Chapter 9 implementing the strategy

Strategy Implementation HCAD 5390 Strategy Implementation     Good strategic planning is not enough Process by which strategies are put into action Process details are unique to each organization and each strategy Sub-strategies, programs, action plans, policies, procedures, resource allocations, budgets, authority/responsibility delegation, teams and task forces, reward and control systems, and individual assignments Keys to Strategy Implementation    Resources and competencies Functional area sub-strategies Specific decisions and actions Resources and Competencies   Strategy implementation depends on resources and competencies possessed by the firm These include: – – – – – – – Money in certain amounts Physical space of certain dimensions Particular types of equipment Specified numbers of people with … Certain skills, capabilities, and competencies Control and reporting systems Attitude, intuition, and imagination Resources and Competencies: Systems     Collections of policies, procedures, and protocols, backed by EDP and communications equipment, and people who work with them Purpose is to simplify and regularize the performance of routine, high-volume tasks Producing results that are as uniform and predictable as possible Modern business organizations depend on them Examples of Organizational Systems      Accounting and budgeting system Management information system Manufacturing control system Compensation and reward system Planning system Resources and Competencies: Human Resources      People possess competencies and carry out details of strategic plans Personnel costs are high proportion of operating budget in health care organizations Ensure enough people in the right places with the right competencies Balance operational and strategic duties Think of strategic human resource management Resources and Competencies: Organizational Structure     Taken for granted and assumed immutable Formal framework of departments, units, and groups into which people and the activities they perform are organized Some structures are better suited to certain strategies than other structures A carefully chosen structure can give an organization a sustainable competitive advantage Organizational Structure Organizational – Selecting the structure and control systems that are most strategically effective for pursuing sustainable competitive advantage The – – design role of structure and control To coordinate strategy implementation To motivate and provide incentives for superior performance The Role of Organizational Structure Building – Differentiation in the allocation of people and resources to create value   – blocks of organizational structure Vertical differentiation in the distribution of decision-making authority Horizontal differentiation in dividing up people and tasks into functions and divisions Integration  The means used in coordinating people and functions to accomplish organizational tasks Strategy Implementation Actions (II)      Right numbers and types of people assigned Policies and procedures to guide their actions One person assigned overall responsibility for each part Progress measured and tracked Changes and adjustments when appropriate Examples of Strategy Implementation Actions (I)     Marketing campaigns – new, refocus, expand or contract, discontinue, different media, test pilots Facilities – new, expand, repurpose, close Products/services – new (create, develop, invent), redesign, add new features, discontinue Product prices – raise, lower, bundle or unbundle products Examples of Strategy Implementation Actions (II)     Operating processes – reengineer, tasks (new, reorder, combine, separate, perform differently or less expensively) Departments, offices, teams – new, refocus, discontinue, expand, split up Employees – new, transfer, retrain or develop, lay off New systems for monitoring and measuring operating performance Delegating Implementation Tasks    Best if implementers involved in planning Task content must fit expertise and skills of person assigned If right person not available? – – –  Temporary stand-in for operational duties Special training for another employee Worth hiring a new, trained employee Involve HR in strategic planning Delegation Through the Organizational Hierarchy      Functional area heads work with the managers of departments, facilities, and units Together they formulate sub-strategies to carry out the area strategies Managers break the work down into bundles of tasks for assignment to teams, task forces, and work groups (ad hoc or permanent) Programs or projects may be set up to implement specific strategic elements Tasks are assigned to individual employees Elements in a Strategy Action Plan        Policies Procedures Methods Rules Objectives Time deadlines Personnel assignments Allocation of Resources    People, space, equipment, supplies, website space, agenda time at meetings, authority, discretion, and money Money is usually the most critical strategic resource Purpose of capital expenditures – – – Replace existing capital assets Acquire new non-strategic capital assets Carry out strategic plans Choosing Strategic Capital Expenditures (I)  Identify and describe all capital spending requests – – – –  amount timing assets acquired purposes Describe non-financial benefits of each request – – – – patient satisfaction less maintenance downtime lower employee turnover speedier member enrollment Choosing Strategic Capital Expenditures (II)  Set priorities on basis of urgency factors – – – –   relevance to current operations response to legal mandate response to competitors’ moves critical element in strategic plans Project cash flows for each request Perform financial analysis of each request – – – Net present value Discounted cash flow Payback period Choosing Strategic Capital Expenditures (III)  Compare and evaluate financial and nonfinancial benefits of all capital requests –  Using standard criteria decided beforehand Decide which to fund and in what amounts Strategic Objectives and Deadlines    Long and short-term objectives Accompanied by dates for achievement Purposes served: – – – – Guide and motivate employees Basis for measuring progress and evaluating employees, particularly managers Establish priorities for each unit or subunit Basis for allocating resources Examples of Strategic Objectives    May be applied to market segments, geographic areas, products/services, facilities, operating unit May be stated in terms of sales, profits, market share, patient volume, employees hired/trained, or other metrics showing strategic progress Good objectives are measurable, challenging, achievable, publicized, consistent, time-based Potential Implementation Problems (I)       Original plan poorly conceived Took more time than planned Unanticipated internal/external problems arose Poor coordination of activities Crises or competing activities diverted attention Assigned employees lacked necessary skills Potential Implementation Problems (II)       Assigned employees were inadequately trained Insufficient allocation of resources Uncontrollable external environmental factors Inadequate lower-level leadership and direction Poorly defined key tasks and activities Inadequate monitoring of activities and progress ... culture should support the strategy  Strategy- Culture Compatibility: – Consider the following:     41 Is the planned strategy compatible with the firm’s current culture? Can the culture be easily... Leading people to use their abilities and skills most effectively and efficiently to achieve organizational objectives  Staffing follows strategy: – Matching the manager to the strategy  Executive... Leadership is the process of transforming organizations from what they are to what the leader would have them become Leadership should be – – – Proactive Goal-oriented Focused on the creation