Strategy can be translated into action through a ‘cascading’ process that requires collaboration in problem solving and communication, says an article co-authored by Professor Christoph Loch and Professor Stelios Kavadias of Cambridge Judge.
Effective strategy execution isn’t just the most senior management top-down telling staff what to do – that approach regularly fails, or gets mediocre results at best. Effective strategy execution requires firms to listen to concerns and ideas from below, and to adopt collaborative communication and problem-solving processes rather than merely setting targets, says an article co-authored by Dean Professor Christoph Loch, and Professor Stelios Kavadias of Cambridge Judge Business School.
A “cascading tree” tool for such strategy execution can help orient employees toward shared goals and emerging changes in a company’s environment, says the article in the inaugural issue of a new journal, the Management and Business Review.
“Many companies try to ensure better strategy execution by using scorecard tools,” the article says. But by creating normative lists of categories to be cascaded, these tools tend to create generic goals that the departments in the organisation then strive for, rather than sharpening the business strategy of this organisation. But strategic execution must be specific to the particular organisation. “In successful companies, managers make sure these discussions reflect a systematic dialogue: from the top down, from the bottom up, and horizontally between colleagues, teams, and business units.”
The article entitled “Making strategy execution work” is co-authored by Professor Christoph Loch, Dean of Cambridge Judge Business School; Stelios Kavadias, Margaret Thatcher Professor of Enterprise Studies in Innovation and Growth at Cambridge Judge, and B.C. Yang, Associate Professor of Business Administration at Fu Jen Catholic University in Taipei, Taiwan, who also serves as Chief Ethics Officer and adjunct Chief HR Officer at Sinyi Realty Group of Taiwan.
The article draws on research done by the authors at Sinyi Realty Group on the company’s initiative to simultaneously cultivate employees, improve service quality and boost efficiency and sales. It also draws on research into a municipal police department’s project to reduce violent crime and especially residential robberies.
The article identifies four fundamental reasons why organisations often fail to effectively execute good strategies:
- Weak top-down alignment.
- Weak bottom-up innovation.
- Limited collaboration.
- Inadequate quantitative planning strength.
The article then outlines how an effective cascading process to translate strategy into action requires a three-step process: tangible targets; identification and articulation of actions to achieve those targets; and treating each higher-level action as a “mission” for the next step down (and then “start over again” by iteratively taking the staff’s ideas and the knowledge about tradeoffs and constraints to sharpen the strategy).
“A strategy is not just a conceptual position statement; it is a battle plan that, if all employees understand and internalise it, produces alignment,” the article says. “It is therefore vital to explain the strategy to employees, not once, but continuously over time, and to adjust it to the local knowledge that the staff have.
“The time has passed when strategy was a static set of detailed goals, planned and optimised. Yet managers still know too little about how to set up and support adjustments of strategy in response to changes in the environment. One clearly demonstrated path to successful adaptation is the process we have described in this article.”