Breaking Strategy Into Measurable Employee Actions

All organizations have strategies that help them define their approach to competing on the market. In the corporate world the development of strategy is one important aspect of executive management while successful implementation of that strategy is a second. Solid strategies, that can compete on the market, should be implemented throughout the organization creating deep alignment and competitive advantages. Breaking strategies into executive, managerial, and employee functions helps in finding an improvement blueprint.

The far majority of strategies don't fail at actual design but fail during the implementation process. As strategies are implemented throughout the organization they do not move deep enough to ensure that actions are integrated with operations. Understanding the activities needed at each level of the organization has its benefits for implementation and management.

The process of breaking down strategy into definable actions helps companies convert employee action into measurable outcomes. It provides a larger framework for understanding how each employee either contributes to or detracts from the organization. Likewise, it also offers a better understanding how departmental actions contribute to financial success.

Executive Level

High level corporate strategies are developed to define the needs of the organization and what major functions fulfill those needs. These corporate strategies help in directing departments on their major functions and goals.

Example: The fastest seating and service within the local dining market.

Managerial Level

Each department will have their own goals and functions. Managers break these goals into daily activities and actions. Managers oversea these processes to ensure that everyone is working according to the definitions of the department and the strategies that guide the department. 

Example: Employees should seat and provide drinks for customers within ten minutes of entry.

Employee Level

Employees are trained on very specific functions that might include taking customers orders, refilling machines, or greeting customers. The definition of these functions is finite and offers the ability of the employee to understand their position. 

Example: Greet the customer within two minutes by saying "hello", "welcome", or "good day".

Each level (executive, managerial, and employee) have functions that correspond to their designed spheres of influence. Each of these functions are under the control of the appropriate position. Executives offer higher level strategies, managers provide daily actionable direction to employees, and employees complete specific functions. The level of flexibility is dependent on the actual position itself.

Having a working definition of the functions and objectives of each department and position helps in managing the entire process. It becomes much easier to see how an adjustment in one area can impact the entire chain. For example, adjusting from the fastest service to the friendliest service in the local market will create corresponding adjustments at the departmental and employee levels.

Part of the strategic planning should be to understand how each individual piece fits within the large pie. It is possible to review the market and find where competitive advantages are likely to be found and then break them down throughout the organization until you get to individual actions. Such analysis and planning affords an opportunity to better align actions to strategies that produce higher results.

The Social Context and Social Cognition of Projected Strategy Formation

Strategy is not only the logical components of actions that lead to goal achievement. True strategy has significant social aspects based within the cognitive understanding of workers, stakeholders, and even customers. A paper by Vallaster and Muehlbacher (2012) outlines the social representations inherent within strategy formation and its social context of development. 

Strategic success must take into account actions, interactions, and negotiations of multiple actors. Each person realizes the strategy through his or her own vantage points and previous practices. Strategy must fit within others mental framework in order to be successful and fully implemented throughout an organization.

Strategizing takes includes 1.) narratives, 2.) actors personal interests, 3.) organizational design, culture and past practices, and 4.) market factors. Strategic development should take into account the multiple factors and their potential weight in order to be successful and navigate the social environment.

Individual context-dependent interpretations influence the way in which people make decisions. As new information is presented it changes past schemata to that which is in transition and finally to new schemata. Thus, each strategy is situation dependent on the understandings of those involved in its formation and those who are going to carry it out. It naturally changes they way they think about such strategies.

Strategy is also dependent on the internal workings and actors of an organization. Through the process of strategic development a company’s practices and cultural perceptions will affect a strategies fulfillment.  In other words, the way in which people think will influence how they see the strategy and its potential benefits for themselves. It is this self-interest that eventually produces "buy in".

As most strategies seek to find competitive advantages, the market and various outside stakeholders will create pressure on the strategy and influence its perception. As the human mind considers the effectiveness of potential strategies these external factors, will act in judgment and will naturally create pressures. Poor strategy that does not consider the external structure and pressures is likely to fail. 

The way in which society views itself and interacts with itself will influence strategy through social representations. Social representations are 1.) complex formations of knowledge that comes from social discourse, and 2.) socio-cognitive processes that come from that discourse. As something new enters into society’s awareness there is a communication process that comes to define it. In other words, society settles on meaning.

Strategies consist of core and peripheral elements. Core strategies are seen as logical and have shared cognitions based within the common perspectives of the participants (i.e. customer oriented service as a strategy).  According to the authors, the actor must believe in their realities and put those forward to others but should be willing to bend these understandings to create shared realities among a group of people. This produces higher levels of agreement. 

Each person within the strategy will have to make personal meaning from it. Therefore, each participant has sub-strategies related to their place within the strategy based within their memories and understandings (Barsalou, 1999). They use their past experiences to find meaning within the strategy and build personal sub-strategies from it. 

The peripheral aspects of the strategies include those who are not directly related to the strategy formation but may be impacted by it. For example, customers who have needs of quality and experience should have their information considered as this improves upon the strategies effectiveness. Without understanding the impact on the environment or others, it is doubtful such strategies will be fully effective. Ineffective strategies can lead to lower profits and lost marketplace. 

The authors bring forward the concept that the context strategy formation is as much social as it is logical. Logic is the center but its social aspects are the periphery. All strategic decisions must take into account the impact and perceptions of others. When stakeholders cannot make meaning or formulate a social connection to the strategy, it is unlikely to be fruitful. Without some type of personal cognitive agreement people will reject the strategy and the company's offerings.

The authors dance around the concept of social projection. Projection is a concept brought forward by Freud to describe how one unconsciously projects their traits onto another. Social projection in strategy is the idea that strategy is built from the inner and outer understandings of the maker(s) and can be projected forth into and from a group. For example, a company that is losing their financial and competitive position may rally their executives to formulate a strategy. Once that strategy has been created, it can be projected onto others within the organization in the attempt to foster action that fulfills the strategy. Social projection can lead to social behavior based upon varying factors inherent in the environment that lead to agreement or rejection.

Two Related Concepts:

Path-Goal

http://www.academic-capital.net/2013/06/using-path-goal-to-enhance.html

Organizational Alignment

http://www.academic-capital.net/2013/10/aligning-organizational-strategies-to.html

Barsalou, L. W. (1999): Perceptional Symbol Systems. Behavioral and Brain Science, 22 (1999).

Vallaster, C. and Muehlbacher, H. (2012). Strategy formation as social representation: understanding the influence of contexts on strategy formation. Betriebswirtschaft/Business Administration Review, 72 (5).

Aligning Organizational Strategies to Market Needs

Corporate competitiveness is a process that requires continually adjustment to the market to increase efficiency and effectiveness. A paper by Bhattachariya and Gibbons (1996), discusses in further depth how this environmental alignment can be achieved. By ensuring organizations are structured in a way that improves competitiveness, they can also help secure a place in the global economy.

Greater internationalization, consumer choice, fragmented markets, and short product cycles are some of the challenges organizations face.  Companies increasingly are forced to change with  environmental demands and are attempting to do this through transformation of their structure. A proper transformation should align the organization and everything within it to corporate strategies that match the market environment.

Two primary constraints influence businesses, which include the external environment and a level of performance that is sufficient to deal with that environment. To find the balance means one must find a strategy that positions the organization into a competitive stance. That strategy is a way to achieve an objective; it is a path to a goal.

The external environment is the environment, which the organization is currently working. It may be global in nature, could include the local labor market, or focus on regulatory environments. It is all of the pressures and factors found through a proper environmental scan. The performance level of the organization should be able to compete effectively in that market if there is to be success.

 The entire structure should be aligned to the environmental needs. This requires the ability to ensure processes and procedures are fulfilling the organizations functions. If these processes and procedures do not fulfill a competitive need or are not aligned to the market, then it is necessary to reduce them as waste.

Success can come through creating number of adjustments within the layers of structure and the alignment of related processes. This includes the strategy, the business unit strategies, the functional strategies, processes, and competencies/capabilities. The business unit strategies take into consideration actual functional aspects of the firm. This includes marketing, financial, purchasing, and manufacturing, etc…

Each strategy should focus on what the organization does well. If innovation is a core competency, all processes and procedures should align to the environment in a way that further enhances these abilities. For example, innovation would require a level of experimentation, collaboration, flatter organizational structure, and open-minded management, and constant communication. The organization should seek to develop processes and procedures that enhance this innovation to compete in an environment with lower product cycle times and competitive offerings.

The author does not discuss cognitive processes. As processes and procedures are learned employees naturally begin to change the way they think about proper work functions. The longer such processes and procedures are used the more they become embedded within the organizational culture and the mindset of the employees. To have a truly transformational change requires the changing of thoughts and behavior.

It is possible to make conclusions about environmental alignment as a process:

-Adjusting organizational strategy to match environmental demands. 

-Adjusting business unit (departmental) strategies to match organizational strategies.

-Create functional strategies that are in alignment with the departmental and corporate strategies.

-Adjust processes to fulfill the functional strategies, departmental strategies and corporate strategies.

-Encourage new employee cognitive and behavioral strategies that match the needs of the processes, functional strategies, departmental strategies, business unit strategies and organizational strategies.

Bhattacharya, A. & Gibbons, A. (1996). Strategy formulation: focusing on core competencies and processes. Business Change & Re-engineering, 3 (1).