Creating A Strategy Focused Organization

By M. Isi Eromosele

The ability to execute Strategy……..

The ability to execute strategy is more important than the strategy itself. Strategy implementation is the most important factor that shapes management and corporate valuations.

The emphasis placed on strategy and vision has come to create a misguided belief that a right strategy was all that is needed to succeed, without giving prominence to the issue of implementing that strategy.

Why do organizations have such difficulty implementing well formulated strategies? A major impediment is that while strategies, the unique methods by which organizations create value are changing, organizations have not adapted to technological and operational ways to implement and measure these strategies.

The opportunities for creating value are transitioning from managing tangible assets to managing knowledge-based strategies that deploy an organization’s intangible assets. These intangible assets include customer relationships, operating processes, employee capabilities, skills and motivation.

In today’s fast paced economic environment, where intangible assets have become vital sources for competitive advantage, specialized methods and tools are needed to define knowledge-based assets and the value creating strategies that these assets create. Companies have encountered major difficulties managing what they cannot describe or measure because they lack these tools.

Many organizations continue to operate under a centralized management system, with large functional departments. Strategy cannot be wholesomely developed and implemented through a centralized command and control structure.

Change should be implemented innovatively, enabling managers to use tactical management methods to execute corporate wide strategies. Today’s organizations must operate through decentralized business units and teams that align much closer to the customer.

Organizations need to recognize that competitive advantage comes more from intangible knowledge, capabilities and relationships created by motivated employees, rather than from investments in physical assets. Strategy implementation must be aligned and linked to the formulated strategy itself.

With rapid changes in technology, increased global competitiveness and stronger business regulations, the formulation of strategy has to be a continual and participative process. Today’s organizations need a language for communicating strategies as well as innovative processes that facilitates the implementation of these strategies.

Exclusive reliance of financial measurements in a management system is short-sighted and can cause an organization to make the wrong strategic decisions. Mono reliance on financial indicators result in short-term decisions that sacrifice long-term value creation for short-term performance.

A more effective approach would be to retain measurement of financial performance as well lagging indicators, while supplementing them with performance measurements of drivers and lead indicators of future financial performance. All financial and non-financial measures and objectives should be derived from an organization’s vision and strategy.

The measurement linkages of cause and effect relationships in strategy show how intangible assets are transformed into tangible financial outcomes. Intangible assets usually have little stand-alone value. Their values rise when they are embedded in coherent, linked strategies.

An organization’s use of quantitative, but non-financial measures such as market share, innovation, customer satisfaction and staff competencies allows value-creating processes to be better understood and measured, rather than inferred

M. Isi Eromosele is the President | Chief Executive Officer | Executive Creative Director of Oseme Group - Oseme Creative | Oseme Consulting | Oseme Finance

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