Defination• A strategy is a plan of action designed to

achieve a particular goal. The word strategy has military connotations, because it derives from the Greek word for general.[1]

• Strategy is different from tactics. In military terms, tactics is concerned with the conduct of an engagement while strategy is concerned with how different engagements are linked. In other words, how a battle is fought is a matter of tactics: the terms that it is fought on and whether it should be fought at all is a matter of strategy.

• Strategies in game theory• In game theory, a strategy refers to one of the options

that a player can choose. That is, every player in a non-cooperative game has a set of possible strategies, and must choose one of them.

• A strategy must specify what action will happen in each contingent state of the game - e.g. if the opponent does A, then take action B, whereas if the opponent does C, take action D.

• Strategies in game theory may be random (mixed) or deterministic (pure). That is, in some games, players choose mixed strategies. Pure strategies can be thought of as a special case of mixed strategies, in which only probabilities 0 or 1 are assigned to actions.

• Strategic planning is an organization's process of defining its strategy, or direction, and making decisions on allocating its resources to pursue this strategy, including its capital and people. Various business analysis techniques can be used in strategic planning, including SWOT analysis (Strengths, Weaknesses, Opportunities, and Threats ) and PEST analysis (Political, Economic, Social, and Technological analysis) or STEER analysis (Socio-cultural, Technological, Economic, Ecological, and Regulatory factors) and EPISTEL (Environment, Political, Informatic, Social, Technological, Economic and Legal).

Strategic planning is the formal consideration of an organization's future course. All strategic planning deals with at least one of three key questions:

"What do we do?" "For whom do we do it?" "How do we excel?"

• In business strategic planning, the third question is better phrased "How can we beat or avoid competition?". (Bradford and Duncan, page 1).

• In many organizations, this is viewed as a process for determining where an organization is going over the next year or more -typically 3 to 5 years, although some extend their vision to 20 years.

Execution of strategiesBut good strategies fail too, and when that

happens, it's often harder to pinpoint the reasons. Yet despite the obvious importance of good planning and execution, relatively few management thinkers have focused on what kinds of processes and leadership are best for turning a strategy into results.

Cont’dBut can better execution be taught?You can develop a model.... If people know

what the key variables are, they know what to look for and what questions to ask."

While execution can go wrong for a variety of reasons, one of the most basic may be allowing the focus of the strategy to shift over time.

Goal- shiftingThe attempt by Hewlett-Packard, after it

acquired Compaq, to compete with Dell in PCs through scale is a classic example of goal-shifting -- competing on price one week, service the next, while trying to sell through often conflicting, high-cost channels. The result: CEO Carly Fiorina lost her job and HP still must resolve some key strategic issues.

Another classic example of mis-synchronization: United Air Lines' TED, which attempted to set up a competitive subsidiary to compete against upstarts such as Southwest. This was a good idea as far as it went, but United tried to compete using its same old cost structure -- the main reason it was losing markets to the low-cost airlines in the first place.

• At other times, plans fail simply because they don't get communicated to all the people involved.

• Strategies also flop because individuals resist the change. For example, headquarters might want more standardization in a product, but a local marketing executive disagrees with the idea. "He might say, 'I need more nuts in my chocolate bar' or 'I need a different pack size,'"

• Many times, there can be sound reasons for resistance. Sometimes a strategy might make sense at the highest level, but its full impact on the whole organization has not been fully considered,

• For example, imagine that the general strategy calls for promoting one brand throughout the company while taking resources away from another brand. That might make sense in one market, yet be completely counterproductive elsewhere

• Cultural factors can also hinder execution. Companies sometimes try to apply a tried-and-true strategy without realizing that they are operating in markets that require a different approach. Even such a world-beater at execution as Wal-Mart, for instance, has sometimes made some missteps because of culture. One example: When Wal-Mart first moved in to Brazil, it tried to lay down terms with suppliers in the same way it does in the U.S., where it carries huge weight in the market. Suppliers simply refused to play, and the company was forced to reevaluate its strategy.

Yet the biggest factor of all may be executive inattention. Once a plan is decided upon, there is often surprisingly little follow-through to ensure that it is executed,

"Less than 15% of companies routinely track how they perform over how they thought they were going to perform,“

Instead, only the first year's goals are measured -- and executives often set first-year goals deliberately low in order to meet a threshold for a bonus.

• One school emphasizes people: Just put the right people in place and the right things will get done. However, within the people school, there are also divisions. Some experts insist that the right people are hired, not made.

• the key is to improve executive performance through training, and improve the average employee's performance through the creation of a culture of accountability.

For example, W. James McNerney, Jr., the chairman and CEO of 3M, argues that by improving the average performance of every individual by 15%, irrespective of what his or her role is, a company can achieve and sustain consistently superior performance.

Five Keys to Getting the Job Done

Develop a model for execution. - Michael Porter's theory of comparative

advantageChoose the right metrics.- sales and market share are always going to

be the dominant metrics of business

• Don't forget the plan.  • - plans are often simply agreed to and then

forgotten !• Assess performance frequently.• - Performance monitoring is still an annual

affair at most companies. The reason why Wal-Mart is so good at execution is it knows daily if what it is doing in each of its stores gets results or not

• By shortening the performance monitoring cycle -- from quarter-by-quarter to month-by-month or week-by-week -- top management can get more "real-time" feedback on the quality of execution down the line.  

• Communicate. • - companies often go wrong by creating a

cultural distinction between the executives who design a strategy and people lower down in the corporate hierarchy who carry it out.

WYDIWYGStrategy is Execution. Another way of saying

this is WYDIWG – What You DO Is What You Get.

Strategy Is . . . Strategy is many things: plan, pattern,

position, ploy and perspective. As plan, strategy relates how we intend realizing our goals.

As position, strategy is the stance we take: to literally take the high ground, to be the low-cost provider, to compete on the basis of value, to price to what the market will bear, to match or beat the price offered by any competitor,

As ploy, strategy is a ruse, it relies on secrecy and often on deception

As perspective, strategy is part vantage point and part the view from that vantage point, particularly the way this view shapes and guides decisions and actions.

Strategy is Execution

Strategy is Execution Strategy is getting it right and doing it right.

On the one hand, we have to envision the right course of action. On the other hand, once chosen, we have to carry it out properly

If our strategy and its execution are both flawed, the effort is "doomed from the beginning." Our chances of success are zero, nil

If our strategy is sound but its execution is flawed, we are guilty of muffing it

Only when our envisioned strategy and its execution are sound do we stand a pretty good chance of success. Even then success is not guaranteed

So, even if we get the strategy right and even if we carry it out efficiently and effectively, all we can really say is that the odds are in our favor, that we have "a pretty good chance.

• In the early 1980s, Tom Peters made a presentation to a group of senior managers at AT&T in which he used a slide that read, "Execution is strategy." We can turn that around and also say that strategy is execution. In simpler terms, we adapt to changing circumstances and so does our strategy. Thus it is that strategy as envisioned or contemplated becomes strategy as executed or realized

Organizations that successfully execute even mediocre strategies far outperform those that fail to execute the most brilliant of plans! According to Fortune Magazine, "less than 10% of strategies effectively formulated are effectively executed."

Enterprise Strategy Execution (ESE) is a proven methodology for driving better business results that encompasses a continuous process of prioritization, improvement, and control. ESE focuses and empowers every employee toward the common strategy.

How to Get There From Where You Are Today?When an organization commits to ESE, it must

do so in steps or stages. Tackling all of the various components at once -- no matter how focused and motivated an organization is -- is simply not feasible. New skills must be learned, new behaviors encouraged, cultural changes fostered -- all of which must occur over time to be successful.

Many managers are comfortable planning, but lag when it comes to actually putting the plan into action.

The Execution ChallengeThere are eight areas of obstacles or

challenges to strategy execution. Or, to put it positively, there are eight areas of opportunity: Handling them well will guarantee execution success. The areas relating to the success of execution are as follows:

Developing a model to guide execution decisions or actions

Understanding how the creation of strategy affects the execution of strategy

Managing change effectively, including culture change

Understanding power or influence and using it for execution success

Developing organizational structures that foster information sharing, coordination, and clear accountability

Developing effective controls and feedback mechanisms

Knowing how to create an execution-supportive culture

Exercising execution-biased leadership

Without guidance, individuals do the things they think are important, often resulting in uncoordinated, divergent, even conflicting decisions and actions.

Having a model or roadmap positively affects execution success.

It all begins with strategy. Execution cannot occur until one has something to execute. Bad strategy begets poor execution and poor outcomes, so it's important to focus first on a sound strategy.

It is vital to get the "right people on the bus, the wrong people off the bus," so to speak. But it's also important to know where the bus is going and why.

It drives the development of capabilities and which people with what skills sit in what seats on the bus.

Strategy defines the arena (customers, markets, technologies, products, logistics) in which the execution game is played. Execution is an empty effort without the guidance of strategy and short-term objectives related to strategy.

Execution or strategy implementation often involves change. Not handling change well will spell disaster for execution efforts.

Power reflects strategy, structure, and critical dependencies on capabilities and scarce resources. Knowing what power is and how to create and use influence can spell the difference between execution success and failure.

Yet managers are often motivated not to share information or work with their colleagues to coordinate activities and achieve strategic and short-term goals. Why? The answer to this question is vital to the successful execution of strategy.

Clear Responsibility and AccountabilityThis is one of the most important prerequisites

for successful execution, as basic as it sounds.

Managers must know who's doing what, when, and why, as well as who's accountable for key steps in the execution process. Without clear responsibility and accountability, execution programs will go nowhere. Knowing how to achieve this clarity is central to execution success.

The Right CultureOrganizations must develop execution-

supportive cultures. Execution demands a culture of achievement, discipline, and ownership

But developing or changing culture is no easy task. Rock climbing, white-water rafting, paint-gun battles, and other activities with the management team are fun. They rarely, however, produce lasting cultural change.

LeadershipLeadership must be execution biased. It must drive

the organization to execution success. It must motivate ownership of and commitment to the execution process.

Controls, Feedback, and AdaptationStrategy execution processes support

organizational change and adaptation. Making strategy work requires feedback about organizational performance and then using that information to fine-tune strategy, objectives, and the execution process itself.

Tackling too many execution decisions or actions at once will surely create problems. "When everything is important, then nothing is important," is a clear but simple way of expressing the issue. Priorities must be set and a logical order to execution actions adequately defined if execution is to succeed.

Planning requires anticipating early on what must be done to make strategy work.

Managers cannot act in a helter-skelter fashion when executing strategy. They can't focus one day on organizational structure, the next on culture, and then on to "good people," only to find out that strategy is vague or severely flawed.

Managers require a "big picture" as well as an understanding of the "nitty-gritty," the key elements that comprise the big picture.

Strategy Development and Execution (Strategy)

Assess your strategy on three levels (enterprise, operational, tactical) to be sure they are working together in an integrated way

Diagnose whether you should create a new plan, or if something else is getting in the way

Link current initiatives to your strategy, suggest alternatives, or recommend deletions

Ensure key leaders understand the strategy and their roles in a

Organizational Effectiveness (People)Assess whether you have the capabilities – and capacity –

required to achieve defined objectives Determine if your current capabilities are being used in the

most productive ways or if they might be redeployed or refocused to better advantage

Analyze the organizational structure to determine if it supports effective business practices and management behaviors

Coach leaders to help their teams maintain focus on the most critical issues

Help employees to work effectively across organizational boundaries (geographies, functional areas, business units, etc.)

Process Management (Process)Focus on core business processes, from ‘end to end’ (e.g.

those that are critical to your business, yet are not the core purpose of your business)

Assess where it ‘hurts’ to improve performance and better manage critical touch points, inputs, and outputs along the process

Evaluate current metrics and key indicators to ensure they are providing the right information to monitor the effectiveness of the process

Ensure everyone knows who is responsible (and accountable) for what – and why

‘‘If you know both yourself and your enemy, you can come out of hundreds of battles without danger’’, to a higher ground of defeating an enemy without even fighting, better strategy by exploring ‘blue oceans’ – untapped and untargeted markets which hold tremendous growth potential – rather than going head-to-head against rivals for a share of the existing market. The latter scenario is akin to a ‘red ocean’ where competition is based on outperforming the existing competitive benchmark. In other words, the best approach to earn a competitive edge is to gain the first mover advantage over competitors.

While competitors are the ones who set the agenda and rule of the game in red oceans, competition becomes insignificant in blue oceans.

Twelve strategies for instilling a culture of execution in your organization:Build accountability into meetingsBe realistic. Many strategies fail because

leaders don't make a realistic assessment of whether the organization can execute the plan.

Focus on a few priorities. I've seen organizations with strategic plans that detail twenty large strategies for one year.

• Ensure employees understand priorities. This may sound simple, but my experience is that most employees are not brought into the loop about what is important to the organization.

• Set milestones. Break down every organizational project into specific milestones with action items and dates. Communicate these milestones to employees and review the status at each project meeting.

Use your business plan. Is your business plan collecting dust? Many organizations go through the motions of spending two days every year developing strategic and business plans, only to stick them in the bottom of the drawer untouched

Hold people at the top accountable. If line managers are not executing, it's usually because their leader does not have an accountability structure in place. Leaders need to take ownership of their initiatives and follow-up with managers to ensure completion

Promote candid dialog. This is one of the biggest reasons why things don't get done in organizations. Many managers don't want to rock the boat, so they are very polite and don't challenge each other or their leaders. This often leads to failed projects and initiatives because managers weren't honest with each other.

What processes could have been better? Did we meet our time commitments? If not, why? Use this information to improve processes and hold people accountable.

Confront performance issues. Some managers put off confronting performance issues because it's unpleasant and takes time.

• Reward the doers. Structure your bonus and salary increases to reward those employees who get things done. There must be enough differentiation in bonuses and salary increases to send the message that execution is rewarded.

• Align systems. Too many organizations have business units that work in silos. Everyone is working on their part, and there is no alignment of the core projects or strategies

Holding employees accountable doesn't have to be about micro-managing or dictating. Setting clear expectations and due dates up front makes the process easier for everyone and promotes the best use of the organization's time and money.

• It is also true that strategic planning may be a tool for effectively plotting the direction of a company; however, strategic planning itself cannot foretell exactly how the market will evolve and what issues will surface in the coming days in order to plan your organizational strategy. Therefore, strategic innovation and tinkering with the 'strategic plan' have to be a cornerstone strategy for an organization to survive the turbulent business climate.

Vision• Vision, mission and values• Vision: Defines the desired or intended future

state of an organization or enterprise in terms of its fundamental objective and/or strategic direction. Vision is a long term view, sometimes describing a view of how the organization would like the world in which it operates to be. For example a charity working with the poor might have a vision statement which read "A world without poverty"

Mission• Mission: Defines the fundamental purpose of

an organization or an enterprise, basically describing why it exists and what it does to achieve its Vision. A corporate Mission can last for many years, or for the life of the organization. It is not an objective with a timeline, but rather the overall goal that is accomplished over the years as objectives are achieved that are aligned with the corporate mission.

ValuesValues: Beliefs that are shared among the

stakeholders of an organization. Values drive an organization's culture and priorities.

Methodologiesin Strategic Planning• Methodologies• There are many approaches to strategic planning

but typically a three-step process may be used:• Situation - evaluate the current situation and

how it came about. • Target - define goals and/or objectives

(sometimes called ideal state) • Path - map a possible route to the

goals/objectives

Draw-See-Think• One alternative approach is called Draw-See-

Think• Draw - what is the ideal image or the desired end

state? • See - what is today's situation? What is the gap

from ideal and why? • Think - what specific actions must be taken to

close the gap between today's situation and the ideal state?

• Plan - what resources are required to execute the activities?

See-Think-DrawAn alternative to the Draw-See-Think

approach is called See-Think-DrawSee - what is today's situation? Think - define goals/objectives Draw - map a route to achieving the

goals/objectives

• strategic planning can be as follows:• Vision - Define the vision and set a mission statement

with hierarchy of goals and objectives • SWOT - Analysis conducted according to the desired

goals • Formulate - Formulate actions and processes to be

taken to attain these goals • Implement - Implementation of the agreed upon

processes • Control - Monitor and get feedback from

implemented processes to fully control the operation

Mission statements and vision statements

• Mission statements and vision statements• Organizations sometimes summarize goals and objectives into a mission

statement and/or a vision statement Others begin with a vision and mission and use them to formulate goals and objectives.

• While the existence of a shared mission is extremely useful, many strategy specialists question the requirement for a written mission statement. However, there are many models of strategic planning that start with mission statements, so it is useful to examine them here.

• A Mission statement tells you the fundamental purpose of the organization. It defines the customer and the critical processes. It informs you of the desired level of performance.

• A Vision statement outlines what the organization wants to be, or how it wants the world in which it operates to be. It concentrates on the future. It is a source of inspiration. It provides clear decision-making criteria.

Cont’dAn advantage of having a statement is that it

creates value for those who get exposed to the statement, and those prospects are managers, employees and sometimes even customers. Statements create a sense of direction and opportunity. They both are an essential part of the strategy-making process.

• Many people mistake vision statement for mission statement, and sometimes one is simply used as a longer term version of the other. The Vision should describe why it is important to achieve the Mission. A Vision statement defines the purpose or broader goal for being in existence or in the business and can remain the same for decades if crafted well. A Mission statement is more specific to what the enterprise can achieve itself. Vision should describe what will be achieved in the wider sphere if the organization and others are successful.

Effective vision statement• Features of an effective vision statement include:• Clarity and lack of ambiguity • Vivid and clear picture • Description of a bright future • Memorable and engaging wording • Realistic aspirations • Alignment with organizational values and culture

• To become really effective, an organizational vision statement must (the theory states) become assimilated into the organization's culture. Leaders have the responsibility of communicating the vision regularly, creating narratives that illustrate the vision, acting as role-models by embodying the vision, creating short-term objectives compatible with the vision, and encouraging others to craft their own personal vision compatible with the organization's overall vision.

References

1. Liddell-Hart, B. H. (1967). Strategy (2nd Edition). New York, NY: Frederick Praeger.

2. Mintzberg, H. (1994). The rise and fall of strategic planning. New York, NY: Free Press.