The importance for an organization of a clear, broadly shared strategy can be taken as axiomatic, insofar as some management measurement models have identified strategy as a valid factor on the basis of which measure and report human capital management effectiveness. The framework developed by the European Foundation for Quality Management (EFQM), called “Excellence Model”®, for instance, lists amongst its nine criterion, which are divided into five enablers and four results, the way organizations develop, review and execute strategy.
This model considers processes as the best means employers
can have recourse to in order to enhance the performance of their talents and
enable these to yield tangible, impressive results. More in particular, the
Excellence Model®, which is essentially based on the TQM philosophy,
measures strategy effectiveness on the basis of the processes and procedures involved
in formulating and implementing an organization’s intended strategy. “Policy
and strategy”, which are regarded in the model as “enablers” and are expected
by extension to produce “results”, are based on five sub-criteria:
1. Should
be developed according to the present and future needs and expectations of
stakeholders;
2. Have
to be based on the information gathered from performance measurement, research
and learning- and creativity-related activities;
3. Once
developed have to be constantly reviewed and updated;
4. Must
be deployed through a framework of key processes;
5. Have to be properly communicated and implemented.
The
unique aim of this model, which can be actually used as a real tool, is to help
its users, that is to say those who follow the processes and procedures it suggests,
to manage successfully and obtain excellent results. The model is not indeed
intended to enable organizations to formulate quality strategy, but rather to put
its users in a position to formulate a strategy likely to produce positive, measurable
results. The procedure, by means of the proposed sub-criteria, enables business
leaders to use a thorough and effective process to formulate or review strategy
and subsequently, by means of a score system, to assess the results produced by
this.
Whether quality would imply production of positive results,
this model might have been considered helpful to develop strategies of good
quality, but the attainment of results is a concept much more likely to match the
idea of effectiveness, rather than that of quality. Inasmuch as effectiveness is
not antonym of quality, effective results are not necessarily achieved by means
of quality or excellent strategies; these may in fact also be the effect of
good execution. Sometimes appreciable results can be attained thanks to mediocre
means, whereas quality of its own accord is not invariably a guarantee of
results.
Low and Siesfield (1998), notwithstanding, explicitly
mention “the quality of corporate strategy” as one of the ten non-financial
variables deemed of pivotal importance to effectively measure human capital
management. They hence attach a certain degree of importance to the quality of strategy
and acknowledge thus the circumstance which this may be objectively assessed
and measured, which is clearly a daunting feat to perform in practice.
In
general and under some circumstances, it is essentially possible that a
relatively “easy” and “simple” strategy may reveal to be effective and
productive, but albeit this would denote the good capabilities and skills of
the business leaders who have formulated it, it could be hardly argued that this
necessarily is a matter of quality. It would be indeed extremely tricky to provide
evidence of the existence of a causal effect between the quality of strategy
and the positive outcome this yields. Strategy can hardly be exclusively considered
as a matter of quality; it definitely is in fact also a matter of consistency,
effectiveness and execution. Gratton (2000) clearly is an advocate of this
idea: “There is no great strategy, only great execution.” Similarly, Kling and
Kosminsky (2006), with an original similitude, claim that “strategy without
execution is like a sports car without horsepower. It looks great in the
driveway, but impresses no one out on the road.”
In terms of strategy, the significance of quality taken in
isolation might indeed prove to be limited. Inasmuch as we intend by strategy the
direction and scope identified by an organization over the long-term (Johnson
and Scholes, 1993), it is unthinkable that an employer might be unable to identify
the direction this desires to go in as well as it would be rather problematic trying
and questioning the reasons behind its decision.
Having recourse to a systematic process to formulate
strategy is clearly of paramount importance as well as is assessing and
measuring by means of a structured process the consistency, effectiveness and worth
of the results produced by this. The use of a structured approach definitely
helps employers to clearly state their strategy’s intended objectives and helps
these to ensure that all of the relevant and necessary steps have been duly
taken into account. Such systematic procedure of its own, nonetheless, cannot
be regarded as a guarantee of quality.
According to Bratton (2007), there are two important activities
which need to be performed before formulating a strategy at corporate level:
- Define mission and goals – which is about the organization
management philosophy;
- Carry out an environmental analysis – which implies a
thorough internal and external analysis.
This knowledge and awareness will prove to be particularly
beneficial to the business executives helping and enabling them, when required,
to promptly take the necessary steps to change and adapt the business strategy
to the environmental changes (emergent strategy). The most suitable tools to
effectively and properly conduct this type of investigation are represented by
the SWOT (endogenous environment) and PESTLE (exogenous environment) analysis
models.
Strategy execution is considered, by common consent, of paramount
importance for the pursuance of an employer intended strategy; both of the above-mentioned
management effectiveness models actually stress this aspect. Yet, as suggested by Kinnie (2005), the
outcome expected from a strategy is never produced by just putting it in
writing in that employees are not influenced by the way strategies and policies
are written, but rather by the way strategies and practices are implemented. Of
the same opinion seem to be Kling and Kosminsky (2006) who contend that CEO’s
are rarely concerned about the “design of strategy”, whereas they are normally rather
worried about the capability of their organization to obtain the expected
results.
Longo, R., (2011), Strategy: Quality Vs Execution; HR Professionals, [online].
