Overcoming Barriers To Strategy Formulation & Implementation

Overcoming Barriers To Strategy Formulation & Implementation Ron Robinson, B.Sc., MBA, CPF, CIM, CMC President, ABARIS Consulting rrobinson@abariscons...
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Overcoming Barriers To Strategy Formulation & Implementation Ron Robinson, B.Sc., MBA, CPF, CIM, CMC President, ABARIS Consulting [email protected] For many organizations, the mere thought of engaging in the formulation of organizational strategy (i.e. strategic planning) results in a lot of eye rolling. This article outlines common barriers organizations face in formulating and implementing strategy and a few ideas on how to overcome them.

Reasons for Avoiding Strategy There are many reasons organizations don’t formulate a strategy, some are conscious, others are not and come from a variety of areas within your organization. Some of the reasons we’ve heard over the years include: “I’ve been through these processes before they are just a waste of time and money”. “My staff is already working at capacity just trying to keep up with day-to-day work, how can we ever find time to plan?” “I don’t have time to do my current work, if we plan there will just be more things for me to do – and I won’t have time to do them either!” “Our organization is doing fine we’ve hit all our objectives so what’s the point of planning?” “We can’t even forecast our budget accurately over the next 12 months how can we possibly have any meaningful impact thinking about 3 years from now?” “We just can’t gather the information we need to formulate a strategy at this time.” “Our environment is just too unpredictable – we can’t plan for the future.” “We’ve been fine – we manage our organization through our annual operating plan.” And so the objections go. While many objections are based on past negative experiences, many are also symptomatic of more fundamental issues. We call these core barriers. 1|Page

Core Barriers The single largest underlying core barrier to strategy formulation and implementation is “change”. Strategy is ultimately about the allocation of resources to those areas that the organization will have the greatest ability to fulfill its mission and move towards its vision. Consequently, strategy has the potential to have a significant impact on the way the organization behaves. These potential changes can be highly disruptive to the status-quo and are generally unknown at the time the commitment is made to undertake the strategy process. In other words, what we find is that many of the barriers to planning are a result of potential or perceived changes to the status-quo. Establishing a strategy formulation process that addresses the core barriers as part of the process substantially improves the effectiveness and efficiency of implementation. In other words, the effective and efficient implementation of strategy starts with the correct process for the formulation of strategy. We have found the following high-level interconnected framework “People, Process, Systems and Structure” (PPSS), beneficial to gain a better understanding of the potential core barriers and enable an appropriate strategy formulation process to be developed. People Regardless of what “business” you’re in, it ultimately comes down to people to get results. An individual’s primary connection to the organization is through their role; that role allows them to meet a variety of personal needs; from providing income for food and shelter to selfactualization. With such a significant personal stake, it is easy to understand how anything that could negatively impact upon their role would have a significant negative impact on their willingness to support it. For example, an organization develops its strategy and determines that its doing to move from a divisional structure to a “customer” focused structure. That may not seem like a big issue but when people stop, think and realize that purchasing and accounting will now be centralized as opposed to being within each division, here are a lot of people who start worrying about their jobs.

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Processes Processes are those methods by which we leverage the organization’s systems, people and structure to undertake the delivery of tasks. Process is the inherent glue that ties the current systems, people and structure together. Consequently, any change in strategy could potentially have a significant impact on the processes. For example, an administrative person has the role of data entry of all “customers” and “prospects” into a database.

However, with the

centralization of some processes like purchasing and accounting this process will become automated and this administrative role becomes part-time. Systems Systems relate primarily to the technological systems of the organization. An organization’s systems are built to improve the efficiency and effectiveness of what is currently being done. These systems accept data in specific formats at specific times and translate that data into certain types of information in pre-determined formats.

Therefore, existing systems

infrastructure is generally focused on sustaining the current state of affairs. While new and more open forms of information management have been developed, the possibility of change can have a preponderance of implications. For example, it could impact the function of an individual’s job or result in a significant financial investment to upgrade the systems, which could draw funds away from another project that is of considerable importance to another area in achieving their objectives. Structure Structure represents the organizational structure through the definition of roles and reporting relationships, rewards and governance structure. We have often seen and facilitated changes to an organization’s governance and operational structure to better align it with the new direction developed as part of their new strategy.

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A Few Soft Issues The previous framework outlines the functional implications that can be considered as part of the strategy formulation process. While these can provide some insight into the barriers to effective and efficient strategy formulation and implementation, it does not tell the whole story. There are also a variety of soft issues. Soft issues are those areas of concern that we all have from time to time but rarely speak of, especially to our boss. If we are going to be successful in overcoming the barriers to effective strategy formulation and implementation, we need to also be aware of these soft issues. History Of all the barriers, our experiences are probably the most influential. Those who had a negative experience with the formulation and / or implementation of strategy are naturally biased against undertaking such an activity again. One way to help mitigate this is to identify and gain support of influential champions within the organization that have had success with strategy in the past and can effectively communicate that success through stories. Power & Influence The current organization and the way it operates provide some people with greater power (formal or informal) and in turn influence. Significant levels of power & influence provide us with a sense of control over our own destiny. Any change in strategy that could result in organizational change that may diminish or disrupt that power and influence are generally opposed. Conversely, those that see potential changes that would increase their power and influence are generally overly supportive. You need to be aware of this and what message you are sending when you choose your champions to help mitigate the issues of past negative experiences outlined in the previous paragraph. Organizational Problems Undertaking strategy formulation can highlight existing organizational problems.

In

organizations that have a budgeting process that allocates resources among several units, any issues between these units can become amplified as the strategy formulation process seeks to set priorities for the allocation of resources. In addition, individuals may feel responsible if

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organizational issues are raised in the planning process and consequently want to put off the planning until the issue is resolved. Creating a safe and team supported approach to strategy formulation can go a long way to addressing these issues. Operational vs. Strategic Focus Senior management teams are generally rewarded for “getting things done”. They have learned that keeping the day-to-day business working effectively and delivering upon their operational objectives leads to reward (qualitative and / or quantitative) and new and better career opportunities. It can then be difficult for some to appreciate the benefit of longer-term thinking and the delayed results and associated rewards provided with longer-term strategic horizons. Executive compensation systems are often tied to short-term results. This ensures that many decisions maximize short-term effects. Consistent with the strategy formulation process is the communication process that helps participants understand that current reward systems will also change as required in order to illicit the appropriate behaviors. Personal Receptivity to Change We all have our own personal comfort level with change. For some people their resistance to change is nothing more than their personal discomfort for change.

Understanding key

individual’s personal receptivity to change allows you to manage the process accordingly. We have found that using simple assessment tools to help key individuals understand their receptivity to change, supporting those individuals and incorporating that knowledge into the strategy implementation process goes a long way in enabling both the individual and organization to achieve their objectives. Decision Making The ability to collect timely and accurate information and make decisions is a powerful attribute in any organization. This type of ability to retain control over decision-making is consistent with the concepts of “power and influence” outlined above. There is, however; also the issue that strategy can generate new ways of doing things that can allow and support new ways of evaluating. Some individuals have difficulty changing the evaluation process and may see it as a criticism of previous decision-making behaviors. Using appropriate organizational performance

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indicators, aligned and linked to department, team and individual scorecards can effectively address these types of issues.

Overcoming the Barriers The better you understand your organization and the core barriers that exist to strategy formulation and implementation the better you’ll be able to address them. The key is to realize that the formulation process is the first step in the implementation process. Think about the whole strategy process with the end in mind; i.e. effective implementation of a strategy that improves and accelerates the performance of your business. Following are a few of the key areas we have found important when thinking about your strategy process. Leadership The drive to formulate and implement strategy must be supported by the organization’s senior leadership (i.e. “C” level). This sends a strong signal of the importance of the process, which often improves the level of acceptance. Communication When it comes to the strategy process, communicate what you are going to do, why you are doing it, how people will be involved in the process and the expected timelines. As well, it is important to commit to provide updates on a regular basis of how the process is going and what has been achieved. In the absence of information, people will make it up themselves. Whatever people make up is usually a worse-case scenario. This communication process can take a variety of forms including meetings, newsletters, town hall forums, etc. Incorporate a communication strategy as part of your overall strategy process. Manage the Change Process Effective change management will not eliminate all the concerns but it will help keep them to a tolerable level and allow the organization to continue without significant loss of productivity. As above, incorporate a change management process into your strategy process.

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Reward Supportive Behavior It’s not enough to focus on the barriers to strategy. You should also reward behaviors that support the strategy process. For example, in hearing about the start of a strategy formulation process, a department head meets with her staff to discuss ideas on how they can backfill positions so as to allow as many staff as possible to participate in the process. No Time Is Ever Perfect No matter when you undertake a strategy there will always be other initiatives going on or information that isn’t available. Although strategy formulation is often positioned as though you are starting with a blank canvas, the reality is that you are not. It is important to get on with it. In the long term your organization will be far better off getting on with the strategy and associated changes that come of it than constantly putting it off for that elusive perfect time. Organizational Size The size of the organization can have a significant impact upon the number and depth of barriers to strategy. Generally, the larger the organization and longer it has existed without dealing with a major change or undertaking a strategy formulation and implementation process the greater the challenges.

Disclaimer This article is provided for information purposes only and is not intended, represented or to be inferred as providing advice. ABARIS Consulting Inc. makes no warranty, express or implied, or assumes any legal liability for accuracy, completeness, or usefulness of any information provided in whole or in part within this article.

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