Strategy Implementation summary of all
articles and lectures
By Michel Dagli
1
,Inhoud
Lecture 1 – Introduction .......................................................................................................................................................................... 3
Lecture 2 - Change management (leading change) ................................................................................................................................... 5
John P. Kotter, 2007: Leading Change: Why Transformation Efforts Fail ................................................................................................... 12
Ryan L. Raffaelli, 2017: Organizational Behavior Reading: Leading Organizational Change ...................................................................... 15
Lecture 3 - Structure ............................................................................................................................................................................. 22
Structure: key concepts .............................................................................................................................................................................. 22
Organization Design: .................................................................................................................................................................................. 26
Design to Perform ...................................................................................................................................................................................... 29
E. Bernstein & N. Nohria, 2016: Note on Organization Structure. .............................................................................................................. 31
Robert Simons, 2007: Designing Organizations for Performance: The Alignment of Design and Strategy. ................................................ 34
David Krackhardt & Jeff Hanson, 1993: Informal Networks: The Company Behind the Chart. ................................................................... 39
Lecture 4 - Incentives ............................................................................................................................................................................ 41
Incentives (= stimulans) .............................................................................................................................................................................. 41
Incentive design – concepts ........................................................................................................................................................................ 42
Incentive design – Implementation ............................................................................................................................................................ 44
Brian Hall., 2006: Incentives within Organizations. .................................................................................................................................... 46
Steven Kerr, 1975: On the folly of Rewarding A, While Hoping for B .......................................................................................................... 50
Duncan Brown, 1993: Centralized Control or Decentralized Diversity: A Guide for Matching Compensation with Company Strategy and
Structure. ................................................................................................................................................................................................... 51
Lecture 5 – Control Systems .................................................................................................................................................................. 52
Issues of control ......................................................................................................................................................................................... 52
Levers of control framework ...................................................................................................................................................................... 54
R. Simons, 1995: Control in the age of empowerment ............................................................................................................................... 57
Cammann, C., & Nadler, D. A. (1976): Fit Control Systems to Your Managerial Style................................................................................. 61
From Strategy to Implementation: Seeking alignment ............................................................................................................................... 65
Robert Simons, 2016: Aligning performance goals and incentives ............................................................................................................. 68
Evolution toward fit – Nicolaj Siggelkow (2002)......................................................................................................................................... 73
Lecture 6 – Performance Measurement ................................................................................................................................................. 74
Goals setting .............................................................................................................................................................................................. 74
Performance measurement........................................................................................................................................................................ 75
M. C. Mankins & R. Steele (2005), Turning Great Strategy into Great Performance. ................................................................................. 80
Measuring Performance. Books/Chapter. Pocket mentor series. ............................................................................................................... 82
Kaplan, R. S., & Norton, D. P. (1996). Using the balanced scorecard as a strategic management system. ................................................ 85
Kaplan, R. S., & Norton, D. P. (2004). Strategy maps: converting intangible assets ................................................................................... 87
into tangible outcomes. (only chapter 2) ................................................................................................................................................... 87
Lecture 7 - Tools & Systems for Implementation (budgeting) ................................................................................................................. 95
Budgeting ................................................................................................................................................................................................... 95
Using budgets – variance analysis ............................................................................................................................................................. 96
Robert Kaplan and Bjorn Jorgenson. Borealis........................................................................................................................................... 101
David W. Young. Note on Flexible Budgeting and Variance Analysis. ...................................................................................................... 104
Jeffrey Pfeffer. 2007. The Real Budget Crisis: Stop Rewarding Forecasting and Negotiating Instead of Real Performance .................... 108
Lecture 8 Organizational culture.......................................................................................................................................................... 109
Organizational culture ............................................................................................................................................................................. 109
Culture for performance ........................................................................................................................................................................... 115
Sorensen, J, 2009: Note on Organization Culture. .................................................................................................................................... 117
Groysberg, B., Lee, J., Price, J., & Cheng, J. Y.-J. (2018). The Leader’s Guide to Corporate Culture. (cover story) ..................................... 120
Chatman, J. A., & Cha, S. E. (2003). Leading by leveraging culture. California ......................................................................................... 124
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,Lecture 1 – Introduction
Challenges for strategy implementation
1. Different scope than analysis
2. Need for coherence
3. Complexity
a. Interactions
b. Number of elements
Scope
Here the goal isn’t strategy formulation, but strategy
implementation, this is fundamentally different from
strategy creation. Implementation looks at the practical side
of strategy. (how can you implement it, what types of
controls and management style should be used, etc.)
Strategic planning is the process of deciding on the
programs that the organization will undertake and on the approximate amount of resources that will
be allocated to each program over the next several years (Anthony & Govindarajan, 2007).
Coherence
There is a need for coherence, meaning that different elements within a company are interrelated
and should focus on the same strategic goal. This can also be checked by using an alignment
checklist:
3
,Complexity
Certain aspects of a company don’t comply with the strategy, making it more complex, and the
business needs to be revised
E.g. RyanAir with low pricing but high customer service; this leads to high
costs and doesn’t comply with cost leadership:
- First rate customer service – not correct, Ryanair has currently a
low focus on this. Before they had a high focus on this which was
not coherent with low cost focus / fares. That why they went
bankrupt. Afterwards, they removed the focus on first rate
customer focus.
Requirements for strategy implementations
1. Knowledge – Information
2. Change management - (Motivation – Control –
Organization), this all leads to:
3. Performance
Knowledge
There are two types of knowledge:
- internal (process, competences, people) and
- external (customers, partners, competitors).
When it comes to information needs, top management
gives a strategic domain and intended strategies and plans
to lower levels of the organization, and this lower level
offers information in regard to progress in achieving these
intended strategies, and emerging threats and
opportunities.
However, there is a fine line between value adding information,
and value decreasing information. There is this pivot point
where providing more and more information will lead to less
value (think of when a teacher keeps on telling more and more,
at one point you reach a limit to what you can remember).
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,Lecture 2 - Change management (leading
change)
The main focus of strategy implementation is on change
management, i.e. how do you lead a company into strategic
change.
The pace of business is accelerating, and companies must change in
response. Yet 50-75% of change programs fail. The time-tested
fundamentals of change management - practices focusing on
leadership, employee engagement, governance, and executional
rigor - remain as essential and powerful as ever.
Reverse mentoring is what firms are using now when change has to happen, which happens when a
younger and older employee are put together to learn from each other (agile vs knowledgeable).
What drives change?
As the rate of change in the business environment continues to increase, the premium on
organization’s being able to change is growing ever more significant. The challenge of organisational
change is that companies are built to be stable, at a result, most attempts to design and manage
organisational change tend to fail.
5
,Formulaic Approach to Strategic Change
Context-Sensitive Approach to Change
There are two basic types of change
- Reactive Change - high urgency
o Closing a performance gap (what is and what should be)
- Proactive Change - low urgency
o Closing an opportunity gap (what is and what could be)
A change agent, also known as an advocate of change, is a person who acts as a catalyst for the
change management process. They help an organization, or part of an organization, transform how it
operates by inspiring and influencing others.
Scenario 4 is to most simple, convince people as fast as possible
- 4: emergency, sense or urgency.
6
,There is a theoretical approach to organizational change by Kurt Lewin (socialist). Three Distinct
Organizational Change Phases:
(momentum=impuls)
Change Initiative: communicate what will happen if we not change.
John P. Kotter made this theoretical approach more practical by distinguishing 8 steps: (Kotter takes
the Lewin model but separates the 3 different stages into a bit more actionable steps):
(Consolidating improvements: verbeteringen bevestigen/samenvoegen, zoals stijging in winst en
deze investeren in employee promoties)
(Institutionalizing new approaches = invoeren / formeel maken)
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,The cost of change is determined by three factors:
1. Dissatisfaction
2. Model
3. Process
Dissatisfaction
There are various reasons for individual resistance to
change within an organization:
1. Direct costs
2. Saving Face
3. Fear of the Unknown
4. Breaking Routines
5. Incongruent Systems (incompatible)
6. Incongruent Team Dynamics (incompatible)
Dissatisfaction: Emotional energy about performance or opportunity gaps
- Communicate NEED for change and COSTS of not changing
- Performance / opportunity gap analysis (internal and external)
o Comparative data
o Contextual landscape analysis
o Benchmarking
o Employee attitudes
- Sharpen awareness of gap analysis
- Involve key people
Model (vision)
- Clear and widely understood model for change (m), or
referred to as vision
o What is being changed and why?
o Where we want to go/ what do we want to become?
- Model, Vision must be compelling and meaningful
o Appeal to logic, emotion and values
There are three main characteristics for effective change models / visions:
1. Desirable
• Satisfies stakeholders
• Motivates employees
2. Feasible
• Opportunity for short team wins
• Realistic stretch
3. Relevant
• Contextually sensitive
8
,Process
The pace of change can be two ways: directive or
persuasive:
- A directive approach will be used in case
of urgency, low resistance, high level
support and when changes are clear.
- A persuasive approach on the other hand
will be preferable when there is no crisis,
there is a high need for commitment and
the change is not really clear but more
complex. (persuasive=overtuigen)
Key Change Lever Attributes in the Simulation
Six Types of Change Levers
- Enabling (inshakelen) – These levers raise awareness for targets
o Credibility (geloofwaardigheid) (e.g., invite external consultant to extoll change)
o Communication (e.g. initiate town hall meeting)
o Training (e.g. provide external training experience)
- Substantive (inhoudelijk) – These levers facilitate adoption by targets
o Technical (e.g., align the reward system to with change initiative)
o Political (e.g., face a private confrontation with a resister (not follower)
o Cultural (e.g., tell a success story)
9
, Lever Deployment Effectiveness
Lever Effectiveness = Function
- Urgency of the Situation
- Change Agent Formal Authority and Credibility
- Timing of Deployment,
- Change Target Receptivity
Key assumptions
- Change process = learning and unlearning
- Change requires motivation
- Organizational change means first individual change
- Change is painful and threatening
- Change happens by stages
o 1 unfreezing or creating the motivation to change
o 2 changing or developing new attitudes and behaviors on the basis of new
information
o 3 refreezing or stabilizing the changes
Contextual nature of change
1. The urgency to discard the old and embrace the new order;
2. The power and credibility of the change agent vis-à vis key stakeholders;
3. The change targets’ receptivity to the initiative.
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