Operationalising the strategy (Step 5: Implementation)

While implementation is not part of crafting the strategy, most strategic failures occur during implementation, and it is therefore essential to hold implementation elements in mind during the investment strategy process, particularly when discussing organisational capacity/capabilities.

Typically, strong steering occurs on elements such as KPIs, incentives and organisation structures, with too little attention put on elements such as on-going governance, culture, convincing the respective audiences, role modelling by senior management, changing individual behaviour, clear responsibility for implementation of initiatives and capability building among employees.

Once completed, the investment strategy will be translated into initiatives for implementation, e.g. an investment policy, tactical and operational asset allocation and potentially a revised RfP for a new investment manager or renegotiating an existing manager’s mandate. A monitoring plan also needs to be made.