MT460 Unit 8 Strategy Implementation Plan Example

Pay First, Then Money, Structure and Refusals: An MT460 Unit 8 Implementation Plan for a Seed Pod Subscription

[Student Name]

Purdue University Global

MT460: Management Strategy and Policy

Unit 8 Implementation Plan

[Instructor Name]

[Date]

Sprigwell Gardens, its people, its budget and every figure are composite; the sources cited are real.

Why Incentives Come First

The current pay plan rewards Sprigwell's regional sales managers on gardens shipped. A manager paid that way has no reason to spend time on a subscription that sells no gardens, and every reason to push the chains for larger garden orders, the dependence the strategy is trying to reduce. Kerr (1975) warned about rewarding one result while hoping for another, and Hrebiniak (2006) found that incentives misaligned with a new strategy are among the most common reasons implementation fails. So the plan changes pay before anything else, in the first month, before any other announcement reaches the sales force.

Lever One: Incentives

From the first month, regional sales managers' variable pay shifts from gardens shipped toward pod attach rate, the number of subscriptions signed per garden sold in their region. Half their variable pay will depend on attach rate in the first year, rising to two-thirds in the second. Independent retailers earn a commission of 12 percent of first-year subscription revenue on every subscription signed in their store or with their code, and may fulfill local subscribers from their own stock for a further margin. Customer service staff earn a quarterly bonus tied to subscriber retention.

Lever Two: The Budget

The plan spends $6.8 million over eighteen months. The subscription platform and app changes take $2.1 million. The retailer program and first-year commissions take $1.6 million. A consumables team of new staff takes $1.3 million. A packaging line at the Raleigh warehouse, to assemble subscription boxes, takes $1.2 million. Marketing to existing owners through the app and email takes $0.6 million.

Most of the money comes from stopping other work. Canceling the tooling for a sub-$80 garden releases $2.4 million. Cutting co-op advertising money paid to the two national chains releases $1.9 million. Dropping one of three annual trade shows releases $0.4 million. Together these release $4.7 million. The remaining $2.1 million comes from the proceeds of the pod plant sale recommended in Unit 7.

Most of the subscription is paid for by work the company stops doing, not by new money.

Lever Three: Structure

A consumables unit is created, with a general manager reporting directly to the chief executive rather than through the garden business. The unit owns pods, nutrients, the subscription and the grow data. Three analysts, hired from outside because no current employee has worked with device data, join it in the first phase, closing the organization gap found in Unit 3: for the first time, someone at Sprigwell owns the data. The garden business keeps its own general manager and continues to sell gardens, but its targets now include the attach rate its gardens produce.

Lever Four: Standing Refusals

Four refusals are written as policy, so that they do not have to be argued again each quarter. Sprigwell will not build a garden priced under $80. It will not sign an exclusive pod deal with any chain. It will not offer direct-ship subscription prices below what retailers can offer. And it will not sell or share owners' grow data with third parties. Rumelt (2011) argues that a good strategy includes a coherent set of actions and the discipline to refuse actions that do not fit, and these four refusals protect the strategy's two lasting resources, the retailers and the data.

The Timeline

Phase one, months one to six: the new pay plan takes effect, the consumables unit and its analysts are in place and a sixty-day trial offers the subscription to 8,000 connected owners, half through the app and half through retailers. Gate: no fewer than 45 percent of trial members remaining at day sixty, and retailers signing at least a quarter of trial subscriptions. Both thresholds were set before the trial begins, so the result cannot be argued into a pass after the fact.

Phase two, months seven to twelve: the subscription opens to all connected owners and every independent retailer. Gate: 40,000 subscribers and monthly cancellations below 4 percent.

Phase three, months thirteen to eighteen: the packaging line opens, and the subscription extends to owners of older, unconnected gardens through retailers. Gate: twelve-month retention of at least 70 percent among the first subscribers.

If a gate is missed, the next phase does not start until the cause is understood and the plan revised.

Risks to Implementation

The chains may respond to reduced co-op money by cutting garden shelf space faster than expected; the plan accepts some loss, priced in Unit 10, but will monitor shelf counts monthly. Retailers may be slow to sign subscribers; field staff will visit the 200 largest retailers in the first phase. And the analysts may find the grow data messier than expected; the first phase includes three months to clean it before it is used to time shipments.

References

Hrebiniak, L. G. (2006). Obstacles to effective strategy implementation. Organizational Dynamics, 35(1), 12-31. https://doi.org/10.1016/j.orgdyn.2005.12.001

Kerr, S. (1975). On the folly of rewarding A, while hoping for B. Academy of Management Journal, 18(4), 769-783. https://doi.org/10.2307/255378

Rumelt, R. P. (2011). Good strategy bad strategy: The difference and why it matters. Crown Business.