How Policies and Procedures Facilitate Good Strategy Execution
Read the overview below and complete the activities that follow.
A company’s policies and procedures can either support or hinder good strategy execution. Anytime a company moves to put new strategy elements in place or improve its strategy execution capabilities, some changes in work practices are usually needed. Managers are thus well advised to carefully consider whether existing policies and procedures fully support such changes and to revise or discard those that do not. Well-conceived policies and operating procedures facilitate strategy execution in three significant ways: 1) By providing top-down guidance regarding how things need to be done; 2) By helping ensure consistency in how execution of critical activities is performed; and 3) By promoting the creation of a work climate that facilitates good strategy execution.
The goal of this exercise is for you to understand how well-designed policies and procedures can facilitate good strategy execution.
A company’s policies and procedures can either support or hinder good strategy execution. Anytime a company moves to put new strategy elements in place or improve its strategy execution capabilities, some changes in work practices are usually needed. Managers are thus well advised to carefully consider whether existing policies and procedures fully support such changes and to revise or discard those that do not.
As shown in Figure 11.1, well-conceived policies and operating procedures facilitate strategy execution in two significant ways:
By providing top-down guidance regarding how things need to be done. Policies and procedures provide company personnel with a set of guidelines for how to perform organizational activities, conduct various aspects of operations, solve problems as they arise, and accomplish particular tasks. They clarify uncertainty about how to proceed in executing strategy and align the actions and behavior of company personnel with the requirements for good strategy execution. Moreover, they place limits on ineffective independent action. When they are well matched with the requirements of the strategy implementation plan, they channel the efforts of individuals along a path that supports the plan. When existing ways of doing things pose a barrier to strategy execution initiatives, actions and behaviors have to be changed. Under these conditions, the managerial role is to establish and enforce new policies and operating practices that are more conducive to executing the strategy appropriately. Policies are a particularly useful way to counteract tendencies for some people to resist change. People generally refrain from violating company policy or going against recommended practices and procedures without gaining clearance or having strong justification.
By helping ensure consistency in how execution-critical activities are performed. Policies and procedures serve to standardize the way that activities are performed. In essence, they represent a store of organizational or managerial knowledge about efficient and effective ways of doing things—a set of well-honed routines for running the company. This can be important for ensuring the quality and reliability of the strategy execution process. It helps align and coordinate the strategy execution efforts of individuals and groups throughout the organization—a feature that is particularly beneficial when there are geographically scattered operating units. For example, eliminating significant differences in the operating practices of different plants, sales regions, or customer service centers or in the individual outlets in a chain operation helps a company deliver consistent product quality and service to customers. Good strategy execution nearly always entails an ability to replicate product quality and the caliber of customer service at every location where the company does business—anything less blurs the company’s image and lowers customer satisfaction.
Page 332By promoting the creation of a work climate that facilitates good strategy execution. A company’s policies and procedures help set the tone of a company’s work climate and contribute to a common understanding of “how we do things around here.†Because abandoning old policies and procedures in favor of new ones invariably alters the internal work climate, managers can use the policy-changing process as a powerful lever for changing the corporate culture in ways that better support new strategic initiatives. The trick here, obviously, is to come up with new policies or procedures that catch the immediate attention of company personnel and prompt them to quickly shift their actions and behaviors in the desired ways.
A company’s policies and procedures provide a set of well-honed routines for running the company and executing the strategy.
FIGURE 11.1 How Policies and Procedures Facilitate Good Strategy Execution
Read the overview below and complete the activities that follow.
A company’s policies and procedures can either support or hinder good strategy execution. Anytime a company moves to put new strategy elements in place or improve its strategy execution capabilities, some changes in work practices are usually needed. Managers are thus well advised to carefully consider whether existing policies and procedures fully support such changes and to revise or discard those that do not. Well-conceived policies and operating procedures facilitate strategy execution in three significant ways: 1) By providing top-down guidance regarding how things need to be done; 2) By helping ensure consistency in how execution of critical activities is performed; and 3) By promoting the creation of a work climate that facilitates good strategy execution.
The goal of this exercise is for you to understand how well-designed policies and procedures can facilitate good strategy execution.
A company’s policies and procedures can either support or hinder good strategy execution. Anytime a company moves to put new strategy elements in place or improve its strategy execution capabilities, some changes in work practices are usually needed. Managers are thus well advised to carefully consider whether existing policies and procedures fully support such changes and to revise or discard those that do not.
As shown in Figure 11.1, well-conceived policies and operating procedures facilitate strategy execution in two significant ways:
By providing top-down guidance regarding how things need to be done. Policies and procedures provide company personnel with a set of guidelines for how to perform organizational activities, conduct various aspects of operations, solve problems as they arise, and accomplish particular tasks. They clarify uncertainty about how to proceed in executing strategy and align the actions and behavior of company personnel with the requirements for good strategy execution. Moreover, they place limits on ineffective independent action. When they are well matched with the requirements of the strategy implementation plan, they channel the efforts of individuals along a path that supports the plan. When existing ways of doing things pose a barrier to strategy execution initiatives, actions and behaviors have to be changed. Under these conditions, the managerial role is to establish and enforce new policies and operating practices that are more conducive to executing the strategy appropriately. Policies are a particularly useful way to counteract tendencies for some people to resist change. People generally refrain from violating company policy or going against recommended practices and procedures without gaining clearance or having strong justification.
By helping ensure consistency in how execution-critical activities are performed. Policies and procedures serve to standardize the way that activities are performed. In essence, they represent a store of organizational or managerial knowledge about efficient and effective ways of doing things—a set of well-honed routines for running the company. This can be important for ensuring the quality and reliability of the strategy execution process. It helps align and coordinate the strategy execution efforts of individuals and groups throughout the organization—a feature that is particularly beneficial when there are geographically scattered operating units. For example, eliminating significant differences in the operating practices of different plants, sales regions, or customer service centers or in the individual outlets in a chain operation helps a company deliver consistent product quality and service to customers. Good strategy execution nearly always entails an ability to replicate product quality and the caliber of customer service at every location where the company does business—anything less blurs the company’s image and lowers customer satisfaction.
Page 332By promoting the creation of a work climate that facilitates good strategy execution. A company’s policies and procedures help set the tone of a company’s work climate and contribute to a common understanding of “how we do things around here.†Because abandoning old policies and procedures in favor of new ones invariably alters the internal work climate, managers can use the policy-changing process as a powerful lever for changing the corporate culture in ways that better support new strategic initiatives. The trick here, obviously, is to come up with new policies or procedures that catch the immediate attention of company personnel and prompt them to quickly shift their actions and behaviors in the desired ways.
A company’s policies and procedures provide a set of well-honed routines for running the company and executing the strategy.
FIGURE 11.1 How Policies and Procedures Facilitate Good Strategy Execution
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