Strategies are actions a company's management takes to build revenues, improve productivity and increase profits. Strategy formulation involves making critical choices -- what products or services to sell, and where and how to sell them. Many companies have an annual strategic planning process involving members of the management team in which strategies for the upcoming year are formulated. From there, specific tactics -- also called tasks or projects -- are outlined to implement the strategies. A strategy, for example, might be to begin marketing the company's products in Mexico. During the implementation phase, the management team must decide on the specific steps that must be taken to enter this new market, and determine the company resources required to complete each step.
Lack of Human or Financial Resources
Small companies in particular often find that during the implementation phase they do not have sufficient personnel to accomplish all the tactics that have been drawn up to implement the ambitious strategies they have developed. Financial resources can be a constraint on implementation as well. Company management often finds it necessary to prioritize its strategies -- make a judgment about which ones are most critical to implement given the finite or even scarce financial resources available.
Difficulty of Planning the Sequence of Tactics
Implementation is a complex process because some strategies require a lengthy series of steps. Strategies may also require a degree of timing to be successful, such as deciding the best time of year to launch a new ad campaign. Managers must be skilled at envisioning each of the steps and the amount of time that will be required to complete each one. In the example about entering the Mexican market, a company that's new to international sales can find it difficult to determine all the necessary tactical steps, and their sequence, in order to accomplish implementation smoothly and without wasting financial resources.
Resistance to Change
A change in strategic direction causes ripple effects of change throughout the organization. Entire departments or divisions may have to be reorganized to implement the revised strategies. Reporting relationships may be redrawn. All employees may not agree with the new strategic direction. They may resent the new responsibilities they have been given, and, as a result, not put forth the maximum effort that is required for the new strategies to succeed. Part of top management's job is to convince all members in the organization that the changes, in the long run, will benefit everyone. If management communicates the reasons behind the change in strategy, resistance can be minimized, and employees are more likely to support the decisions that were made.
Necessity of Teamwork
Strategic implementation is not as simple as the small-business owner handing out a list of tasks and due dates to each employee. Personnel within departments and across functional areas must build a spirit of teamwork, pulling together to efficiently implement each strategy. If there is friction within departments or functional areas, even the most brilliant strategies may not be successfully implemented because vital communication will be lacking among team members. Successful implementation requires everyone involved to contribute their knowledge, special skills and time. For example, a retailer opening a new location will ask its marketing team to select the best location, but this decision should be made in conjunction with the finance team. The financial staff will be asked to develop cost projections for the new location, and to determine whether the company can afford the rent and other costs of the location recommended by the marketing team.
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