Five Dimensions of Strategy Execution
Dr. Allan W. Gray, Executive Director and Professor
Conceptualizing and Measuring the ‘Strategy Execution’ Construct. Carla Albuquerque de Oliveira, Jorge Carneiro and Felipe Esteves
Journal of Business Research, 105 (2019), 333-344
The authors conduct an extensive review of the literature, engage a panel of industry experts and implement an applied research study to define and measure the elements of strategy execution. The combination of the literature review and the panel of industry experts identified five critical dimensions of strategy execution with 26 specific actions and 18 outcome measures. The applied research component revealed that the 26 specific actions could not be correlated with specific outcomes, suggesting that the coordination of the actions around the five critical dimensions lead to more effective outcomes.
What this means for Food and Agricultural Business
Both in the classroom and inside of the focus of strategy is most often the strategy-making process. This means that the development of visions, missions, goals, objectives and the position we take in the marketplace becomes the primary focus when we discuss strategy. Strategy-making warrants focus to prepare the company to create value for its customers in ways that would be difficult for its competitors to mimic. Nonetheless, the strategy-making process leaves the company only with the concepts and ideas of how to compete and win in the marketplace. If the strategy is not well executed, the probability of success diminishes considerably.
Increasingly, agribusiness companies have begun shifting the focus to strategy execution to close the gap in the strategy process. Generally, agribusiness companies have not been good at strategy execution, in my experience. There is often a disconnect between the senior management team’s strategic intent and the day-to-day actions and behaviors of the company.
This disconnect represents a lack of coordination between strategy-making and strategy execution. Interestingly, both research and curricula focused on strategy execution is lacking. I suspect this is because, often, strategy execution is considered the domain of managers, but this lack of academic focus has made it hard to identify the critical elements of strategy execution and the constructs that allow management to focus efforts on execution. This paper helps create a focus around the elements of the strategy-making process.
Figure 1. Dimensions of Strategy Execution
Figure 1 summarizes the five dimensions of strategy execution. The unfolding dimension turns strategy ideas into specific actions with accompanying measurable goals to promote consistent effort among employees. Agribusiness companies often attempt to pursue this step as they develop a series of projects associated with their strategy. Unfortunately, I have seen too often that the goals of the projects are not well defined, and the connection to the strategy is not well understood.
The lack of understanding in the organization about the connection between strategy and projects may be due to ineffective coordination. Middle managers are often tasked with project development and oversight without having the chance to align with senior management first. The coordination element of strategy execution focuses on promoting understanding and dialogue between senior and middle management around the purpose of the strategy and the connection to specific projects.
Even if senior and middle management can coordinate to get on the same page, companies often struggle to communicate the strategy more broadly through the entire organization. Ineffective (or, often, I see nonexistent) communication of the strategy leads to confusion among employees about the direction of the company and where their efforts should be focused. In my more recent strategy work with companies, we have spent a great deal more time designing and implementing a more robust communication strategy to the broader organization.
A lack of focus on the first three dimensions of execution leads to a lack of control of the strategy. A lack of control happens for two reasons:
- A lack of clear goals makes it difficult to measure progress on the strategy and discover necessary shifts in the strategy.
- The lack of clear understanding among middle managers and employees means that needed shifts in the strategy begin to look like the “flavor of the month”, leading to apathy.
Ultimately, strategy execution happens through the people in the organization. The need to recognize and develop the company’s talent is paramount to a successful strategy. Employees must be rewarded for behaviors and actions that align with the company’s strategy. Additionally, the company’s strategy will often require a set of strategic capabilities that need to be developed for the strategy to be successful. These capabilities emanate from a combination of skills and abilities of individual people in the organization. These skills and abilities have to be identified, developed and nurtured to allow for strong execution of the company’s strategy.
Strategy-making is critical for agribusinesses seeking to position themselves for success in these volatile times. But without the ability to execute the strategy, the company is left only with good ideas that never come to fruition. Too often I meet with executives who are frustrated with their strategy efforts. Examining the critical dimensions of strategy execution and placing concerted focus and effort on developing these dimensions is the key to overcoming these frustrations. The dimensions of strategy execution are logical; however, despite the logic, the difficulty in identifying the specific dimension and understanding the collective impact of them on the success of the strategy has been missing. This research provides a nice start to formally incorporating strategy execution into our strategy process with the same level of focus and energy we bring to the strategy-making process.
It was clear before and even more so now after the events of the last 12+ months — data-driven decision making is crucial for companies aiming to remain profitable and competitive in today’s markets. However, beyond simply basing decision making on data, companies must take this a step further and fully embrace the concept of competitive intelligence to truly be successful. In the food and agribusiness industry, we are no exception to this rule.
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Using an omnichannel strategy has been understood as a potential next step after a multichannel strategy is implemented. The multichannel strategy employs many channels in which customers can choose to interact and buy from a supplier. It also has the potential to benefit companies in gaining access to new segments of the market or even interacting and selling more often to already existing customers; however, the omnichannel promise goes much further. Omnichannel marketing proposes an integration of different channels (distribution and communication channels) to offer a smooth and satisfactory customer experience journey.