implementation is a type of work that differs from the work of strategic decision-making. The strategy-as-practice perspective directs our attention to the activities, actors, and tools involved in strategy work. In our analysis of the 119 articles, we find five key practices:
- Structure and process matching
- Resource matching
- Negotiating (both interests and meanings)
Implementation involves all five practices. Managers who think of strategy implementation as primarily a structural issue will fall short. Of course, structure matters. Structure can shape behavior. However, structure is not enough. Implementation requires attending to the other four practices as well.
For each practice, we draw on existing research to describe the activities, actors, and tools involved.
For example, if the strategy involves expanding into new product markets, top management will need to consider if the current structure enables this or if they need to establish a new division or a project group with responsibility for the new product market. Current decision-making processes may also need to be changed to facilitate the implementation of the strategy. They need to match structure and processes to the new strategy.
This way of matching structures and processes can influence behavior, but it is typically not enough to secure the implementation of a new strategy. The other four practices are also needed.
If we stick to the strategy of expanding to a new market, the company would also need to think carefully about whether it has the right resources, how it can monitor progress and results, how the new strategy is framed, and the negotiations of interests and meanings involved in implementation.
Taking a closer look at framing, which has to do with how the strategy and its rationale are communicated, research suggests that framing new strategies as radical departures from the past can trigger resistance. However, framing the new strategy as an extension of the existing strategy and identity can smoothen implementation. While senior management plays a particularly important role in framing, middle and line management also carry influence here and in negotiating interests and meanings. Implementation practices cut across organizational levels.
By uniting and analyzing the fragmented research on strategy implementation, our paper provides an overview of the most important practices involved for both researchers and managers. The paper maps the terrain of existing research-based knowledge on each of the five practices. Moreover, while it also points to where more research is needed, the framework we develop can be used as a valuable checklist and tool for managers struggling to implement change.
Access this research here:
Friesl, M., Stensaker, I., & Colman, H. L. (2020). Strategy implementation: Taking stock and moving forward. Long Range Planning, 102064.