Executive Summary for Mastering the Management System Hbr Article

I. Executive Summary:

Various studies done in the past 25 years indicate that 60% to 80% of companies fall short of the success predicted from their new strategies. Most of these underperformance results are due to the breakdown between strategy and operations. This paper describes how to forge tight links between strategy and operations in a five-stage system called the “Closed-Loop Management System”. In this system, a company begins by developing a strategy statement and then translates it into specific objectives and initiatives of a strategic plan. Using the strategic plan as a guide, the company maps out the operational plans and resources needed to achieve its objectives. As managers execute the strategic and operational plans, they continually monitor and learn from internal results and external data on competitors and the business environment to see if the strategy is succeeding. Finally, they periodically reassess the strategy, updating it if they learn that the assumptions underlying it are out-of-date or faulty, starting another loop around the system.

Here is a summary of these 5 stages and what each one entails:

1- Develop the Strategy: the cycle begins here where an existing strategy is revised or a new one is devised. The management team examines the company’s fundamental business assumptions and its competitive environment in light of its Vision, Mission and Values. Then, managers move on to develop a SWOT analysis (Strengths, Weaknesses, Opportunities, Threats) of the company. To do so, they use management tools and models like Porter’s 5 Forces, PESTEL and Porter’s Value Chain. The Final step in this stage is to formulate the strategy itself – the strategy statement and how the company proposes to achieve it. There are a number of frameworks and models that can be used as well including Porter’s Competitive Advantage, the Blue ocean approach or the critical processes approach.

2- Translate the Strategy: In this stage, managers take the...