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Correspondence: Brian D. Smith Pragmedic Limited, 6 Whetstone Close, Welwyn, Hertfordshire, AL6 0QW, UK E-mail: Brian.smith @pragmedic.com

INTRODUCTION Much strategic management research is about the processes fi rms employ to create strategies and the differences between strong and weak strategies resulting from those processes. In the case of markets in which the customer is either a clinician or the health-care system, strategy quality has been found to vary between very strong and very weak, with strong strategies resulting from strategy processes that are congruent to market conditions and organisational culture. 1 – 5

Much less has been published about the implementation of strategy. This is a signifi cant weakness in the literature that, while it leaves room for future research, leaves present-day executives with a lack of research-based guidance about how to

ensure their carefully-crafted strategic plans are realised in practice. This weakness is particular disappointing since a huge amount of literature exists that speaks, directly or indirectly, to the challenge of strategy implementation. That literature is, however, fragmented across many academic domains including, among others, organisational learning, 6 organisational structure, 7,8 control mechanisms, 9 – 11 communication, 12 organisational culture 13 – 15 market orientation, 16,17 management self-interest 18,19 and, as discussed in this article, motivation and organisational commitment.

In looking at strategy implementation, this article takes a different perspective from much of the published work aimed at executives. Such work 20 – 22 focuses on measurement, reward and sanction systems

Original Article

Discretion is the better part of value: Five research-based rules for ensuring that strategy implementers implement Received (in revised form): 23 rd April 2010

Brian D. Smith is a visiting research fellow in the Marketing and Strategy Unit of the Open University Business School, Milton Keynes, United Kingdom. He also leads Pragmedic ( www.pragmedic.com ), a specialised strategy consultancy and is the editor of the Journal of Medical Marketing .

ABSTRACT Without effective implementation, strategic planning is a futile exercise. In knowledge-intensive markets, such as those for pharmaceuticals and medical technology, the most important, value-creating parts of strategy imple mentation rely on the discretionary activity of motivated, committed individuals. This article reviews previous research into individual motivation and commitment and draws from it fi ve recommendations for improving strategy implementation, all of which contradict typical management practice. Journal of Medical Marketing (2010) 10, 259 – 266. doi: 10.1057/jmm.2010.14

Keywords: strategy ; implementation ; commitment ; motivation

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but this article makes the assumption that much of the value created when a company implements strategy is created by discretionary activity. That is, activity which cannot be measured and which relies on the voluntary, self-motivated actions of the individual employee. Such activity, whether it be internal (such as sharing valuable information with colleagues) or external (such as working to build customer relationships) is assumed to be very important to the effective implementation of strategy. In particular, this article assumes that discretionary activity is especially important in contexts, such as pharmaceuticals and medical technology, where the most valuable part of any strategy may be that part implemented by knowledge – workers dealing with expert customers working in complex health-care systems.

Unsurprisingly, the concepts of commitment and motivation have long been discussed in the context of strategy implementation, but reference to those concepts in the strategic management literature has made little connection to the separate and specialised literature about motivation and commitment, which lies in the domains of organisational psychology. Some research has described how even shared understanding of strategic goals can, if commitment is lacking, lead to ‘ counter-effort ’ by managers. 23 In a similar vein, other researchers have described the gaining of commitment to a strategic plan as ‘ problematic ’ in the context of strategic planning. 24 In the specifi c area of marketing planning, the concept of counter-effort is echoed in the tactics managers adopt to thwart planning. 25 Not unusually in the fi eld of management research, however, this interesting work has contented itself with considering its own domain and has paid less attention to useful work in related fi elds that have a distinct and separate academic phylogeny. The notable

exception to this is a recent work which uses models of organisational commitment to explain employee commitment to change. 26

This article therefore looks at two areas of research that, while related to each other, are usually treated separately in the academic literature: motivation and commitment. This article therefore begins by critically reviewing each area then synthesises the two areas to suggest a set of management practices by which business leaders might improve strategy implementation.

THEORIES OF MOTIVATION Any discussion of motivation should begin with a defi nition of what we mean by the term. In this context, Locke ’ s defi nition, 27 which refers to internal and external factors that can act as inducements to action and which impact on the direction, intensity and duration of activity, seems the most relevant. This defi nition would imply that motivation theories may indeed help to explain strategy implementation, which invariably involves the need for some action of some kind.

Various theories exist that offer some explanation of how workplace motivation varies between individuals and contexts. There are fi ve principle theories 28 :

Achievement motivation theory, which attributes motivation to inherent or acquired needs to achieve. 29 Equity theory, which explains motivation in terms of employees perception of the equity of their rewards relative to others. 30 Organisational behaviour modifi cation, which explains motivation in terms of reinforced or punished behaviours. 31 Expectancy theory and goal-setting theory, which are discussed in more detail below.

In the view of one expert panel, 32 goal-setting theory 33 is seen as the

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dominant theory of motivation and is the origin ‘ SMART ’ acronym often used by managers. However, much of the work supporting goal-setting theory is based in simple labour contexts that are very different from the discretionary, strategy implementation by knowledge – worker contexts that are the focus for this work. By contrast, expectancy theory 34 is seen as the fi rst over-arching theory of workplace motivation 27 and has been much-used in fi elds with clear corollaries to strategy implementation. For those reasons, both of these two theories are worthy of consideration in greater depth.

Expectancy theory Expectancy theory explains motivation in terms of four main concepts: force, valence, expectancy and instrumentality. Force is to the compulsion of an individual to behave in a given way, valence the preference for the consequent reward, expectancy the perceived likelihood that the behaviour will result in the intended outcome and instrumentality the perception that the intended outcome will lead to the consequent reward. Expectancy theory would, therefore, see the motivation of an individual to do what is needed to implement a strategy as the sum of the products of multiple valences, instrumentalities and expectancies involved.

It is not diffi cult to imagine how the constructs of expectancy theory might apply to strategy implementation; the compulsion of an individual to implement a strategic decision is an example of force; the implementer ’ s desire for the promised rewards associated with strategy imple- mentation is an example of valence; that person ’ s evaluation of the likelihood of strategy success is an example of expectancy; instrumentality describes the belief of the implementer that success will indeed be rewarded as promised.

Expectancy theory suggests why some strategic decisions are implemented with

more vigour than others. For example, a strategic decision to re-allocate sales team effort to a certain market segment may be implemented fully or not, depending partly on individual sales team members ’ motivation. Variance of this force from the ideal might be explained in terms of their cynicism about the merits of the decision (expectancy), the attractiveness of any tangible or intangible rewards offered (valence) and their trust in their leaders regarding the delivery of any promised rewards (instrumentality). Undoubtedly other factors will also infl uence the likelihood of the strategic decision being implemented, such as capability and resource adequacy, but expectancy theory seems to provide at least a partial explanation for why strategic plans fail to be implemented in practice.

Later research, while it adapts and improves expectancy theory, provides good support for the original model. Later ideas look at the way particular contexts moderate the key variables 35,36 Self-esteem, 37 role-perception, 38 feedback 39 and individual ability 40 have also, among other factors, been suggested as moderators of the basic expectancy theory model. Expectancy theory has been found to be useful in a number of contexts relevant to strategy imple- mentation. For example, in guiding management actions around sales territory management, 41 explaining professionals deviation from instructions 42 and the implementation of major change initiatives such as new decision-support systems 43 and just-in-time processes. 44

Goal-setting theory Like expectancy theory, goal-setting theory has its origins in the 1960s, 45 but has been developed greatly over that time. 33 It explains task-related effort in terms of goal diffi culty and goal specifi city. In other words, more diffi cult goals and more specifi c goals evoke higher

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effort. As with expectancy theory, work on goal-setting theory has upheld its basic principles but identifi ed three important factors that complicate the of the goal- performance relationship: goal commitment, task complexity and feedback. Goal commitment is found to be important, especially in high-diffi culty tasks 46 and that commitment itself is a function of the perceived importance of the task and the self-confi dence of the individual. Similarly, task complexity reduces goal effects, 47 while appropriate and timely feedback increases the link between goal-setting and performance. 48 In other words, stretching and specifi c goals motivate us but only if we think the goal is worth achieving, if we think we ’ re up to the task and if we can understand the impact of what we ’ re doing. As with expectancy theory, the concepts of goal-setting theory seem relevant to strategy implementation. For example, the setting of clear and challenging market share targets may explain differences in effort between different business units. The commitment of the relevant individuals in those units, the complexity of the share-winning task and the feedback that implementers receive from their leaders helps explain how that effort varies between individuals within units.

Goal-setting theory has been used to explain motivation in contexts such as logging, transport, word-processing and amongst scientists, engineers and telecommunications workers. 32 However, the literature seems to be noticeably weak with respect to managerial tasks. Some work exists concerning virtual teams 49,50 and about the risk of goals promoting unethical behaviour 51,52 but generally the literature is sparse as regarding goal-setting effects in managerial work where there is a high degree on uncertainty and discretion. Goal-setting theory therefore holds some promise as an explanation of strategy implementation behaviour, but it

would appear to have somewhat less of a history of application in relevant areas when compared to expectancy theory.

Hence from the various theories that seek to explain human motivation and which might shed light on the phenomenon of strategy implementation, expectancy theory and goal-setting theory emerge as the two ‘ front-runners ’ as measured by application and use in the literature. Goal-setting can claim to be the most currently popular, while expectancy theory can claim to have the most use in contexts broadly relevant to strategy implementation. Both offer ideas that may be useful in explaining the effort that individuals may put into discretionary tasks needed to make strategy a reality. However, as previously mentioned, ideas about organisational commitment, while emerging from a different academic tradition, also have something to contribute to how human behaviour infl uences strategy implementation.

THEORIES OF COMMITMENT As with motivation, it is important to defi ne what we mean by commitment. A commonly cited defi nition of commitment is that developed from a compiled list of defi nitions of the concept, which characterises commitment as ‘ a force that binds an individual to a course of action relevant to a particular target ’ . 53 Expressed in this form, commitment, like motivation, clearly holds promise for explaining strategy implementation and the study of organisational commitment has advanced greatly in recent years with three signifi cant developments that develop commitment into a more sophisticated idea.

The fi rst of these refi nements is the idea that commitment is not monolithic but can take three different forms 54 : ‘ affective ’ (attachment to the organisation) ‘ normative ’ (obligation to remain) and

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‘ continuance ’ (perceived cost of leaving.). This is especially important because the three forms have very different implications for behaviour, as discussed below.

The second major refi nement of the organisational commitment concept is that commitment can be directed at different targets such as the organisation, the team, the customer and the union. Different foci of commitment may both complement and confl ict, but it is poorly understood how and when this occurs. 55

The third advance in the elucidation of organisational commitment is that not all activities are moderated equally by levels of commitment. In situations where it is not possible to specify everything that is required for effective performance and where employees are required to make decisions and modify their behaviours in accord with changing conditions, commitment seems to especially infl uence to discretionary behaviour. 55

These three refi nements of the commitment concept seem especially important to strategy implementation. For example, when strategies are imperfectly controlled and directed by an organisation ’ s leadership, different forms of commitment, different foci of commitment and discretionary / non- discretionary behaviour may each provide some explanation of a gap between intended and realised strategy. Such lack of direct control is common in markets involving complex products and sophisticated customers, as in some business-to-business markets such as pharmaceuticals and medical technology. Moreover, empirical work using the three-component model has been used to explain the effectiveness of organisational change, 26,56 restructuring 57 and organisational citizenship behaviour, 58 all of which might be considered related to strategy implementation.

Discussion and implications for practice It seems self-evident that, especially in situations where discretionary activity is important to strategy implementation, expectancy theory, goal-setting theory and the three-component model of commitment have a role to play in both explaining what happens in practice and in suggesting guidelines for management action. Goals clearly play a role in determining motivation, but experimental work in goal setting and expectancy reveal that humans make complicated mental calculations when deciding how hard to work. Similarly, commitment clearly underpins personal motivations, but commitment to what and the nature of the commitment is more important than the simple fact of commitment.

From all of this, it seems both feasible and desirable to draw out some general ‘ rules of thumb ’ that managers might use when seeking to improve how individuals, especially key implementers, work to implement a strategic plan. The three areas of research described in this work suggest the following guidelines for managers:

Don ’ t take commitment and motivation for granted If research in this area proves anything, it is that a strategy communicated is not necessarily a strategy shared. Individuals will inevitably vary in the their willingness to implement that part of the strategy allocated to them and if the success of the strategy depends on discretionary action, that variation in motivation and commitment will result in a variation in how well the strategy is implemented. In practice, this means that managers should include managing the motivation and commitment of implementers as part of the overall strategy implementation task. In other words, shaping implementers ’ motivations and commitment is just as important as crafting the strategy.

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Make the goals fi t the strategy and only the strategy The empirical evidence tells us that, other things being equal, human beings strive for goals but that does not necessarily equate to striving for strategy implementation. If there is another, perhaps easier, way of achieving a set goal without implementing the strategy, it is possible and likely that some or all of the implementers will work to the goal rather than the strategy. This implies that an important part of ensuring strategy implementation is to set goals that can ’ t be achieved by any method other than following strategy. In practice, this means setting more specifi c goals, such as by market segment, rather than simple overall sales targets that might be achievable without implementing the strategy. In other words, the goals we set should refl ect the strategy, not simply the things we can measure easily.

Make goals believable and understandable The research described in this article makes it clear that not all goals are equally compelling. Goals that are perceived as unachievable and rewards that are unattractive or may not be awarded will not motivate strategy implementers. Similarly, an implementer who cannot see how what they do makes a difference is unlikely to push to make the strategy happen. In practice, this means that imposing ‘ top-down ’ targets and relying only on end-results instead of intermediate outcomes is unlikely to create a motivated team of strategy implementers. In other words, we should set targets that the implementers think they can infl uence and achieve.

Earn the right kind of commitment to the strategy Individuals working in organisations form commitments, but those commitments may not be of the kind that supports strategy implementation. Commitment to

a department, rather than the company, is likely to lead to in fi ghting at the expense of the strategy. A genuine attachment to the company will drive strategy implementation much more than fear of punishment or losing the job. In practice this means suppressing the natural tendency of department managers to create ‘ in-groups ’ and earning respect and understanding from implementers, even though it takes longer than a ‘ carrot and stick ’ approach. In other words, strategists should remember that, as the old phrase goes, a willing volunteer is worth 10 conscripts.

Don ’ t just measure The research doesn ’ t advocate the abandonment of metrics but it does recognise their limits. Not only does an over-reliance on measurement lead to managing to goals rather than strategy, it risks neglecting those intangible activities that can ’ t be measured but which create most value. A more balanced approach sets appropriate metrics and identifi es those discretionary activities that will make or break a strategy. In practice, this means replacing some measurement and analysis with qualitatively thinking through what is required of implementers and the attitudes that must underpin that activity. In other words, strategists should remember that implementation happens through people, not through spreadsheets.

The signifi cance of these fi ve recommendations lies in how they contradict much typical management practice. Understandably, typical practice tends to follow that which is easiest to do, which in practice leads to a normative pattern of behaviour that is at odds with what is suggested by this work. For example, it is not contentious to assert that many managers assume that the simple issuance of instructions, along with existing reward and sanction processes, is suffi cient to guarantee strategy

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implementation. Equally, it is common for goals to be set in terms of overall sales targets that can be achieved without necessarily following a given strategy. Goals are often imposed from above and management information systems are often not able to give strategy implementers feedback on intermediate goals. Departmental leaders often encourage sub-group loyalty, sometimes at the expense of organisational commitment, and leaders may rely on negative forms of commitment rather than the more diffi cult to achieve attachment to company values. Finally, the prevalence of data and information systems tends lead managers to measure and reward nondiscretionary tasks over discretionary tasks. All of these typical practices contradict what is known about human motivation and commitment in the context of strategy implementation.

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