effective strategy execution - bina · pdf fileeffective strategy execution dr. firdaus...

Effective Strategy Execution

Dr. Firdaus Alamsjahalamsjah@binus.edu

Knowledge Sharing with NSNJakarta, 16 November 2011

1

mailto:alamsjah@binus.edumailto:alamsjah@binus.edu

Professional ExperienceExecutive Dean, BINUS Business School

Managing Partner, BINUS ConsultingDirector, BiNus International

Faculty Members at IPMI, UI, Unud Exxon Natuna Ltd

Professional MembershipsAdvisor, Indonesian Production and

Operations Management Society (IPOMS)

Active Member, APICSActive Member, lpha Pi Mu (Industrial

Engineering Honor Society, USA)

Major ClientsAstra International, Holcim, Gajah Tunggal,

Raja Garuda Mas

Welcome to BBS Knowledge SharingFirdaus Alamsjah (Feri)

Academic QualificationsPh.D. , MSIE in Industrial Engineering (Houston, USA)Insinyur in Mechanical Engineering (ITB, Indonesia)

Executive EducationCertified Strategy Execution Professional GML & QPR

Implementing Strategy - The Wharton SchoolIndonesia Executive Program - GE Management Development

Program (Crotonville, USA)Project Management - Sundridge Management Development

Program (London, UK)

2

About BINUS Business School...

Applied Business School with Emphasis on Innovation Member of EFMD (European Foundation for Management Development)

Other Members: London Business School, Insead, Wharton BBS was sponsored by Grenoble (France) and Australian Business School (UNSW)

Accredited A by BAN (National Accreditation Board) MURI: 100 business case studies in four years Programs: Business Management, Finance, Marketing in Undergraduate, Masters, and

Doctoral with more than 10 Overseas Academic Partners

Executive Education Custom Programs: Management Development Programs to more than 50 big

corporations

Open Enrollment: CFA, FRM, CISA with more than 5000 alumnae Consulting: IT and Management to more than 20 major firms

3

Research and

Case Studies in Strategy

Execution

Drivers ofExcellence in

StrategyExecution

Strategy

Execution Framework

(StratEx)

Outline

4

Is implementing Strategy More Difficult than Formulating Its Strategy?

N= 145

Source: Alamsjah (2007), Survey on Strategy Execution

!"#$$#

%

AgreeNeutralDisagree

5

Worth Having a Formal Strategy Execution Process?

Do you have a formal strategy execution process in place? Yes(54%)

No(46%)

Current performance of the organizations

We have breakthrough resultsWe are performing better than our peer group

12%58%

7%20% Winners

Subtotal 70% 27%Winners

Performing at the same level as our peer groupPerforming at lower level that our peer groupNot performing at a sustainable level

18%9%3%

30%27%16% Losers

Subtotal 30% 73%

Losers

'()*+,-./'0(1.2,3,4*+5.63)*7,8.(9.%:;.+,.=4>4?,=,>@.413B.C*4D>.9*(=./'0(1E>1A>,.0(==)>A@8B.F4*+5.$""!G

!"#$%&'(%)*(%+%,-./.01223

6

Major Obstacles in Implementing Strategy*

1. Poor or vague strategy2. Not having guidelines or a model to guide

strategy execution efforts3. Insufficient financial resources to execute

the strategy4. Trying to execute a strategy that conflicts

with the existing power structure5. Inability to generate buy-in on critical

steps or actions6. Lack of upper management support of

strategy execution7. Lack of feelings of ownership of a

strategy or execution plans among key employees

*Source: Hrebiniak (2005), Making Strategy Work, Wharton School Publishing

!" #$%&'()'*+%,+-.,/'(0'*+$110(10*$2,''*+%,+-.,/'2('/311(02',4,%3-(+'(56,%-.,/'

7" 8((0'(0'*+$9,:3$2,'*+)(0;$-(+'/

Top 5 Killers in Implementing Strategy*

1 Unclear communication of responsibility and/or accountability for execution decisions or actions

Poor or inadequate information sharing between individual or business units responsible for strategy execution

2

Poor or vague strategy3

Inability to manage change effectively or to overcome internal resistance to change

4

Lack of feelings of ownership of a strategy or execution plans among key employees

5

*Source: Alamsjah (2007), Survey on Strategy Execution 8

Indonesian vs. American Managers

Major Obstacles in Implementing Strategy BBS WBS GR

Unclear communication on accountability/ responsibility 1 5 4

Poor information sharing 2 4 2

Poor or vague strategy 3 2 5

Inability to manage change 4 1 1

Lack of ownership on execution plan 5 8 5

Insufficient financial resources to execute the strategy 12 12 11

* Based on surveys by BBS, Alamsjah (2007)** BBS = BINUS Business School, WBS = Wharton Business School, GR = Gartner ResearchWBS and GR data from Hrebeniak, (2007), Making Strategy Work

45657+8$%&'(%5)%+%95:"8")(%*89"8;

9

Clear StrategyCorporate Culture

Resource AllocationCEO & Leadership

Managing Integration

4.6 4.7 4.8 4.9 5.0

People CompetencyOrganization Structure

Clear StrategyResistance to Change

Performance Management

3.2 3.4 3.5 3.7 3.8

More Successful Companies in Implementing Strategy are Very Good at...

Less Successful Companies in Implementing Strategy are Struggling at...

Source: Alamsjah (2011), Survey on Strategy Execution from Middle-Level Managers Perspectives

N = 124

N = 24

10

Corporate CultureClear Strategy

CommunicationExecution Plan

People CompetencyDocumentation

Performance Management

0 10.0 20.0 30.0 40.0

Significant Factors that Have Strong Correlation to Successful Strategy Implementation...

Source: Alamsjah (2011), Key Success Factors in Implementing Strategy from Middle-Level Managers Perspectives, Strategic Management Conference, Paris

Percent

N = 124

11

Research and Case Studies in

Strategy Execution

Drivers of

Excellence inStrategy

Execution

Strategy

Execution Framework

(StratEx)

Outline

12

Strategy Execution Framework(StratEx)

Operational ProcessStrategy

Internal Context

External Context

Leadership

Outcome

Adapted from Okumus (2003), A Framework to Implement Strategies in Organizations, Management Decision, 41/9 13

Outcome

!"

#"

$"

%"

&"

'!"

'#"

'$"

'%"

'&"

#!"

#!!(" #!!%" #!!)" #!!&" #!!*"

!"##"$%

&'()*

'

+,-./"01-2.1/341/5" 625274891:7/,:"01;412,:/"

fOperational ProcessStrategy

Internal Context

External Context

Leadership

Outcome

Strategy Execution Framework(StratEx)

15

External Context

Technology Turbulence

Uncertainties

Market Uncertainty

Competition Intensity

Demand Uncertainty

Strategy Execution Framework(StratEx)

16

Mc DonaldsCompeting on Speed

External Context Changes in Market Environment

17

Survey...

What are your three reasons to go to Mc Donalds?

How long are you willing to wait for your order be completed?

18

McD Five Criteria of Success

19

McD is Adaptive?

20

JIT Kitchen System

21

Operational ProcessStrategy

Internal Context

External Context

Leadership

Outcome

Strategy Execution Framework(StratEx)

22

Strategy

Low HighLow

High

PriceMajor Operators

AttackersShared

Destination

After

Quality (Coverage, Signal)

Low

HighLow

High

Price

Major Operators

Attackers

Quality (Coverage, Signal)

Before

How low?How fast?

Source: Hasnul Suhaimi, BBS CEO Speak, 2010

Strategy Execution Framework(StratEx)

23

Strategy

Low

HighLow

High

Price

Quality (OTP, Service)

Before

Low HighLow

High

Price

After

Quality (OTP, Service)

Strategy Execution Framework(StratEx)

24

fOperational ProcessStrategy

Internal Context

External Context

Leadership

Outcome

Strategy Execution Framework(StratEx)

25

Internal Context

Organizational Structure

Organizational CulturePast Short term Longer term

Strategy Execution Framework(StratEx)

26

!"#

$$"#

%$"#

%&"#

'("#

)*+,-.*/#0102,340560406#+78*+8-+9.7#

:-84.;.*/#+

fOperational ProcessStrategy

Internal Context

External Context

Leadership

Outcome

Strategy Execution Framework(StratEx)

28

Leadership

1. Sense of Urgency

2. Build Guiding Team

3. Get the Vision Right

4. Communicate for Buy-In

5. Empower Action

6. Create Short-Term Wins

7. Dont Let Up

8. Make Changes Stick

CEO Leadership in Leading Organizational Change

29

fStrategy

Internal Context

External Context

Leadership

OutcomeOperational Process

Strategy Execution Framework(StratEx)