Chapter 11

Strategy implementation and change

management
Introduction
• Strategic implementation dovetails the choice of an appropriate
strategy being made
• Strategic implementation is an important phase of the strategic
management process as it involves putting into action the strategy
• Implementing the strategy takes place in an environmement that is
characterised by rapid change and challenges which makes it a
daunting task
• Implementing a new strategy entails change taking place
What is strategy implementation?
• Strategy implementation can be defined as the process that turns the
selected strategy into action, to ensure that the stated goals are
accomplished. What was planned must now be executed
• It involves aligning or matching strategic leadership, organizational
culture, organizational structures, reward systems, policies and
resource allocation with the chosen strategy or strategies
• It deals with the strategic change needed in the organization to make
the new strategy work and attain the desired results
• Research shows it is easier to formulate a strategy than to implement
it as the implementation stage is not a straightforward procedure
What is strategy implementation? Cont…
• Strategy formulation differs from strategy implementation in several
ways:

Strategy implementation Strategy formulation

Thoughts are operationalised into action It’s a thinking and intellectual phase
Operations-driven and internal focus Market-driven and external focus
Requires motivational and leadership skills Requires good intuitive and analytical skills
Is not well structured, rational and controlled Is well structured, rational and controlled
Takes place at all levels of management Takes place mostly at top and senior management
levels
Barriers to strategy implementation
• Failure to possess the managerial competencies needed for strategy
implementation
• There is no alignment between the organizational structure & the
strategy.
• The information & communication systems are inadequate to report on
the progress with strategy implementation.
• The coordination of implementation efforts was not sufficiently
effective.
• The leadership & direction provided by top & middle managers was
inadequate
Barriers to strategy implementation
• Goals were not sufficiently defined & not well
understood by employees.
• The formulators of the strategy were not involved in
implementation, or left before the implementation
was complete
• Key changes in the responsibilities of employees were
not clearly defined
Strategy implementation & corporate
governance
• Strategy implementation should take issues such as social
responsibility, environmental responsibility, stakeholder
engagement & sustainability into consideration at all times.
Top management must ensure that strategy implementation
activities support the drive towards social and environmental
responsibility
Change- an implementation issue
• The people working in organizations sometimes make
it very difficult to implement strategies. Many
strategic changes have to take place. The ability to
manage change is fundamental to an effective
organisation, with managers and all employees being
supportive of, rather than resistant or hostile to, the
proposed change
The top-10 list of guiding principles for
change management
• Address the ‘’human side’’ systematically- any strategic change
creates ‘’people issues’’. Things that change include the leaders who
make way for new jobs that have to be redesigned. Employees will
obviously be uncertain & resistant.
• Start at the top- Because change is difficult for people at all levels of
an organization, all eyes will turn to the CEO & the leadership team
for strength, support & direction. The leaders themselves must
embrace change to motivate the rest of the organisation.
• Involve every layer- change should cascade through the organisation
The top-10 list of guiding principles for
change management
• Make the formal case- employees will question the extent to which
change is really needed. The articulation of a formal case & the
creation of a written vision statement are opportunities to create
leadership-team alignment
• Create ownership- by involving people in identifying problems &
crafting solutions.
• Communicate the message- outlines reasons for change
• Assess the cultural landscape- it is important that leaders 1st
understand culture & behaviors at each level of the organization.
The top-10 list of guiding principles for
change management
• Prepare for the unexpected- No change programme goes completely
according to plan
• Speak to the individual- Change is both an institutional and a very
personal one.
Strategic change
• The reason why organizations develop strategy is to take the
organization from its current position to a better position. Doing this
successfully involves strategic change.
• Strategic change includes all the efforts & actions that are taking place
to move an organization from its present state towards the desired
future state, to increase its competitive advantage & its profitability.
• Strategic change is thus an implementation of a new strategy that
involves substantive changes to the normal routines of the
organisation. It is a proactive change that must happen in
organisations to achieve their strategic goals
Types of strategic change
• Strategic change can be analyzed in terms of the nature of the change
& the scope of the change. The nature of the change can be
incremental or it can be revolutionary (fast, sudden & disruptive). The
scope of the change refers to whether change can happen in the
current organizational setting, or whether a fundamental change of
the organization is necessary
Types of strategic change
• Adaptation- the current organizational setting can facilitate the incremental
change that must happen in order to achieve the desired goals. It is only
necessary to adapt to this new situation.
• Reconstruction- The current organizational setting can handle a change that
involves a sudden alteration in the market conditions.
• Evolution- involves fundamental changes in the way the organization has to
deal with the situation. The organization must become a learning
organization to manage this change
• Revolution- the strategy involves fundamental changes as a result of sudden
& fast-changing conditions. There may be a threat, in which case the
organisation will have to implement a new strategy very fast
Strategic issues of change
• Strategic change requires that important issues be taken into account. Some of
the strategic change issues that must be managed & taken into consideration are:
• Time- how quickly is changed needed?
• Scope- what is the scope of change needed?
• Diversity- what is the level of homogeneity in the organization
• Capacity- does the organization have the capacity in terms of resources needed
for change?
• Readiness- are the employees ready for change?
• Capability- do the organization’s employees and managers have the capabilities
to implement change?
The causes of strategic change
• Environment- changes in the different macro & market environments
lead to a demand for major strategic change.
• Technology- technological obsolescence & improvements can have an
impact on the survival of companies
• Regulatory events- government regulations & environmental issues
• Business relationships- new alliances, mergers & other significant
developments resulting a new strategy may require substantial changes
in the organizational structure.
• The strategic awareness & skills of managers & employees- promotion
expectations require strategic development & growth in organisations
The strategic change process
• The issues that form part of the strategic change process include 1,
identifying the areas of change, 2 how to manage resistance to
change, 3 how to use power & influence to persuade people to
support change, 4 how to be a learning organization.
1 identifying the areas of change- is done through the process of
environmental analysis & it leads to a new strategy & change. Change is
primarily associated with employees & the tasks that must be
performed. Broadly, the areas that need to be changed as a result of a
new strategy will include technology, operations, administration(new
structures & policies, budget & reward systems) & people(training).
The strategic change process
2 managing resistance to change- the decision to re-engineer new
business processes & to restructure an organisation requires the
establishment of new roles & authority relationships among managers
& subordinates. This effect of change thus disrupts normality.
• The fact that employees are expected to be more flexible & work
harder in tough times stresses them, then they start to resist change
 The strategic change process
Resistance to change
Reasons for resistance How to overcome resistance

Opposing strategic proposals Involve employees who have the highest resistance

Pessimism/doubt Build support networks

Anxiety & lack of interest Use effective communication & discussions

Different personal ambitions Give incentives

Irritation with the new (old) things Use managerial authority ( if nothing else helps)
Ways of overcoming resistance to change
• Education & communication- it helps people understand why it is
necessary to change. The reasons for strategic change must be
communicated in such a way that the importance of change is
clearly understood
• Participation and involvement-if people are part of the strategy
formulation process, they will be more supportive of the strategic
changes that are necessary to implement the new strategy
• Facilitation and support- supporting change
• Negotiation and agreement- linked to incentives and rewards
Ways of overcoming resistance to change
• Manipulation and cooptation- manipulation is an attempt to
influence or force people into accepting the necessity for change.
Cooptation can involve the ‘’buying off’’ of informal leaders by giving
them personal rewards to accept & promote change.
• Giving clear direction- authority may be used to set the direction and
impose the necessary means to implement the change
• Explicit and implicit coercion- coercion will not result in a long term
commitment from employees.
Power & influence
• The next step in managing strategic change is persuading organizational
members to support the change. Power & influence are important
aspects of strategy implementation & strategic change because they
enable managers to be proactive & to influence or change peoples
intentions. The 2 ways in which managers can exercise control over the
behaviour of employees are:
• They can structure the situation in such a way that the emloyees will
comply with their wishes.
• They can communicate with the employees in order to seek to change
their perceptions so that they see things differently & decide to do what
the manager suggests.
The learning organisation
• The last stage of the strategic change process is to adapt to becoming a
learning organisation. The idea behind a learning organisation is that it
is easier to adapt to change if the organisation has the ability to learn.
The concept of a learning organisation entails the ability to think
continuously about strategy & to create synergy by sharing knowledge
& ideas. Some important aspects of learning are:
• Learning must be seen as a continuous process
• Employees should work & learn as a team
• Visions for the future must be shared
• Management development & personal growth are important
The learning organisation
• It must be realized that the employees’ skills are most important asset
of the organisation
• It will be necessary to reconsider the organizational habits,
generalization & corporate interpretations that may no longer be
relevant
• A systems approach must be applied when analyzing & viewing the
business environment. Systems approach is based on the
generalization that everything is inter-related and interdependent