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PROMOTING GOOD STRATEGY EXECUTION

Allocating resources to the drive for good strategy execution.

Instituting policies and procedures that facilitate strategy execution.

Using process management tools to drive continuous improvement in how


value chain activities are performed.

Installing information and operating systems that enable personnel to


carry out their strategic roles proficiently.

Using rewards and incentives to promote better strategy execution and


the achievement of strategic and financial targets.

ALLOCATING RESOURCES TO THE STRATEGY EXECUTION EFFORT

Possible Resource Allocation Outcomes:

Too little funding that slows progress and impedes the efforts of
organizational units to execute their pieces of the strategic plan
proficiently.

Too much funding that wastes organizational resources and reduces


financial performance.

Strategy-Driven Budgeting: Allocating Resources

Screen resource requests carefully.

Approve only those that contribute to strategy execution.

Provide the level of resources necessary for the success of strategic


initiatives.

Shift resources to higher-priority activities where new execution initiatives


are needed.

INSTITUTING POLICIES AND PROCEDURES THAT FACILITATE STRATEGY


EXECUTION

Policies and operating procedures facilitate strategy execution by:

Providing top-down guidance regarding how things need to be done.

Helping ensure consistency in how execution-critical activities are


performed.

Promoting the creation of a work climate that facilitates good


strategy execution.

How Policies and Procedures Facilitate Good Strategy Execution

USING PROCESS MANAGEMENT TOOLS TO STRIVE FOR CONTINUOUS


IMPROVEMENT

Benchmarkin
g
Best
Practices

Managing
for
Continuous
Improvemen
t
Total Quality
Managemen
t (TQM)

Reengineering the Organization

Business Process Reengineering

Process
Reengineeri
ng

Six Sigma
Quality
Programs

Involves radically redesigning and streamlining work effort, flows


and processes to achieve dramatic improvements in performance.

Uses cross-functional teams, cutting-edge technology and


information systems to reset and refocus the organizations
strategy.

Achieving Continuous Improvement

Total Quality Management (TQM )

Creating a total quality culture bent on continuously improving the


performance of every task and value chain activity.

Is a long-term race without a finish in which success comes slowly in


small steps forward (kaizen).

A Statistical Approach to Achieving Continuous Improvement

Six Sigma Programs

Utilize statistical methods to improve quality by reducing defects


and variability in business processes.

Six Sigma Principles

All work is a process.

All processes have variability.

All processes create data that explain variability.

INSTALLING INFORMATION AND OPERATING SYSTEMS

Benefits of Information Technologies

Enable better strategy execution through data-based decisions

Strengthen organizational capabilities

Allow for real-time tracking of implementation initiatives and daily


operations

Provide monitoring of empowered employee performance


(electronic scorecards)

Build closer relationships with customers

TYING REWARDS AND INCENTIVES TO STRATEGY EXECUTION


Techniques for winning sustained, energetic commitment of employees
to the strategy execution process :

Providing incentives and an engaging in motivational practices


that facilitate good strategy execution
Striking the right balance between rewards and punishment for
individual performance.
Linking employee rewards to strategically relevant organizational
performance outcomes.

Nonmonetary Approaches to Enhancing Motivation

Provide attractive perks and fringe benefits.

Give awards and other forms of public recognition.

Rely on promotion from within whenever possible.

Invite and act on ideas and suggestions.

Create a work atmosphere of caring and mutual respect.

State the strategic vision in inspirational terms.

Share the firms critical information with employees.

Maintain attractive office space and facilities.

Linking Rewards to Strategically Relevant Performance Outcomes

Focus on and reward results, not effort.

Create a results-oriented work environment that focuses on what to


achieve, not what to do.

Set strategically-relevant, specific, and measurable stretch performance


goals that are difficult but achievable.

Link the performance goals of each individual in an organizational unit to


the units goals.

Reward and recognize as success superior performance in accomplishing


the goals.

Guidelines for Designing Effective Incentive Compensation Systems

Make financial incentives a major, not minor, piece of the total


compensation package.

Have incentives that extend to all managers and all workers, not just top
management.

Administer the reward system with scrupulous objectivity and fairness.

Keep the time between achieving targeted performance outcome and


payment of the reward as short as possible.

Avoid rewarding effort rather than results.