1. The Task of Implementing Strategy
An action-oriented, operations-driven activity revolving around managing people and business processes
Tougher and more time-consuming than crafting strategy
Success depends on doing a good job of
Leading
Motivating
Working with others to create fits between strategy and how organization does things
Implementation involves . . .

2. Why Implementing Strategy Is a Tough Management Job
Implementing a new strategy takes adept leadership to
Overcome pockets of doubt
Build consensus
Secure commitment of concerned parties
Get all implementation pieces in place and coordinated

3. The Eight Components of Implementing Strategy
supportive “fits”
Allocating Resources
Building a
Capable
Organization
Establishing Strategy-
Supportive Policies
Strategy Implementer’s Action Agenda
Instituting Best
Practices for
Continuous
Improvement
Exercising Strategic
Leadership
Shaping Corporate
Culture to Fit Strategy
Installing Support
Systems to Carry
out Strategic Roles
Tying Rewards
to Achievement
of Key Strategic Targets

4. Task # 1: Building a Capable Organization
Select able people for key positions
Develop skills, core competencies, managerial talents, competitive capabilities
Organize business processes, value chain activities, and decision-making to promote successful strategy execution

5. Building Core Competencies: The Necessary Understanding
1. Core competencies are rarely grounded in skills or know-how of a single department
Typically emerge from collaborative efforts of different work groups
2. Leveraging competencies into competitive advantage requires concentrating more effort and more talent than rivals on strengthening competencies and creating valuable organizational capabilities
4. Sustaining competitive advantage requires adapting competencies to new conditions

6. Building Competitively Valuable Competencies and Capabilities
Involves
Managing human skills, knowledge bases, and intellect
Coordinating efforts of related work groups
Collaborative networking among internal groups and with external partners
Achieving dominating depth
Senior managers have to guide the process
The Ongoing Challenge: Broaden, deepen, or modify competencies and capabilities in response to customer/market changes

7. The Process of Building Organizational Capabilities: Step 1
Step one is to
Select people with relevant skills/experience
Broaden or deepen individual abilities as needed
Mold the energies and work products of individuals into a cooperative group effort
to create organizational ability

8. The Process of Building Organizational Capabilities: Step 2
As experience builds, such that the organization learns to accomplish the activity consistently well and at acceptable cost, the “ability” translates into a competence and an organizational capability
Capabilities emerge from establishing and nurturing collaborative working relationships between individuals and groups in departments and between a company and its external allies

9. The Process of Building Organizational Capabilities: Step 3
If mastery is achieved to the point where the organization has the capability to perform the activity better than rivals, the “capability” becomes a distinctive competence and holds potential for competitive advantage
This is the optimal outcome of the capability-building process!!

10. Strategy and Organization Structure
Few hard and fast rules for organizing
Main rule: Structure must support and facilitate good strategy execution
Each firm’s organization structure is idiosyncratic, reflecting
Prior arrangements, internal politics
Executive judgments and preferences about how to arrange reporting relationships

11. Matching Organization Structure to Strategy: The Steps to Take
1. Pinpoint critical activities and capabilities
2. Decide which activities to outsource
3. Decide which activities require “partners”
4. Make primary, internally-performed activities the main building blocks
5. Determine degree of authority to delegate
6. Establish ways to achieve coordination
7. Assign responsibility for managing relationships with outsiders

12. Strategy-Driven Approaches to Organization Structure
Functional and process specialization
Geographic organization
Decentralized business units
Strategic business units
Matrix structures

13. A Traditional Functional Organizational Structure
General Manager
Research &
Development
Manufacturing
Human
Resources
Engineering
Marketing
Finance &
Accounting

14. A Process-Oriented Functional Structure
General Manager
Foundry &
Castings
Screw
Machining
Inspection
Customer
Service
Milling &
Grinding
Finishing &
Heat Treating
Loading &
Shipping
Billing &
Accounting

15. A Geographic Organizational Structure
CEO
Corporate
Staff GM
Europe
Latin America
North America
Asia Pacific
Central Asia &
Africa
Marketing &
Distribution
Production
Engineering &
Prod. Design
District

16. A Decentralized Line-of-Business Organization Structure
CEO
Corporate
Services GM
Business B
Functional/Process
Departments
Business A
Business C

17. An SBU Organization Structure
CEO
Corporate
Services
Group VP
SBU I
Group VP
SBU II
Group VP
SBU III
Strategically Related
Business Units
Strategically Related
Business Units
Strategically Related
Business Units

18. A Matrix Organization Structure
Head
Manufacture
R&D
Venture
Manager 1
Marketing
Finance
Manager 2
Manager 3
Manager 4
Specialists
Production
General Manager

19. Perspectives on Organizing
All the basic organization structures have strategic advantages and disadvantages
There is no ideal organization design
To do a good job of matching structure to strategy
Pick a basic design
Modify as needed
Supplement with coordinating mechanisms and communication arrangements

20. Characteristics of Organizations of the Future
Change &
Learning
Fewer boundaries between
Different vertical ranks
Functions and disciplines
Units in different geographic locations
Firm and its suppliers, distributors, strategic allies, and customers
Capacity for change and learning
Collaborative efforts among people in different functions and geographic locations
Extensive use of digital technology