What are the approaches of strategy implementation?

Unika H.

Unika H.

Strategist, Marketer, Coach

Published Oct 31, 2018

I have observed that many managers view strategy as a troublesome concept to define, articulate and execute. As such, I found it important to do my best and share with you through a series of posts my knowledge of strategy and how or why as a concept it alludes so many of us. Strategy and strategy formulation itself is long-term focused and the practice of making a decision is based on a “snapshot” of information; on the surface this seems to be juxtaposed and it creates for many a challenge to rationalize. The prevailing paradigm (from my informal observation) takes strategy and presents it as a static “thing” when in fact it is very dynamic and overlaid on a time continuum. Furthermore, year over year we are presented with “new” tools and concepts that address a particular business pain promising to be the key to our strategy giving us a competitive advantage. When we attempt to adopt these practices we fail to achieve our desired outcome up to 80% of the time. This is because an organisation is comprised of multiple moving synergistic parts and we attempt to address one variable without taking into account the concept of bilateral causality. A good strategist recognises that an effective strategy is derived from a robust strategic planning process.

When you ask managers “What is Strategy?” The managers who respond with a more accurate response typically describe it as one of three practices.

1. A purely planning exercise
2. A course of action which emerges over time
3. The outcome of the resources which are available to the company.

All though none of the above clearly defines a strategy, they accurately depict the three theoretical approaches to strategy; The Planning Approach, The Emergent Approach, and Resource Based Approach.

The Planning Approach

Once a well-defined objective is set, the business environment analyzed and forecasts made, a plan can be worked out by senior management which is then passed down for implementation. This is a rational and objective approach to planning. Henry Mintzberg and many others have pointed out that this approach possesses some unfounded assumption as shown below:

• The future can be predicted accurately enough to make rational choices
• It is possible to detach strategy formulation from everyday management
• It is possible to forego short-term benefit in order to gain long-term advantage
• The strategies proposed are capable of being managed in the way proposed
• The Chief Executive has the knowledge and power to choose among options
• After careful analysis, strategy decisions can be clearly specified, summarize and presented; these strategic decisions do not need to be altered because circumstances outside the company have changed
• Implementation is a separate and distinctive phase that only comes after a strategy has been agreed upon

All of the above assumptions are fallacies; as a result a purely planning approach to strategy is ineffective and not advisable.

The Emergent Approach

According to this approach a strategy cannot be planned, it is organic and emerges over time in an unpredictable manner. The idea that people are not totally rational and logical takes into account the following:

• Due to bounded rationality, people can only handle a relatively small number of options
• Dominant paradigms lead people to become biased in their interpretation of data
• Due to bounded rationality, People are likely to seek a satisfactory solution rather than maximize profits
• Unpredictable outcomes arise from the need to negotiate to satisfy various interest groups.
• A company’s culture and politics get in the way of appropriately rationalizing resource availability and external factors

Arguably, just because the world is a complex and changing place does not mean that managers are forced to be purely reactive. Proactive action is justified by the following reasons:

• It is expected that adjustments to corporate objectives as time goes on is inevitable, but it is healthy for a company to be directed along the general lines of a broad mission
• Resources MUST be deterministically deployed otherwise they will be used inefficiently
• Appeasing interest groups within the organization should be perceived as a constraint, not a cause for inaction
• In many cases investments take a considerable time to reach fruition, therefore a degree of long term planning is inevitable
• It is better to make an informed judgment on the basis of some information than no information at all, or to ignore information altogether
• The act of attempting to plan makes the basis for management action clear

Resource Based Approach

This approach is primarily concerned with the search for competitive advantage by manipulating the way a company’s resources are utilized. The overriding theme is that a successful company is one that develops the ability to take advantage of opportunities as they arise and to create the opportunities themselves by innovative behavior. Note the following concept terms:

• Competences arise from the continual deployment and integration of resources over time and across activities.
• Core competences are necessary for successful performance.
• Distinctive capabilities are competences superior to competitors.
• Strategic capabilities aggregate the above mentioned concepts.

The challenge with the Resource Based Approach is that it makes success appear to be a mysterious outcome. It asserts that core competences are difficult to imitate and that sustainable competitive advantage is unique to every company. This now begs the question, “How does a sustainable competitive advantage arises in the first place?” Especially when in our highly competitive global marketplace almost everything can be replicated or adopted in short order.

The key take away is to recognize that competitiveness and advantage are derived from the choices we make. Our best decisions will be made through a combination of all three approaches to strategic planning. Like all things an organization is positioned on a time continuum in a changing environment. Harnessing strategic planning from the perspective that it’s a dynamic processencompassing all three approaches will provide your firm the greatest chance of achieving success.

This blog post is based on the work of Professor Alex Scott MA, MSc, Phd published by Heriot-Watt University – Edinburgh Business School