1. 1
IMPLEMENTING AND EXECUTINGIMPLEMENTING AND EXECUTING
STRATEGY: BUDGETS, POLICIES,STRATEGY: BUDGETS, POLICIES,
BEST PRACTICES, SUPPORTBEST PRACTICES, SUPPORT
SYSTEMS, AND REWARDSSYSTEMS, AND REWARDS

2. 2
Linking Budgets to Strategy
 Allocating resources in ways that support
effective strategy execution involves
 Funding capital projects that can make a
contribution to strategy implementation
 Funding efforts to strengthen
competencies and capabilities
or to create new ones
 Shifting resources—downsizing
some areas, upsizing others, killing
activities no longer justified, and funding new
activities with a critical strategy role

3. ESTABLISH STRATEGY-ESTABLISH STRATEGY-
SUPPORTIVE POLICIESSUPPORTIVE POLICIES

4. 4
How Policies and Procedures
Aid Strategy Implementation
 Provide top-down guidance regarding
expected behaviors
 Help align internal actions with strategy,
channeling efforts along the intended path
 Enforce consistency in performance of
activities in geographically scattered units
 Serve as powerful lever for changing
corporate culture to produce stronger
fit with a new strategy

5. 5
Creating Strategy-Supportive
Policies and Procedures
 Role of new policies
 Channel behaviors and decisions
to promote strategy execution
 Counteract tendencies of people
to resist chosen strategy
 Too much policy can be as stifling as
Wrong policy or as Chaotic as no policy
 Often, the best policy is empowering
employees and letting them operate between
the white lines anyway they think best

6. INSTITUTE BEST PRACTICESINSTITUTE BEST PRACTICES
AND MECHANISMS (FORAND MECHANISMS (FOR
CONTINUOUS IMPROVEMENT)CONTINUOUS IMPROVEMENT)

7. 7
Instituting Best Practices
and Continuous Improvement
 Searching out and adopting best practices is
integral to effective implementation
 Benchmarking has created new approaches to
improve strategy execution
 Reengineering
 TQM
 Continuous improvement programs

8. 8
What is TTotal QQuality MManagement?
 TQM is a philosophy of managing a set of business
practices that emphasizes
 Continuous improvement in all phases of
operations,
 100 percent accuracy in performing activities,
 Involvement and empowerment of employees at
all levels,
 Team-based work design,
 Benchmarking, and
 Fully satisfying customer expectations

9. 9
Components of Popular TQM Approaches
1. Consistency of purpose
2. Adopt the philosophy
3. Don’t rely on mass
inspection
4. Don’t award business
on price
5. Constant improvement
6. Training
7. Leadership
8. Drive out fear
9. Break down barriers
10. Eliminate slogans
and exhortations
11. Eliminate quotas
12. Pride of
workmanship
13. Education and
retraining
14. Plan of action
Deming’s 14 Points

10. 10
The Juran Trilogy
Quality Planning Quality Control
Quality
Improvement
• Set goals
• Identify customers
and their needs
• Develop products
and processes
• Evaluate
performance
• Compare to goals
• Establish
infrastructure
• Identify projects
and teams
• Provide resources
and training
• Establish controls
Components of Popular TQM Approaches

11. 11
1. Management
commitment
2. Quality improvement
teams
3. Quality measurement
4. Cost of quality
evaluation
5. Quality awareness
6. Corrective action
7. Zero-defects committee
8. Supervisor training
9. Zero-defects day
10. Goal-setting
11. Error cause removal
12. Recognition
13. Quality councils
14. Do it over again
Crosby’s 14 Quality Steps
Components of Popular TQM Approaches

12. 12
Baldridge Award Criteria (1000 points)
Quality
1. Leadership
(90 points)
2. Information &
analysis
(80 points)
3. Strategic quality
planning
(60 points)
4. Human resource
development
(150 points)
5. Management of
process quality
(140 points)
6. Quality &
operation results
(180 points)
7. Customer focus &
satisfaction (300
points)
Components of Popular TQM Approaches

13. 13
Implementing a Philosophy of
Continuous Improvement
 Instill enthusiasm to do things right
throughout company
 Strive to achieve little steps forward each day,
(what the Japanese call kaizen)
 Ignite creativity in employees to improve
performance of value-chain activities
 Preach there is no such thing as good
enough
 Reform the corporate culture

14. 14
TQM vs. Process Reengineering
Objectivity
Reengineering Aims at quantum gains of 30 to
50% or more
TQM Stresses incremental progress
Techniques are not mutually exclusive
Reengineering - Used to produce a good basic
design yielding dramatic improvements
TQM - Used to perfect process, gradually
improving efficiency and effectiveness

15. 15
Using Best Practice Programs
as an Implementation Tool
 Select indicators of successful strategy
execution
 Benchmark against best practice companies
 Reengineer business processes
 Build a TQ culture
 Requires top management commitment
 Install TQ-supportive employee practices
 Empower employees to do the right things
 Provide employees with quick access to
required information
 Preach that performance can be improved

16. INSTALL SUPPORTINSTALL SUPPORT
SYSTEMSSYSTEMS

17. 17
Installing Support Systems
 Essential to promote successful strategy
execution
 Types of support systems
 On-line data systems
 Internet and company intranets
 Electronic mail
 E-commerce systems
 Mobilizing information and creating systems to
use knowledge effectively can yield Competitive
advantage

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Examples: Support Systems
Airlines
Computerized reservation system
Federal Express
Computerized parcel-tracking system,
leading-edge flight operations systems, and
e-business tools

19. 19
Examples: Support Systems
Otis Elevator
Sophisticated maintenance support system
Domino’s Pizza
Computerized systems at each outlet facilitate
ordering, inventory, payroll, cash flow, and
work flow functions

20. 20
Formal Reporting of
Strategy-Critical Information
 Accurate, timely information is essential to
guide action
 Prompt feedback on implementation activities
is needed before actions are fully completed
 Key strategic performance indicators must
be tracked as often as practical
 Barometers of overall performance
 Statistical information
 Reports and meetings
 Personal contact

21. 21
What Areas Should
Information Systems Address?
 Customer data
 Operations data
 Employee data
 Supplier/partner/collaborative ally data
 Financial performance data

22. DESIGN STRATEGY-DESIGN STRATEGY-
SUPPORTIVE REWARDSUPPORTIVE REWARD
SYSTEMSSYSTEMS

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Gaining Commitment: Components
of an Effective Reward System
Monetary Incentives
 Salary raises
 Performance
bonuses
 Stock options
 Retirement packages
 Promotions
 Perks
Non-monetary Incentives
 Praise
 Constructive criticism
 Special recognition
 More, or less, job
security
 Interesting assignments
 More, or less, job
responsibility

24. 24
Approaches: Motivating People
to Execute the Strategy Well
 Inspire employees to do their best
 Get employees to buy into strategy
 Structure individual efforts in teams
to facilitate a supportive climate
 Allow employees to participate in
decisions about their jobs
 Make jobs interesting and satisfying
 Devise strategy-supportive
motivational approaches

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Examples: Motivational Practices
No Lay-Off Policies
Japanese automobile producers, along with
several U.S. based companies (Southwest
Airlines, FedEx, Lands’ End, and Harley Davidson)
have no lay-off policies, using employment
security both as a positive motivator and a
means of reinforcing good strategy execution.

26. 26
Examples: Motivational Practices
Stock Options
More than 35 of the 58 publicly held companies on
the 1999 list of the 100 Best Companies to Work for in
America (includes Cisco Systems, Procter & Gamble,
Merck, Charles Schwab, General Mills, Amgen, and
Tellabs) provide stock options to all employees.
Having employee-owners sharing in a company’s
success is widely viewed as a positive motivator.

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Balancing Positive vs. Negative Rewards
 Elements of both are necessary
 Challenge and competition are necessary
for self-satisfaction
 Prevailing view
 Positive approaches work better than
negative ones in terms of
Enthusiasm
Effort
Creativity
Initiative