Barriers to Successful Strategy - Essay Example

STRATEGY IMPLEMENTATION According to Dyer and Singh (1998), a strategy execution process requires as much attention as planning. The implementation of strategies might turn out to be difficult given that the organization is large or complex but, in either case, monitoring and controlling the execution process of strategies in vital to the organization. Complex strategy implementation become a confusion to implementers and might also call for additional resources in forms of human, time and financial resources for successful implementation. Dyer and Singh (1998), refers to such situations as complex decision making strategies which require to be high attention during the implementation of strategies although it might take longer to implement and require more attention from employees and manager, its implementation will see the profit margin of an organization increase tremendously. Kaplan and Norton (2001), also identify the importance of strategy execution and describe strategy execution as of equal importance to the strategy itself. Paul Nutt (1999) also studied the matter and explains that more than half of the decisions made in organization result in failure mainly due to wrong execution of a strategy in the implementation phase. BRF is one such company that has identified the importance of monitoring and controlling its strategy execution process. This paper will discuss the common barriers to successful strategy implementation and how such barriers might be overcome using BRF’s strategies implementation as a case study. According to research by Kaplan and Norton (2008), 70% of failures in the execution of a strategy is from the bad implementation, not the strategy itself. They identified four major barriers to the execution of strategies such as lack of vision, resource barrier, management barrier and people barrier. In addition to the four barriers, Jones (2008) and Kaplan and Norton (2008) emphasize the importance of a communicating strategy due to its critical value of aligning individuals and organizational units. Alexander (1985) conducted a study to identify key obstacles to successful implementation. His study identified five key obstacles which are: i. Key tasks and objectives are mostly not defined or where defines are not defined in enough detail to enable successful implementation. ii. Communication problems exist in most organization whereby communication to top level management about problems requiring their intervention was not done fast enough to facilitate the implementation of the strategies. iii. Changes in responsibilities and roles are mostly not clearly defined thus leaving implementers confused thus failure of the strategy. iv. The key formulators of the strategic decision did not play an active enough role in implementation. v. In most organizations, major problems surface during the implementation of strategies many of which had not been identified and planned for beforehand. According to Laurence Hrebiniak’s (2006) reflections on strategy implementation, he identified that in most organizations: Managers are trained on how to plan strategies, not execute them. Managers in most organizations have the know-how on how to plan and develop strategies that would uplift an organization but mostly they lack the technical know-how of how to implement their strategies to achieve the intended organizational goals. This is a failure in the education systems because all major MBA programs pay attention to the formulation of strategies, not their implementation, they leave the implementation part to be gained as part of the on-the-job experience. Top level management task and duties are to plan while the implementation is left to the operational level employees. In most organization, top-level management’s task and duties direct them to aim at planning and thinking strategically thus they develop the most effective strategy for the organization while the implementation part is left to operational level employees who might not have the technical knowledge on how to implement the developed strategy effectively. This creates a separation between the management and the operational level employees increasing the chance of failure in the implementation and execution of the strategy (Raes, Heijltjes, Glunk & Roe, 2011). Planning and execution are considered interdependent. Planning and implementation phases in most organizations have been considered as independent phases and hence separated from each other. This separation brings about confusion and lack of proper interpretation since planning affects the execution of the strategy as it determines what is most appropriate while the execution affects the changes to be made in the strategy and planning phase over time. Thus when the two are separated, and proper communication channels are not in place, the implementation of an organization’s strategy results in failure. The implementation phase of a strategy takes longer than the formulation. Most companies fail to consider that the execution and implementation of a formulated strategy require more time. They consider that the implementation should be carried out as fast as the formulation of the strategy took. Failure to consider such facts leads to failure in the implementation as it is rushed. For those organizations that consider it takes longer, the execution might fail due to the lack of focus and control of the execution process due to the long time frame it requires to take full effect. Strategy execution phase involves more people than the formulation phase does. This presents additional problems in that the communication across the different functions to implement become a challenge due to the high number of personnel involved in the implementation. Due to this, linking of strategic objectives with the day-to-day activities in an organization at different organizational levels turns into a challenging task that is not taken into consideration when planning and implementing the strategy might result in failure. BRF’s objectives and target in 2015 where to ensure that they increase growth and expansion in both domestic and external markets in each of their product category. Their strategic plan in 2011 that was to be executed by 2015 included the following objectives: To consolidate their position in their target markets by increasing categories, positioning their bands correctly, increasing innovation and increasing the general value share of their products especially meat products (Raisch, 2008). Increase their sales in external markets in the Middle East, Latin America, Japan, China and Africa. These involved setting up a new factory in the Middle East with a capacity to process 80 thousand tons of meat, expansion of production of processed products in Latin America, strengthen the Sadia line of products in Japan, China and Africa and explore new markets in Africa. According to BRF’s (2011) Annual sustainability report, the organization established pillars to aid in the successful implementation of its strategic plan which were developed on the basis of the company’s principal impacts on society and the company’s ambitions. The six pillars established include: i) Total obligation to sustainability; ii) Increased focus on the sustainability of the value chain; iii) Engagement with company stakeholders; iv) Promotion of sustainable consumption; v) Enhancement of human capital; and vi)Adaptation to climate changes. Based on the pillars above a clear understanding of the company’s organizational structure is revealed. The pillars show that the company has taken into consideration various factors that hinder the successful implementation of a formulated strategic plan. However, the strategies adopted do not completely eradicate the problem of strategy implementation failure thus more needs to be done. Recommendations The organization needs to consider people barriers in the formulation and implementation of its strategies. This can be done through calling meeting and arranging conferences involving the organization's key stakeholders to assess the company’s formulated pillars and take their opinions and additions into consideration hence eradicating the communication barrier between the top level management and the operational-level management in the organization as described by Alexander (1985). This move will completely eradicate the barriers that Alexander (1985), Jones (2008) and Kaplan and Norton (2008) identified which states “communication problems exist in most organization whereby communication to top level management about problems requiring their intervention was not done fast enough to facilitate the implementation of the strategies” thus their leadership will be clearly defined and the company’s goals and objectives are discussed and worked on by the entire organization without any barriers in communication. The company should also plan on involving lower level management into the meetings to enhance communication between the lower level employees (through the managers) as they will get involved with the top level management and hence feel more accept by the company. This move is sure to eradicate the communication barrier completely and hence assist the company in pursuing its projects more efficiently. BRF has overcome the resource barrier as described by Hrebiniak (2006) concerning the duties of employees at all organizational levels, planning and execution of strategies by changing the process of developing and formulating the strategy. BRF takes involves its top level management in the development of its strategies and according to BRF (2011), the company involves its stakeholders in the development, formulation and implementation of the companies strategies. This according to Alexander (1985) is a move to curb the barrier of changes in responsibility and roles that might hinder the successful implementation of a strategy. However, the organization has not defined roles for each individual in the implementation of its strategy so there are possibilities that their team members might get confused and mix up their roles while implementing the strategy plan leading to failure thus the obstacles of unclearly defined task and objectives is not eliminated leaving more room for implementation failure. BRF can organize for follow up and role definition procedures that would enable their employees understand their duties and roles in the implementation of the company’s strategy. BRF organizers annual training plans that encompass managerial, non-managerial and executive levels. The training involves educationally focused training aimed at improving the skills of its employees in both technical and behavioural aspects in and out of the workplace. However the training lacks the functions of preparing the employees to handle innovative management practices which should be offered to both management and executive level employees to facilitate better delivery of their services in terms of promoting innovation and new business ideas to increase the company’s competitive advantage. Offering of leadership training to all members to enhance individual development and collective development plans should also be included in such training programs to ensure that the employees are knowledgeable and informed concerning the need to adhere and ensure successful implementation of the company’s strategy. This is a move aimed at eradicating the barrier of ‘lack of technical knowledge in the implementation of its strategies’ as described by Hrebiniak (2006). According to Hrebiniak (2006), managers mostly lack technical knowledge on how to implement their strategy but this applied to all employees as they are all responsible for the implementation of the company’s strategy in their levels. Since strategy execution involves more people than the formulation does, the company needs to invest in the training to ensure that each employee is technically equipped to enable easy implementation of the company’s strategy. The training can also be used to educate the employees on the company’s strategy and objectives hence they are aware of what is expected of them and their roles in the organization. BRF should perform regular checks order to assess the progress of their strategy development and to assess risks involved in the implementation and execution of their strategy. This is recommended to enable them ensure and confirm that their employees accomplish the task assigned to them and to benchmark their execution in relation to the company’s estimated profit rise to identify the effectiveness of the strategy. This move aims are curbing the barrier of execution time as described by Hrebiniak (2006) whereby a company fails to consider that the execution and implementation of a formulated strategy requires more time. The organization tends to consider that the implementation should be carried out as fast as the formulation of the strategy took or an organization considers the time but lack proper procedure to follow up on the process. In both cases the implementation fails. As for BRF, the implementation of long term strategies is vital for the expansion of the organization into new regions such as Africa, thus constantly assessing the progress of their strategy implementation will aid them in making decisions on the next move and strategy development to enable future ventures. In conclusion, although BRF has implemented some changes to its development, formulation, implementation and execution of its strategies to minimize barriers hindering the successful execution of strategies more needs to be done to ensure that the implementation of their strategies is completed fully. Based on the strategies suggested, BRF could increase its annual sales by a large margin since the accountability and responsibilities of all employees, shareholder and managers will be clearly identified and hence result in increased efficiency and consequently increase in sales and profit. Block 5 has clearly defined the needed strategic implementation methods that the company is requires to adopt in order to achieve this. Bibliography Alexander, L. (1985). Successfully implementing strategic decisions. Long Range Planning, 18(3), pp.91-97. BRF, (2011). Annual and Sustainability Report 2011. 1st ed. Dyer, J. H., and Singh, H. (1998). The relational view: Cooperative strategy and sources of interorganizational competitive advantage. Academy of management review, 23(4), 660-679. Hrebiniak, L. (2006). Obstacles to Effective Strategy Implementation. Organizational Dynamics, 35(1), pp.12-31. Jones, P (2008). Communicating Strategy. Gower Publishing Limited, Abington, Oxon, England. Kaplan, R. and Norton, D. (2008). The execution premium. Boston, Mass.: Harvard Business Press. Raes, A, Heijltjes, M, Glunk, U, & Roe, R 2011, 'THE INTERFACE OF THE TOP MANAGEMENT TEAM AND MIDDLE MANAGERS: A PROCESS MODEL', Academy Of Management Review, 36, 1, pp. 102-126, Business Source Premier, EBSCOhost, viewed 5 April 2015. Raisch, S 2008, 'Balanced Structures: Designing Organizations for Profitable Growth', Long Range Planning, 41, 5, pp. 483-508, Business Source Premier, EBSCOhost, viewed 5 April 2015. The Open University, (2014). B301 Making sense of strategy: Block 5 Strategic implementation. 1st ed. Walton Hall, Milton Keynes MK7 6AA: The Open University. Read More