Strategy Justification Process

Strategy Justification Process

A company's progress toward its strategic goals can be hampered if it does not have solutions in place to translate strategy into operations and monitor progress related to strategy implementation. This is important because we are currently dealing with such a volatile environment that without the appropriate implementation and control tools, it will be extremely difficult for an enterprise to achieve its goals. The literature on this topic and economic practice provides many examples of companies that failed to implement the developed strategies, which allows us to conclude that the process of strategy implementation should be considered the most critical stage of the strategic management procedure. We can say that the strategy is effectively implemented only when the projects stated in the strategy as those that should contribute to the implementation of the accepted vision of the company's development are effectively implemented. The question then becomes: what type of decisions should be used to translate strategic plans into expected results?

The use of appropriate solutions to improve this process during strategy implementation is now becoming increasingly important. This is because managers of companies operating in complex and uncertain environments have to deal with many issues at once, so they are looking for methods and tools that will help them manage more effectively. To improve the strategy implementation process, enterprises use various solutions. They can be grouped into those that concern, among other things: organizational structure, employee evaluation systems, motivation systems, communication systems, tools and methods of implementation, strategic control systems.

When embarking on strategy implementation, the enterprise must skillfully translate its intentions into tactical and operational plans, and within them into specific implementation programs and tasks to be implemented, further supported by appropriate guidelines and procedures. Therefore, in the process of implementing the strategy, it is important to establish a schedule for the implementation of individual tasks, assign them to specific executive units, set appropriate deadlines for implementation, and determine resources and means. necessary to complete the tasks and indicate the persons responsible for their correct implementation and achievement of the intended results. Taking into account the above, it is necessary to establish a budget intended for the implementation of the strategy and determine how to obtain the necessary financial resources. The described approach gives the company the opportunity to move from the “general” (the strategy option chosen for implementation) to the “detailed” (developed implementation programs containing specific tasks that need to be completed, as well as a schedule for their implementation, specific budgets and assigned responsibilities). It is important that the implementation programs developed create a coherent strategy implementation plan that will be systematically monitored and controlled.

Another solution that should facilitate strategy implementation is the Strategic Scorecard (SKW), currently one of the most popular tools used in the strategy implementation process. The tool, developed by R. Kaplan and D. Norton, first appeared in 1992. Since then, it has quickly gained popularity and in 1997 was recognized as one of the most significant management tools of the 20th century. The creators of SKW presented this tool as a solution designed to stimulate management personnel and make it easier for them to use non-financial information. R. Kaplan and D. Norton argued that the use of this information by managers will allow them to better implement the chosen strategy. In short, it can be said that SKW is an approach to measuring company performance that combines traditional financial indicators with non-financial indicators, thereby providing managers with richer and more useful information about the activities they manage.

Since its inception, SKW has evolved and over time has become a tool that, among other things, allows: communication of the company's strategy at all levels of the organizational structure, which can significantly increase the motivation of employees in the process of implementing the strategy. In turn, SKW's goal measures help explain to employees what factors and activities influence the company's future success. SKW also provides the opportunity to identify those initiatives that are beneficial to achieving strategic goals. To summarize, we can say that the use of BSC helps the company to effectively translate the strategy into specific operational activities, and the developed set of measures assigned to individual goals makes it possible to control the process of strategy implementation.

Another implementation method, the strategy map, also emerged from the evolution of SKW. The strategy map is a solution that allows you to visualize the cause-and-effect relationships between strategic goals from all SKW perspectives. It shows how strategy links an organization's resources to internal value creation processes and explains the decision logic behind creating value for stakeholders. R. Kaplan and D. Norton argue that the strategy map, consistently describing the strategy, allows you to set and manage strategic goals and measures of action aimed at achieving the adopted goals, thus becoming the missing link between the formulation of the strategy and its implementation.

The role of strategic control comes down to checking the rationality of the chosen direction of development. An effective strategic management system must combine two seemingly contradictory roles. Firstly, its task is to create the basis for the most consistent implementation of the tasks arising from the strategy. Secondly, it is designed to effectively provide impulses for updating and possible modification of the strategy. Thus, we can say with confidence that strategic control is of key importance for a company implementing the chosen strategy option. Through this, the organization can obtain information about whether the chosen course of action is valid. An important element of strategic control should be the regular measurement of the progress of work related to the implementation of the strategy, which allows us to answer the question: are we really moving in the indicated direction? To know at what stage of strategy implementation the company is, it must build a management system that can compare the actual state with the expected one. An integral part of such a control system should be a set of measures assigned to strategic goals, which will allow for constant monitoring of the level of implementation of the adopted goals.

The increasingly unstable and unpredictable conditions for the development of modern enterprises stimulate and even force the creation of the most flexible organizations. Today, the ideal is an enterprise that has resources that are sufficiently universal and at the same time in such abundance that they can be used in various ways, not necessarily planned in advance. Equally important is an organizational culture and a supportive organization focused on innovation and frequent change. Only this type of enterprise is able to effectively use emerging, usually unforeseen, opportunities. This is also the most effective way to achieve success in today's realities.