effective strategy execution - bina nusantaracms.binus.edu/datapage/file/bbs/knowledgesharing... ·...

Effective Strategy Execution

Dr. Firdaus [email protected]

Knowledge Sharing with NSNJakarta, 16 November 2011

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mailto:[email protected]

mailto:[email protected]

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 Sharing…Firdaus 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)

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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 firms3

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

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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

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7

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 Manager’s 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

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fOperational ProcessStrategy

Internal Context

External Context

Leadership

Outcome


15

External Context

Technology Turbulence

Uncertainties

Market Uncertainty

Competition Intensity

Demand Uncertainty


16

Mc Donald’sCompeting on Speed

External Context Changes in Market Environment

17

Survey...

• What are your three reasons to go to Mc Donald’s?

• 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


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


23

Strategy

Low

HighLow

High

Price

Quality (OTP, Service)

Before

Low HighLow

High

Price

After

Quality (OTP, Service)


24


Internal Context

External Context

Leadership

Outcome


25

Internal Context

Organizational Structure

Organizational CulturePast Short term Longer term


26

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Alamsjah (2011), Senior Management Survey on Innovation

The Best CEO for Leadership and Innovation in Mining Industry

81 125 150 175 201708

1.8122.138

3.0342.899

1.749

412319

3.090

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

10000

90 91 92 93 94 95 96 97 98 99 '00 '01 '02 '03 '04 '05 '06 '07

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Innovation Culture

• Encourage to be innovative

• Encouraged to take reasonable risk

• Free to act independently

Company’s Weakest Type of Innovation Capability

27


Internal Context

External Context

Leadership

Outcome


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. Don’t Let Up

8. Make Changes Stick

CEO Leadership in Leading Organizational Change

29

fStrategy

Internal Context

External Context

Leadership

OutcomeOperational Process


30

Operational Process

Strategy Deployment and Alignment

People Competencies

Resource Allocation

Communication

Monitoring and Evaluation


31

Operational Process

From Strategy to Action...

32

33

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Increase Profit

Increase Revenue

Reduce Cost

Improve Customer

Loyalty

Do SOP consistently

Provide Quality Food

Provide Fast Service

Improve Staff Competency

Create Conducive

Environment

Purchase Cooking

Equipment

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fStrategy

Internal Context

External Context

Leadership

OutcomeOperational Process


34

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Are You Ready to Implement Your Strategy?

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Sources: Alamsjah (2011), AMMP 2010 35

Research and Case Studies in

Strategy Execution

Drivers of

Excellence inStrategy

Execution

Strategy

Execution Framework

(StratEx)

Outline

36

Conclusion

“7Cs”in

Drivers of Excellence in Strategy Execution

1. Corporate Culture

2. Clear Strategy

3. CEO Commitment

4. Change

5. Communication

6. Competencies

7. Coordination

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T h a n k Y o u . . [email protected]

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