1. Formulation vs. Implementation
It's one thing to have a great plan, it's another to make it happen.
- Formulation is the 'thinking' part. It's an entrepreneurial and intellectual process. It's about effectiveness (doing the right things).
- Implementation is the 'doing' part. It's an administrative and operational task. It's about efficiency (doing things right).
A brilliant strategy with poor execution will fail. Success is a combination of a sound strategy and excellent implementation.
2. Strategic Change
Implementing a new strategy always involves change. A useful model for managing this is Kurt Lewin's:
Three Phases of Change:
- Unfreeze: Prepare for change. Make people aware of the need and break down old habits.
- Change: Implement the new strategy. This is the action phase where new behaviors and processes are introduced.
- Refreeze: Make the change permanent. Reinforce the new ways of working until they become the norm.
3. Digital Transformation
This is a fundamental strategic change using digital tech to create new business processes or products.
Example: A bookstore chain closes physical stores and launches a successful e-commerce platform with an e-reader app. This requires a massive change in operations, marketing, and culture.
Effective change management is crucial for this to succeed.
4. Structure & Culture
The "hard" and "soft" sides of an organization must support the strategy.
Organization Structure (Hard):
The formal hierarchy. The rule is: "Structure follows strategy." You must design your organization to facilitate your strategy.
Organization Culture (Soft):
The shared values, beliefs, and behaviors. "The way we do things around here." A culture can be a powerful ally or a major obstacle to executing strategy.
5. Types of Org. Structure
Different strategies require different structures.
- Simple: For small businesses (owner makes all decisions).
- Functional: Grouped by function (Marketing, Finance, etc.).
- Divisional: Grouped by product, geography, or customer. Good for large, diversified companies.
- SBU (Strategic Business Unit): Similar divisions are grouped into larger SBUs.
6. Modern Structures
Newer structures are more flexible and adaptive.
- Matrix: Employees report to both a functional manager and a project manager. Complex but good for cross-functional projects.
- Network: A central hub outsources many functions. (e.g., A clothing brand designs in-house but outsources all manufacturing).
- Hourglass: A lean middle management layer, with technology connecting the top and bottom levels directly.
7. Strategic Leadership
Leaders are crucial for driving implementation.
Two Key Styles:
- Transactional: Focuses on control, systems, rewards, and punishments. Good for maintaining efficiency and stability.
- Transformational: Uses charisma and vision to inspire people and drive major change. They motivate followers to go beyond expectations.
8. Strategic Control
This is the evaluation part: checking if the strategy is working and being implemented as planned.
Four Types of Control:
- Premise Control: Are our underlying assumptions still true?
- Implementation Control: Are we hitting our milestones?
- Strategic Surveillance: General scanning for unexpected threats/opportunities.
- Special Alert Control: A rapid review in response to a sudden crisis.
9. Performance Measures
How do you know if you're succeeding? You need to measure performance.
Key Categories:
- Financial: Revenue, profit, ROI.
- Customer: Satisfaction, retention, market share.
- Employee: Satisfaction, turnover.
- Innovation: New product launches, R&D spending.
Modern approaches like the Triple Bottom Line also consider People (social) and Planet (environmental) performance, not just Profit.