Strategy Implementation The McKinsey 7S Framework
The greatest strategy is doomed if it’s implemented badly. Successful strategy formulation does not guarantee successful strategy implementation . Less than 10% of strategies formulated are successfully implemented! The Nature of Strategy Implementation • Implementation may fail due to: – Paying too much for a new acquisition – Not recognizing benefit of computers in managing information
Formulation vs. Implementation • Formulation focuses on effectiveness • Implementation focuses on efficiency • Formulation is primarily an intellectual process • Implementation is primarily an operational process • Formulation requires good intuitive & analytical skills • Implementation requires special motivational & leadership skills • Formulation requires coordination among a few individuals • Implementation requires coordination among many individuals • Formulation focuses on effectiveness (doing the right thing) • Implementation focuses on efficiency (doing the thing right)
• Altering sales territories • Adding new departments • Closing facilities • Hiring new employees • Cost-control procedures • Modifying advertising strategies • Building new facilities Nature of Strategy Implementation Implementation Activities • Varies among different types & sizes of organizations
• Shift in responsibility Nature of Strategy Implementation Management Perspectives Division or Functional Managers Strategists
Management Issues Management Issues Resources Organizational structure Restructuring Annual Objectives Resistance to Change Production/Operations
Management Issues Purpose of Annual Objectives -- Basis for resource allocation Mechanism for management (e.g. IT management) evaluation Metric for gauging progress on long-term objectives Establish priorities (organizational, division, & departmental) Resources Org structure Restructuring Resist. to Change Prod/Ops Annual Objectives Resources Organizational structure Restructuring Annual Objectives Resistance to Change Production/Operations
Management Issues Requirements of Annual Objectives Measurable Consistent Reasonable Challenging Clear Understood Timely Resources Org structure Restructuring Resist. to Change Prod/Ops Annual Objectives
Management Issues Annual Objectives Should State Quantity Quality Cost Time Be Verifiable Resources Org structure Restructuring Resist. to Change Prod/Ops Annual Objectives
Management Issues Resource Allocation enables resources to be allocated according to priorities established by annual objectives. However it may cause conflict. Is this good or bad?
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- Spring '15
- ab bhushan
- Management, McKinsey, annual objectives