Strategic planning and development management help: Principles of management
Today’s businesses encounter exceptional challenges. Organizations, leaders are confronted with increased competition, globalization, technological changes and strategic thinking and its implementation. This report summarizes key insights of strategy implementation issue and evaluates the problems organization face in planning and execution of the strategies proposed. Moreover, it discusses about the strategy-to-performance gap and its closing based on academic research. Specifically, findings of evaluation have been presented by framing an outline of rules followed by high performing organizations.
The academic research mainly talks about the issues regarding implementation of a strategy within the organizational premises. Companies plan the strategy by setting some standards and then execute it. Research reveals that most of the companies deliver only 63% of the monetary performance out of what their strategy promise to bring. The reason for this comes forward as strategy-to-performance gap that is invisible to the top management of organizations. In this context, leaders of the company make efforts to foster the performance and focus on the better execution of the strategy rather than thinking of a new one (Mankins & Steele, 2005).
On the other hand, research also talks about high performing organizations those focus on the proper planning and implementation of the strategy. Therefore, such organizations are regarded as the role models of the business world. Whereas, these organizations are so excellent in diverse areas that it continuously outperform, there consistently underperforming organizations results in wasted energy and loss of time. Further, well performed organizations like Barclays, Cisco, and Dow chemical, 3M and Roche have solid and rigorous strategic plans to implement (Mankins & Steele, 2005).
Nonetheless, it can be made a point that specific objective of the issues encountered whilst strategy planning and implementation include:
- Poor planning and execution of strategy
- Not being capable to close the strategy-to-performance gap
- Lack of monitoring actual versus planned performance against long-term plans
- Misapplied resources and communication breakdowns
- Limited accountability for outcomes of the performance after implementation of the strategy (Youngdahl, Ramaswamy & Krause, 2012)
Additionally, it can also be pointed out on the basis of academic research’s study that most of the organizations do not understand the real potential of the strategies being formulated. Once, the strategy places its root in premises it becomes hard to reverse it and in turn it promotes a culture of underperformance. Taking this forward, a survey presented the average performance loss involving the percentage of contributing factors in decreasing the strategy’s potential value. Majorly, insufficient or unavailable resources slipped away some 7.5% and poorly conversed strategy 5.2% of potential worth of strategy. Like all other surveys, these results also have some limitations. Link is not causation, and the data that has been shown is base on the information obtained by market (Mankins & Steele, 2005).
However, the outcome of this survey provides indications to what splits, high-performance organizations from their low-performance complements. Moreover, a conceptual framework of implementing the strategy suggests some ideas about its critical planning and execution. Managers and leaders were focused to make them learn about the issues of crafting and implementing strategy (Longman & Mullins, 2004). Consequently, the outcome would be in a following way;
- A description of some of the human problems involving the administrative level and the groups
- Creation of steps that has been followed to overcome those problems
- Monitoring of the implementation during the odds and ends of the year (Longman & Mullins, 2004).
In another research, employees were asked about their organizational strategy, less than 50% could be able to give an answer of it those are in line with their senior leaders. Accordingly, it can be assessed that organization do not need to state what their strategy is all about, but a facilitated and disciplined process or rules can be applied to prevent performance shortfalls. These are drawing out the organizational past experiences and information; translate this knowledge into rigorous and conversable strategic objectives. Afterwards, communicate these refined objectives to the resources at the correct time so that corrective actions can be taken on time (Miles & Overholt, 2007). Next, decisions can be made on what has to be done or not to accomplish these strategic goals. Finally, progress can be tracked and examined and issues can be raised and picked out in order to reinforce the decisions as and when they are required.
Furthermore, academic research study reveals the seven rules system that many of the companies follow for planning and execution of strategy (Neilson, Martin & Powers, 2008).
- First, a strategy should have clear vision and mission; it should not have a long list of objectives and should be precise and should have material value.
- Next, it suggests to discuss the assumptions rather than forecasting them
- Besides, rather than using a conceptual framework, organizations should adopt rigorous system to communicate with corporate centre and business unit regarding market trends
- An early assessment of resources to be employed at the time of planning because it improves the quality of the strategic plan and makes it far more executable (Allio, 2005).
- Once, organization deploys the resources, it requires to identify the priorities which may be communicated to them for execution process
- After formulating and implementing the strategy, performance can be monitored by the superiors in order to attain the real-time information. Further, provided feedback is used to reset planning assumptions and reallocate resources at the optimum level.
- Lastly, the competencies to develop the execution of strategy should be rewarded to ensure the future strategy’s effective implementation (Allio, 2005).
These seven rules are helpful and their impact also has been observed as the prize for closing the strategy-to-performance gap is huge and an increment in performance of anywhere from 60% to 100% has been noticed for most of the companies following this seven rule system (Mankins & Steele, 2005).
As a result, a culture of over performance emerges in business context and an understanding of strategy’s potential value is noticed after long. Precisely, closing of strategy-to-performance gap is not only a basis of performance development but also a vital driver of artistic change with a huge impact on organization’s capabilities, strategies and competitiveness.
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