You must have noticed that markets change over time. There's an even greater variety of more and more innovative products, and customer behaviour and demand for certain goods and services have changed. Therefore, companies have to change their strategic direction in order to adapt to the new environment.
Strategic implementation plan
What is a strategic implementation plan? Srategic implementation is the process of turning plans into action using a specified strategy. It requires careful planning and project management skills. Strategic implementation focuses on aspects such as time, quality, quantity, and information.
Strategic implementation process
The strategic implementation process includes concrete steps. There is also a document called strategic implementation plan (SIP) which outlines the activities and decisions that are essential for implementing the strategy. There are five strategic implementation steps:
Define your goals
First, the business should identify the goals that the new strategy should achieve. The business needs to be clear about what its goal is, otherwise it will never be able to achieve it. Moreover, it is important to think rationally and set objectives that are achievable. This will save time spent trying to achieve unrealistic goals.
Do the research
Gathering all the information regarding the project and deeply analysing them. This will allow the organization to understand its needs and evaluate possible opportunities and threats.
Create a strategy
Owing to the research that has been done in the previous steps, the business is now ready to form an appropriate strategy. It is important to determine what the enterprise already has and what else it needs. The business should think about how it can look for external resources, try to solve any issues and then start formulating the strategy.
Implement the strategy
This is probably the most challenging part of the process as it is the action stage of the strategic management process. Even though the organization might have created an excellent strategy, it still needs to implement it. Managers should make sure that the work is delegated and everyone within the firm is made clear of their responsibilities and duties. What is more, it is important to bear in mind that strategies might not work and therefore might need to be restructured at some point.
Evaluate and control
As a final step, organisations should look back on the entire process and think about how it went and measure the performance. Perhaps some things might have been done better and could be improved in the future. Moreover, even though the organisation might have succeeded it is important to keep an eye on the strategy, monitor how it is developing and determine whether the enterprise is moving towards the goal.
Network Analysis
Network analysis is a defined plan of strategic implementation. It shows the complexity of a project including the order of activities, their estimated duration and the earliest date of later stages to start.
The analysis is conducted to avoid delaying, minimize resource waste, satisfy customers and increase profitability.
Imagine a barbershop that wants to change its strategic direction by adding a women's haircut to its offer. There are several activities that need to be completed in order to make this happen. For example, the owner needs to do market research to identify if there would be a demand for such a service. Moreover, the staff has to be either retrained or a new staff has to be hired. There is also a need for new equipment in the salon.
Before implementing the plan, the owner has to identify which activity to start with as there is no point in buying equipment if there is no demand for women's haircuts in the market. Also, before retraining barbers or hiring new employees, the new equipment has to be bought. It is also essential to think about the timing as hiring a new hairdresser might take a lot of time whereas ordering new equipment can be completed within a couple of days. All of these activities have to be analyzed and coordinated in order to save as much time and money as possible.
Critical Path Analysis
There are two components of the critical path analysis (CPA):
Each activity is represented by an arrow running from left to right whereas each node is represented by a circle. Lines should not cross each other and nodes cannot be added before an activity ends.
Drawing from the barbershop example, suppose that it has changed its strategic direction and is now offering a women's haircut service. The business is prospering well and the owner decided to expand by opening up another salon within 64 days.
Figure 1. Critical Path Analysis Barbershop Example, StudySmarter
Based on Figure 1, we can calculate the earliest start time (EST) and the latest finish time (LFT) . While calculating, we need to think about resources that need to be provided and activities which need to be completed before moving on to the next task.
The activities start on day 0. Staff training and salon decoration can start after 40 days, this is when staff is hired and products are ordered. Arranging appointments can start on day 54 (40 + 14 = 54). The earliest when a project can be completed is day 64 (40 + 14 + 10 = 64) . In order to finish the project on time, hiring staff and product orders cannot take more than 40 days. Otherwise, staff training and salon decoration will be delayed. These cannot take more than 14 days because there must be at least 10 days for the appointments to be arranged. Marketing is the only activity that is impossible to be delayed by any other activity. Owing to the latest finish time, we are able to set deadlines which helps us identify the critical path and float time.
Critical path relates to activities that take the most time to complete.
In the case of the barbershop, the longest activities are hiring staff and salon decoration and arranging appointments. If any of these activities is delayed, the entire project will be delayed as well.
Float time (non-critical activities) is the extra time remaining for activities that take less time than others.
Here, ordering products, training staff and marketing. Since hiring staff takes 40 days and ordering products only 7, there is 33 days float time for ordering products. To sum up, total float = LFT - EST.
Strategic problems
Strategies are ways in which companies try to achieve their objectives. Unfortunately, they happen to fail as there are many difficulties regarding strategic decision-making and implementation. Firstly, there is a lot of uncertainty when it comes to deciding on what strategy to follow. It is simply hard to decide as it is unpredictable which strategy will be the most successful. Secondly, even if the right strategy has been chosen, it might be hard to make it happen as not everything goes according to plan.
In the case of the barbershop, was the women's haircut a good service to offer? Did the implementation go according to plan?
Planned versus emergent strategy
Planned strategy is an intended strategy based around the planning process. This is when its implementation goes according to the plan and is not interrupted.
Emergent strategy is a strategy that actually happens. This is typically when the implementation does not go according to the plan as certain modifications had to be made to accommodate unplanned changes (ie. changes in the external environment).
In the case of the barbershop, if everything went according to the plan, that is a planned strategy. However, if something changed, for example, the new salon opened up a week later, that is an emergent strategy.
Strategic drift
Strategic drift is when a strategy has not been adapted to the changing environment and is no longer suitable.
It is typically caused by management distraction which is when managers focus on other, more important things. In this case, they neglect a strategy and do not adjust it to the new situation. Strategic drift relates to opportunity cost which is what a company was able to earn, but it did not.
In the case of the barbershop, for example, if there was no demand for the women's haircut and the strategy was managed well, then perhaps a manager would adjust the strategy and try to open a hair salon for children if there was a demand for such a service.
Evaluating strategic performance
Evaluating strategic performance refers to reviewing the strategy and analyzing its outcome.
It focuses on three main aspects:
profit,
market share,
timescale.
In the case of the barbershop we could answer the following questions:
How much did the profit increase? Did it increase at all?
Did the company gain more market share?
Did the hair salon open up on time?
Value of strategic and contingency planning
It is essential to make a decision on what strategy to implement. However, in order for the decision to be implemented, it also needs to be planned. Strategic planning allows a decision to be carried out and work successfully. It allows a strategy to be planned, not emergent.
Contingency planning is simply a plan B. It is a backup that can be implemented in case something changes and does not enable the initial plan to be implemented.
In the case of the barbershop, if a company planned to fund a new hair salon from its own funds, but it runs out of money, it needs to have an alternative such as borrowing money from friends or taking out a loan.
Managing Strategic Implementation - Key takeaways
Strategic implementation is a process of turning plans into action using a specified strategy.
The five steps of the strategic implementation process are: define your goals, do the research, create a strategy, implement the strategy, evaluate and control.
Network analysis is a defined plan of strategic implementation. It shows the complexity of a project including the order of activities, their estimated duration and the earliest date of later stages to start.
Critical path analysis (CPA) consists of activities and nodes. Owing to CPA, we can identify the earliest start time (EST) and the latest finish time (LFT).
Critical path relates to activities that take the most time to complete whereas float time is extra time for activities that take less time than others.
Strategies tend to encounter difficulties regarding strategic decision-making and implementation.
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