Building a capable organization: The eight leversof strategy implementation

Victoria L. Crittenden a,*, William F. Crittenden b

aCarroll School of Management, Boston College, Fulton Hall 450B, 140 Commonwealth Avenue,Chestnut Hill, MA 02467, U.S.A.bCollege of Business Administration, 101 Hayden Hall, Northeastern University, Boston, MA 02115, U.S.A.

Business Horizons (2008) 51, 301—309

www.elsevier.com/locate/bushor

KEYWORDSStrategy;Implementation;Managerial levers;Performance

Abstract The habitual mode of poor strategy implementation shaping the nextround of strategy formulation weakens the subsequent planning cycle. Unfortunately,decades of company interactions consisting of research, teaching, and consultingsuggest that strategy implementation has become a catchall of phrases and recom-mendations, with little clarity as to what comprises this necessary cornerstone of acapable organization. Strategists tend to use powerful terminology when referring toimplementation efforts. Descriptors such as killers, confrontation, and engagementare linked with actions like conquering, blocking, tackling, and honing when discuss-ing strategy implementation. Our contention is that implementation is a criticalcornerstone or ally in the building of a capable organization, and the use of theappropriate levers of implementation is the pivotal hinge in the development ofthe organization. Ultimately, strategy implementation helps create the future, notinhibit it.# 2008 Kelley School of Business, Indiana University. All rights reserved.

If you give me a lever and a place to stand, I shallmove the earth. Archimedes (287—212 BC)

1. Implementation: The gap betweenformulation and performance

Mankins and Steele (2005) report companies realizeonly 63% of the financial performance promised bytheir strategies. Kaplan and Norton (2005) attribute

* Corresponding author.E-mail addresses: victoria.crittenden@bc.edu

(V.L. Crittenden), w.crittenden@neu.edu (W.F. Crittenden).

0007-6813/$ — see front matter # 2008 Kelley School of Business, Idoi:10.1016/j.bushor.2008.02.003

this strategy-to-performance gap, in part, to thefact that 95% of a company’s employees are notaware of or do not understand their company’sstrategy. According to Johnson (2004), however,66% of corporate strategy is never implemented.This suggests that the problem lies somewhere inthemiddle of this strategy-to-performance gap, witha more likely source being a gap in the formulation-to-implementation process. If employees lack knowl-edge about the company’s strategy, it is unlikely thatproper implementation will occur, which in turnleads to poor financial performance.

Bonoma and Crittenden (1988) suggested thatthis habitual mode of poor strategy execution then

ndiana University. All rights reserved.

302

shapes the next round of strategy formulation, thusweakening the strategy formulated subsequently.Without a doubt, the overall neglect of strategyimplementation leads to poor performance bothin the current execution and in future strategyformulation processes. Unless caught in time, theendless formulation-implementation-performancecycle leads to subsequent attempts at implementinga mistaken strategy. When this occurs, it is hard totell if weak performance is due to good implemen-tation of a bad strategy, or the result of poorimplementation of a good strategy.

Unfortunately, decades of research, teaching,and consulting interactions with companies suggestthat strategy implementation has become a catch-all of phrases and recommendations, with littleclarity as to what comprises this necessary corner-stone of a capable organization. The catchall tendsto boil down to rules or piecemeal components ofimplementation, usually with implementation be-ing a necessary but evil component, rather than anoverarching framework for guiding the implemen-tation process. This transformation means thequestions must change: What actually constitutesstrategy implementation? Is strategy implementa-tion an opponent, or can it be an ally for theorganization?

1.1. Strategy implementation: Opponentor ally?

Over the years, management strategists have of-fered considerable advice regarding strategy imple-mentation. Beer and Eisenstat (2000) attempt tocapture much of this advice in their description ofthe six silent killers of strategy implementation,with the idea being that managers who confrontthese killers, rather than using avoidance or mana-gerial replacement techniques, could overcomethem and therefore become a capable organization.The six silent killers were identified as

1. T

op-down or laissez-fair senior managementstyle,

2. U

nclear strategy and conflicting priorities,

3. A

n ineffective senior management team,

4. P

oor vertical communication,

5. P

oor coordination across functions, businesses,or borders, and

6. In

adequate down-the-line leadership skills anddevelopment.

Strategists tend to use powerful terminology todescribe the importance of implementation. Beerand Eisenstat (2000) use terminology such as killers,confrontation, and engagement. Mankins andSteele (2005) refer to conquering the gap betweenstrategy and performance, and offer tactical spec-ificity for conquering the formulation-implementa-tion-performance process: keep it simple/make itconcrete, debate assumptions/not forecasts, use arigorous framework/speak a common language,discuss resource deployment early, clearly identifypriorities, continuously monitor performance, andreward/develop execution capabilities. It is asthough strategy implementation requires strategicwarfare. Others, such as Porter and Harper (2003),use sports phrases such as blocking and tackling,and suggest that managers must hone their imple-mentation skills.

Our contention is that strategy implementationis not an opponent that needs to be conquered ortackled. Rather, strategy implementation is a crit-ical cornerstone and ally in the building of acapable organization, and the use of the appropri-ate levers of implementation will be the pivotalhinge in the development of that organization. Assuch, we offer eight levers of strategy implemen-tation.

The ancient Greek mathematician Archimedes(287—212 BC) suggested that levers make workeasier by using a fulcrum to magnify one’s effortagainst a force or resistance. Building upon earlierimplementation work by Bonoma and Crittenden(1988), in conjunction with Thompson, Gamble,and Strickland’s (2006) strategy execution process,our framework brings together critical structuraland managerial skill levers necessary for the build-ing of a capable organization. While this does notsuggest that all eight levers are necessary for suc-cessful strategy implementation, the identificationof the levers allows companies to identify strong andweak points that could impact the implementationprocess.

1.2. Strategy research: Organizationalstories

Data from two decades of company-based researchprovides insight into how companies have at-tempted, either successfully or unsuccessfully, tomesh their structural and managerial skills in theirstrategy implementation efforts.

This project examined strategy implementationissues within the context of a company databasecomprised of 124 organizational stories. These or-ganizational stories were derived from both primaryand secondary sources. A total of 29 of the organi-

V.L. Crittenden, W.F. Crittenden

Building a capable organization: The eight levers of strategy implementation 303

zational stories have been developed into full-length case studies with varying foci, and 95 ofthe stories are now in use as short vignettes explain-ing how a particular business challenge was handledby the organization.

This is not a longitudinal study. That is, compa-nies were examined, and a case or vignette com-piled for a particular point in time. While thecompanies in the story database can be viewed froma variety of perspectives, the traditional product(consumer, business-to-business, service, or non-profit) and market distinctions (International orU.S. based) are used to describe the companies.

An epigrammatic overview of these 124company stories, per the product and market per-spective, is provided below, and then a briefdescription of the companies referenced in thisarticle is given.

1. C

onsumer companies–—69 stories (9 internation-ally-based)

2. B

usiness-to-business companies–—15 stories (5internationally-based)

3. S

ervice companies–—33 stories (3 internationally-based)

4. N

onprofit companies–—7 stories (2 international-ly-based)

1.2.1. Organizational stories: Consumers

1. C utco Cutlery Corporation is the largest manu-

facturer and marketer of high-quality kitchencutlery and accessories in the United Statesand Canada. Vector Marketing Corporation isthe company’s sales division. ALCAS Corporationis the parent company.

2. F

ounded in Quincy, Massachusetts, Dunkin’ Do-nuts operates franchise retail outlets offeringcoffee, donuts, and muffins.

3. S

outhern Home Developers (disguised name) waslocated in a rural town in central Arkansas. Thecompany operated out of a small, corrugatedmetal production facility with a crew of fivemen who built modules in the facility for trans-port to a housing site for final assembly.

1.2.2. Organizational stories: Business-to-business

1. F loral Farms (disguised name) grows and markets

fresh-cut flowers. The company owns its ownfarms in Colombia, and its marketing organiza-tion is located in Miami, Florida.

2. A

global pharmaceutical company, Merck & Co.,Inc. is dedicated to developing advances in prod-ucts that will address unmet medical needs.

3. N

avistar International Transportation Corpora-tion operates in one principal industry seg-ment–—the manufacture and marketing ofmedium and heavy trucks. This includes schoolbus chassis, mid-range diesel engines, and ser-vice parts.

4. O

MED Medical Supplies is located in Athens,Greece. The company, a distributor of medicalsupplies to hospitals in Greece, was establishedin December of 2005 as a legal entity of singleperson/owner company (atomiki epihirisi).

5. O

riginally located in Newton, Massachusetts,Powrtron (disguised name) is a private, predomi-nately family-held, company engaged in themanufacture and sale of electronic analog circuitmodules, isolation amplifiers, and power con-verters.

1.2.3. Organizational stories: ServiceService provider e-Motion Software LP is headquar-tered in Bedford, Massachusetts. Its service is linkedto the Oracle E-Business Suite of products. Thecompany provides support that makes Oracle Appli-cations more reliable, enhances the applications’functionality, and increases the efficiency of use inthe Suite.

1.2.4. Organizational stories: NonprofitBased in Boston, Massachusetts, Battered WomenFighting Back! was an education and advocacy groupthat addressed the severity of domestic violence asa human rights violation. Its primary charge was toeradicate domestic violence in society and to pro-mote human rights for everyone.

2. Implementation: Structures andmanagerial skills

Bonoma and Crittenden (1988) suggest that imple-mentation is comprised of two main variables, struc-tures and managerial skills. Structures provide theframework or configuration in which companiesoperate effectively. Managerial skills are the behav-ioral activities that managers engage in within thestructures developed by the organization. Strategiesare implemented through the structure, with mana-gerial skills as key indicators of the successful orunsuccessful accomplishment of the implementationeffort. Thompson, Gamble, and Strickland (2006)

304 V.L. Crittenden, W.F. Crittenden

liken these managerial skills to management tasksthat arise in executing strategy. With research fromthese two sets of authors as a guide, eight levers ofimplementation are specified in the current re-search. Consistent with the research of Bonomaand Crittenden (1988), these eight levers are dividedinto structure and skills.

Structural variables offer an implementationtoolkit for identifying key levers that affect theformulation-implementation process and ensuringformulation-implementation-performance cycle.Within the capable organization framework sug-gested here, structural levers of implementation are

1. A

ctions–—who, what, and when of cross-function-al integration and company collaboration;

2. P

rograms–—instilling organizational learning andcontinuous improvement practices;

3. S

ystems–—installing strategic support systems;and

4. P

olicies–—establishing strategy supportive poli-cies.

Managerial skills are discretionary in nature andvary with individual perceptions and behavior. Skill-related implementation levers in the capable or-ganizations framework are

5. In

teracting–—the exercising of strategic leader-ship;

6. A

llocating–—understanding when and where toallocate resources;

7. M

onitoring–—tying rewards to achievement; and

8. O

rganizing–—the strategic shaping of corporateculture.

2.1. Structural levers

2.1.1. Actions: Fostering cross-functionalintegration and company collaborationCrittenden (1991) states that successful strategyimplementation requires the input and cooperationof all players in a company. Three levels of strategyform a hierarchy of strategy within a company:corporate strategy, business strategy, and function-al strategy. Successful strategy implementation,regardless of strategy level, requires the inputand cooperation of every member of a company’sworkforce, whether the implementation involvesthe development and distribution of a new product,

or the merging of two companies in order for one orboth to remain competitive in the marketplace. Thedatabase of company stories from our research isripe with cross-functional integration issues. Com-panies such as Floral Farms and Southern HomeDevelopers were deluged with cross-functional is-sues hindering the implementation of formulatedstrategies. Floral Farms grew and marketed fresh-cut flowers. Developing new flower strains, and thegrowing and development of products, took place inSouth America, with product sales occurring in theUnited States via a Miami-based sales force. Not onlydid the employees in the two different countriesspeak different languages, but also neither geo-graphic group made the effort to better understandthe other’s functional priorities. Therefore, consid-erable effort was devoted tomaking sure productionand sales worked in sync.

In Floral Farm’s pursuit of a market orientation(formulated strategy), a consultant suggested thatthe two groups close the geographic distance byvisiting each other’s offices at least twice a year. Bydoing so, marketing would see the trials and trib-ulations of growing agricultural products, and pro-duction would see firsthand what it was like torespond to the demands of customers. The grandfinale of these efforts was a company-wide strategymeeting in which the company was supposed toembark upon a new growth effort. After initialexecutive comments, this meeting was turned overto the marketing staff to set the stage for growth.Unfortunately, the finale did not end with theintended energizing big bang. Instead, it endedwith a few brief comments by the productionmanager:

You made a very nice presentation. It’s too bad wecan’t increase output by the amounts you pro-jected for the 12-month time period. We can’tchange production for any of the products for thenext 11 months. What’s planted is planted. I willsend you an overview of product availability forthe upcoming fiscal period.

Therefore, it was not the lack of an appropriatelyformulated strategy, but actions within the struc-ture at Floral Farms that prevented a positive per-formance outcome.

But what happens when the formulated strategydoes not appropriately fit with a company’s cross-functional ability to implement? Southern HomeDevelopers depicts an example of a company thatbegan to implement a formulated strategy of masscustomization without the means for doing so. Thiscompany experienced early success with its modularhome construction. Modular homebuilders build,deliver, and install a single-family dwelling for about

Building a capable organization: The eight levers of strategy implementation 305

half the cost of a site-constructed home in about10-20% percent of the time relative to site-constructed homes. Therefore, the competitive ad-vantages are low price and short cycle times. Theowner of Southern Home Developers decided to takeorders for customized modular homes. That meanthe was going to attempt a formulated strategy ofmass customization. Unfortunately, cost overrunsand longer setup times led to conflict betweenthe company’s sales person and the manufactur-ing/set-up crew. Promises made by the sales persondid not mesh with the company’s manufacturingexpertise. It was not clear that a mass customizationstrategy was even appropriate in a marketplacedriven by low prices and short cycle times.

Collaborations across companies occur in many ofthe company stories. Dunkin’ Donuts required sig-nificant collaboration within its supply chain for thesuccessful rollout of its new bagel product. Withprojected sales running high, the product volumepromised by the supplier was not met, and causedsignificant delays in the product rollout plan. Suchdelays were costly, and lost sales could not berecaptured. The aggressive rollout, however, wasnot supported by all functional areas within thecompany. Therefore, while experiencing supplyproblems with its collaborative partner, the compa-ny also faced ‘‘I told you so’’ objections internally.

2.1.2. Programs: Instilling organizationallearning and continuous improvementpracticesFlorida and Goodnight (2005) suggest that a com-pany’s most important asset is not its raw materials,transportation systems, or political influence. Rath-er, these authors claim that a company’s most im-portant asset is its creative capital–—that is, thecreative thinkers in the firm. From an implementa-tion perspective, creative capital must be plannedfor in the firm, and will determine the strategiesthat are ultimately formulated and implemented.However, Schrage (2005) reports that hiring theright people is not sufficient in the implementationmodel, because as noted by one CIO, ‘‘Even if youhire the right people–—and we think we do–—theyneed to be in an environment that encourages themto be innovative in ways we can use.’’

It appears, then, that organizational learning andcontinuous improvement must incorporate innova-tion into this implementation lever. Santos, Doz,and Williamson (2004) reinforce the importance ofinnovation in the implementation process when theydescribe the integrated innovation chain. This chainenables innovation to transcend local and nationalboundaries by encouraging companies to bring to-gether global partners in the innovation effort.

Innovation is at the heart of several of the com-pany stories. In 2004, Merck was presented with anunprecedented challenge in its voluntary recall ofVioxx. It was not business as usual at Merck, giventhe considerable concern for the long-term impactof the legal decisions regarding Vioxx. Yet, amidstthis uproar during tumultuous times, the company’ssales people had to keep their spirits up and believein the company that they represented. The salesforce essentially needed to become better informedabout the company as an innovative organization. Inorder to achieve this, the sales force in one geo-graphic region was presented with an overview ofthe innovative efforts within the company, includingnew vaccines, HIV/AIDS international programs, im-proved products, tablet computers for the salesforce, customization of information on the web,patient assistance programs, and licensing deals.The sales people learned how the company wasdeveloping innovative programs for continuous im-provement, and that the company was not reliant onone product for long-term success.

2.1.3. Systems: Installing strategic supportsystemsRoss and Weill (2002) suggest that companies thatmanage their information technology investmentssuccessfully will generate 40% higher returns thantheir competitors. Essentially, the strategic supportsystem provides timely access to both qualitativeand quantitative data about customers, human re-sources, revenues and costs, and inventory/orderfulfillment. Strategically, decisions have to bemade about how much to spend, which businessprocess to support, andwhich capabilities are need-ed company-wide versus function-wide. Tactically,the quality of information technology needed in thefirm and security/privacy concerns are issues thatarise in the implementation of the informationtechnology itself.

In conjunction with its action structural lever,Floral Farms utilized its systems lever in the devel-opment of a decision-support model to assist inmaking complicated cross-functional issues easierto understand. Mapping the cross-functional deci-sion process into a decision-support system enabledmanagers to quantify subjective interactions andinclude situational aspects of marketing and pro-duction interactions into a more easily understoodframework. Using the decision-support system as ameans of understanding the possible consequencesof individual marketing, joint marketing, and pro-duction decision-making showed that functionallyanchored decision criteria gave poorer results thancross-functional decision criteria. Additionally, thedevelopment, operationalization, and discussion of

306 V.L. Crittenden, W.F. Crittenden

this strategic support system led to positive inter-functional discussions rather than negative confron-tation.

2.1.4. Policies: Establishing strategysupportive policiesStrategy-supportivepolicies envelopacollectivepat-tern of day-to-day decisions and actions. Thompsonet al. (2006) reinforce the notion of top-down orformal guidance regarding such behaviors and ac-tions. Additionally, there should be consistencyacross geographically dispersed units. There is atendency, unfortunately, to create policies in re-sponse to particular incidents rather than in responseto a pattern of incidents. The end result is a list ofthings that should be done, which when viewed intotal, does not support the company’s overall missionand objectives. Additionally, policies tend to changewith changes in management.

The Powrtron company’s management, in grap-pling with unprecedented problems of constrainedcapacity, was quick to respond with a new policywhenever a delivery problem arose. The responsesranged from a plan to move production to a largerfacility to making delivery promises of 6 weeks orless. Although the company divided its customersinto three tiers, it began treating all customersalike. The lack of strategy-supportive policieshad, in essence, served to defeat strategic decisionsabout account management. Not only did this resultin customer relationship problems, but reactivepolicy changes also incited conflict among Powrtronfunctional management members and created aculture of unproductive conflict. Unfortunately,the company’s CEO delegated the handling of com-pany interactions to his COO and was not visiblypresent during this intense time within the compa-ny, although he was the one who had made theinconsistent policy changes that led to considerablecompany instability.

2.2. Managerial skills levers

2.2.1. Interacting: Exercising of strategicleadershipKey responsibilities of leaders include direction, pro-tection, orientation,managing conflicts, and shapingnorms (Heifetz & Laurie, 2001). Collins (2005) exam-ines such responsibilities of leaders and offersa leadership hierarchy consisting of five levels:Level 1–—Highly capable individual (contributionsthrough talent, knowledge, skills, and work habits);Level 2–—Contributing team member (groupobjectives, and works effectively in group); Level3–—Competent manager (organizes people andresources); Level 4–—Effective leader (vision and high

performance standards); and Level 5–—Executive (en-during greatness through personal humility and pro-fessional will). While not necessary to movesequentially through the hierarchy, an executivemust possess all of the skills inherent in levels 1 to4, as well as the characteristics of a level 5 leader.

All five levels of leadership were exhibited in thedatabase. One particular level 5 leader stands out inthe database of companies. After a few years ofweak sales and unprofitable effort at internationalexpansion, Cutco Cutlery Corporation was startingto pull out of the downward spiral that had resultedin considerable layoffs. Bringing the company backinto profitability demanded effort from the entireworkforce, but eventually the future began to lookpositive. In the summer of 2006, the CEO of parentcompany ALCAS Corporation planned to purchase anew car, but recognized that he needed to lead byexample. He decided to intentionally purchase acar he would feel comfortable parking on themanufacturing facility’s lot next to those of manywho were just being recalled to work.

An in-depth review of all of the organizationalstories shows that strategic leadership, whether it isconspicuous or not, is a critical implementationlever for building a capable organization. Fromthe entrepreneur who worked days as a consultantwhile devoting nights and weekends to building e-Motion Software LP, to the executive director andfounder of Battered Women Fighting Back! whorealized she might have reached the end of herleadership capabilities, all company situations ex-hibited the importance of the leadership lever inimplementing strategy.

2.2.2. Allocating: Understanding when andwhere to allocate resourcesResource allocation encompasses the use of majorresources such as money, people, and capabilities.In addition to financial resources, Montgomery(1992) identifies resources such as physical capital(plant, equipment, geographic location, and accessto raw materials), human capital (training, experi-ence, judgment, intelligence, relationships, and theinsight of managers and workers), and organization-al capital (formal reporting systems, informal rela-tionships within the firm, and relationships betweenthe firm and its external environment).

A startup company in Greece, OMED MedicalSupplies, realized that resource allocation wasprobably its most critical implementation lever ear-ly in the company’s existence. With financial back-ing from family money, financial resources were themost dominant capital that OMED possessed. Physi-cally, the company did not manufacture productsor store products in inventory. The fact that the

Building a capable organization: The eight levers of strategy implementation 307

company was located in Athens provided consider-able geographic capital because Athens is the centerof much medical activity. Human capital was amajor resource for OMED. The owner’s family hasa strong medical background, with three physiciansin the immediate family, including two located inGreece, and one in the United States. However, thefirm’s organizational capital was questionable.There were no formal systems or structures in placewhile the owner covered all aspects of the businessand ran the business from her home. Informally,however, the historical relationships the ownerhad within the industry due to her family connec-tions allowed for organizational capital that other-wise would have taken considerable time to build.

2.2.3. Monitoring: Tying rewards toachievementReward systems are generally divided into monetaryand non-monetary incentives. Monetary incentivesinclude such rewards as salary increases, perfor-mance bonuses, stock options, retirementpackages, promotions, and various perks. Non-monetary incentives include praise, constructivecriticism, visible recognition, interesting assign-ments, job responsibility, and job security. Accord-ing to Byrnes (2006), money is where the rubbermeets the road, and good work should be rewarded,bad work should be penalized, and executive payshould depend on the entire corporation’s return onequity, which encourages team building.

This is not unlike the incentive system at VectorMarketing Corporation, the sales and marketing armof Cutco Cutlery Corporation, where sales managersreceive tremendous financial bonuses for outstand-ing sales. However, because they believe strongly inpraise and visible recognition, Vector Marketingannounces these bonuses at the year-end banquet.Therefore, not only do managers enjoy the financialrewards of the bonuses, but they also receive ex-ternal acknowledgement of their financial successamong their peers. Like many companies relyingupon the strength of its sales force to drive sales,Vector Marketing realizes that it must use multipletypes of rewards to encourage and motivate em-ployees in a direct selling company that relies on acollege-student sales force. The company pridesitself on its cornerstones of people, products, andprograms, and utilizes each of these elements in themonitoring lever to build a capable organization.

2.2.4. Organizing: Strategic shaping ofcorporate cultureChatman and Cha (2003) suggest that culture relatesstrongly to strategy implementation. They defineculture as a system of shared values (defining what is

important) and norms (defining appropriate atti-tudes and behaviors). While an organizational cul-ture is unique to each company, shaping corporateculture requires clearness in content, consistency innature, and comprehensiveness in coverage. Schein(1996) proposes that there are three different typesof cultures in an organization: (a) internal culturethat is based on operational success, (b) engineeringculture that drives the core technologies, and (c)executive culture that engages the CEO and imme-diate subordinates.

Company culture came through loud and clear inthe company database of organizational stories. Theimportance of internal culture was demonstrated,for example, at Floral Farms. Unfortunately, theinternal culture driven by functional silos was anegative force in that company. This negativity withrespect to internal culture can be juxtaposed withthe positive internal culture of a company likeNavistar International Transportation, where thelack of functional silos enabled the company toimplement programs that resulted in positive mar-ketplace results. Navistar implemented a strategyof mass customization, due largely to the company’sactions and systems levers that were part and parcelof the company’s engineering culture driving its coretechnologies.

Within the company database, the impact ofexecutive culture in companies of all shapes andsizes is evidenced. Battered Women Fighting Back!(BWFB), a nonprofit organization, relied almost sin-gularly on its executive director and founder toshape its culture as it was catapulted into nationalacclaim. The executive director and two film com-rades from Cambridge Documentary Films won anAcademy Award for the best documentary film. Thedirector had worked in human rights organizationsaround the world, and had won numerous awards inthe nonprofit world. She was the backbone of theorganization; however, she began to wonder if theculture she had instilled in the BWFB organizationwas enough to take it to a stronger level of oper-ations. She recognized that while culture is a uniquecharacteristic within all companies, it is also apowerful implementation tool for managers, andis reflected in managerial decision-making.

3. Balancing the implementationlevers

Strategy implementation is generally studied withinthe context of established organizations. While theeight levers that assist in building a capable organi-zation can also serve as barriers in any organization,it was evident in the organizational stories that

308 V.L. Crittenden, W.F. Crittenden

established firms are generally able to overcompen-sate with another lever to reduce the impact of aweak lever. When a company is in the early stages ofstartup, however, it is imperative that the entre-preneur or CEO understands how each of the leversrelate to the company’s strengths and weaknesses.Unless identified, a weak lever can negatively feedthe endless formulation-implementation-perfor-mance cycle that leads to subsequent attempts atimplementing a strategy highly dependent uponthat weak lever.

The idea of building a capable organization via anunderstanding of the eight levers of implementationwas examined at OMEDMedical Supplies, the startupcompany in Greece referred to earlier. The soleproprietor launched her business in January of2006, and the company was just beginning to con-tact both potential customers and suppliers at thattime. Model assessment within a startup companyhas two major objectives: (a) It allows the in-depthexamination of the eight levers within the contextof one company, and (b) it facilitates the develop-ment of the levers as an analytical tool for a startupcompany to use in identifying levers that mightserve as barriers to the company’s long-term suc-cess. Managerially, model assessment enables theproprietor to better understand her internalstrengths and weaknesses when it comes to thenotion that implementation might truly drive thestrategy formulation process.

Over a 2 month period, we worked with theproprietor of OMED Medical Supplies to examineeach of the eight levers within the context of herstartup company. After an in-depth analysis of eachof the eight levers, it was evident that the proprie-tor was relying largely on her managerial skills inthe early stages of company development. Therewas uncertainty surrounding the rewards lever, butthis was likely due to the fact that there were nomonetary or people interactions at that stage ofdevelopment.

It became immediately apparent that the weaklinks in the company’s implementation efforts rest-ed within the structural levers. While the companywas going to be dependent upon collaborations withsuppliers, no mechanisms or strategic support sys-tems had been put in place to facilitate such inter-actions, nor had the company invested time, energy,or dollars in the pursuit of such technology efforts.Additionally, while company suppliers were gov-erned by regulations surrounding ISO certificationand CE Marking (compliance within the Europeanhealth, safety, and environmental protection legis-lation), the proprietor had established no policiesrelated to her own operation within these supplierboundaries. Of the four structural levers, the owner

believed that organizational learning and continu-ous improvement practices were strengths, yet shehad not engaged in any benchmarking efforts relat-ed to continual improvement.

Overall, using the levers as a managerial toolallowed for the identification of efforts that wouldfacilitate formulation and implementation efforts,and for the identification of forces of resistance thatcould inhibit the implementation process. Unlessweak levers were identified, overcome, or workedaround, they would ultimately constrain futurestrategy formulation efforts. For this startup com-pany, it was found that the proprietor was playing onmanagerial skills that tended to be discretionary innature. The ritualized activities that have to beformally embedded in an organization are whatthe proprietor had been overlooking in her startupefforts.

While building a capable organization does notnecessarily require use of all eight levers equally, acapable organization has to have a clear under-standing of each lever’s role and its impact on theorganization’s ability to succeed. It is only when anorganization understands the capabilities of eachlever within the organization that it can determinethe right amount of leverage. For example, theactions lever was weak at Floral Farms, an organi-zation that had been in business for many years.Even with attempts to strengthen this lever, it wasonly through the successful parlaying of the systemslever that the company was able to become strongerin its efforts to implement a market orientationstrategy. Another well-established company, CutcoCutlery Corporation, appears to have a clear under-standing of each lever, and to have found its ownunique blend of structural variables and managerialskills that enables it to have success in marketplace.A startup company, OMED Medical Supplies, isattempting to build each of the eight levers intothe fabric of the organization.

4. Strategy implementation: An ally

Strategy implementation helps create the future. Asan ally and not an opponent, the implementationprocess works side-by-side with the formulationprocess, and such collaboration leads to plans thatare financially, socially, and ethically responsiblestrategies for a company. Successful implementa-tion of a well-formulated and appropriate strategywill enable a company to become better and betterover time, therefore achieving its longer-term vi-sion of a good mission, good planning, and overallcorporate success. The eight levers of implementa-tion identified here provide organizations with an

Building a capable organization: The eight levers of strategy implementation 309

evaluative opportunity to determine which leversare working well, which levers need to be down-played due to inherent weakness, and which leversneed to be improved given marketplace conditions.

References

Beer, M., & Eisenstat, R. A. (2000). The silent killers of strategyimplementation and learning. Sloan Management Review,41(4), 29—41.

Bonoma, T. V., & Crittenden, V. L. (1988). Managing marketingimplementation. Sloan Management Review, 29(2), 7—14.

Byrnes, N. (2006, May 1). The art of motivation. Business Week,57—62.

Chatman, J. A., & Cha, S. E. (2003). Leading by leverage culture.California Management Review, 45(4), 20—34.

Crittenden, V. L. (1991). Crossing functional lines: Achievingsuccessful strategy implementation through effective internalpartnering. Industrial Management, 33(1), 26—28.

Collins, J. (2005). Level 5 leadership. Harvard Business Review,83(7/8), 136—146.

Florida, R., & Goodnight, J. (2005). Managing for creativity.Harvard Business Review, 83(7/8), 124—131.

Heifetz, R. A., & Laurie, D. L. (2001). The work of leadership.Harvard Business Review, 79(11), 131—141.

Johnson, L. K. (2004, December). Execute your strategy–—withoutkilling it. Harvard Management Update, 3—5.

Kaplan, R. S., & Norton, D. P. (2005). The office of strategymanagement. Harvard Business Review, 83(10), 72—80.

Mankins, M. C., & Steele, R. (2005). Turning great strategy intogreat performance.Harvard Business Review, 83(7/8), 64—72.

Montgomery, C. A. (1992). Resources: The essence of corporateadvantage. Harvard Business School Cases, #9-792-064.

Porter, T.W., & Harper, S. C. (2003). Tactical implementation: Thedevil is in the details. Business Horizons, 46(1), 53—60.

Ross, J. W., & Weill, P. (2002). Six IT decisions your IT peopleshouldn’t make. Harvard Business Review, 80(11), 84—92.

Santos, J., Doz, Y., & Williamson, P. (2004). Is your innovationprocess global? MIT Sloan Management Review, 45(4), 31—37.

Schein, E. H. (1996). Three cultures of management: The key toorganizational learning. Sloan Management Review, 38(1),9—20.

Schrage, M. (2005). Innovation alchemy. Retrieved January 14,2008, from http://www.cio.com.au/index.php/id;63352741;fp;4;fpid;56492

Thompson, A. A., Gamble, J. E., & Strickland, A. J. (2006).Strategy: Winning in the marketplace (2nd ed.). Burr Ridge,IL: McGraw-Hill/Irwin.