- Early in the process of implementing and executing a new or different strategy, managers need to determine what resources will be needed and then consider whether the current budgets of organizational units are suitable.
- A company’s ability to marshal the resources needed to support new strategic initiatives and steer them to the appropriate organizational units has a major impact on the strategy execution process.
The funding requirements of a new strategy must drive how capital allocations are made and the size of each unit’s operating budgets. Under funding organizational units and activities pivotal to strategic success impedes execution and the drive for operating excellence.
- A change in strategy nearly always calls for budget reallocations.
- Visible actions to relocate operating funds and move people into new organizational units signal a determined commitment to strategic change and frequently are needed to catalyze the implementation process and give it credibility.
- Just fine-tuning the execution of a company’s existing strategy, however, seldom requires big movements of people and money from one area to another.