How  to  Kill  a  Company:  Troubleshoo7ng  Strategy  Execu7on  

Failures      

Webinar  will  start  shortly    

Antonio  Nieto-­‐Rodriguez  Professor  at  Duke  Corporate  Educa7on  

 Strategy  Leaders  Forum  

26-­‐30  April,  The  Address  Dubai  Mall  THREE  global  gurus  *  SIX  hands-­‐on  workshops  *  THIRTY-­‐TWO  strategy  leaders  

 Register  today  at  www.strategyleadersforum.com    

     Presenting For the First Time

Rita McGrathGlobally Recognised Expert on Innovation and

Strategic Management

Back by Popular Demand

Jeroen De FlanderOne of the World’s Most Influential Thinkers on Strategy Execution

     -­‐  Tonight’s  webinar  will  be  recorded  –  an  email  will  be  sent  tomorrow  with  a  link  to  the  audio  and  slides    -­‐  Ques7ons  can  be  posed  throughout  using  the  ‘ques7ons’  box  they  will  be  answered  at  the  end  of  the  webinar    -­‐  Unanswered  ques7ons  will  be  answered  later  and  posted  to  our  website    -­‐  Please  provide  us  with  your  feedback  at  the  end  by  following  the  link      

Housekeeping  

Antonio  Nieto-­‐Rodriguez,  Professor  at  Duke  Corporate  Educa7on  Antonio  is  author  of  the  acclaimed  book  on  strategy  execu7on,  The  Focused  Organiza7on.  He  has  been  featured  in  several  magazines,  including  The  Economist,  Singapore  Management  Ins7tute  and  Strategy  Business  Review.  He  is  the  founder  of  one  of  the  largest  LinkedIn  groups  for  Strategy  Execu7on,  StrateXecu7on,  which  has  more  than  5,000  members  worldwide.      

Today’s  Presenter  

….RESEARCHED  STRATEGIES  OF  100  TOP  CORPORATIONS…..    

 ……  most  of  their  strategies….  ….are  very  similar  !!  

 Growth          Expansion          Market  Share        Sustainability          Shareholder  value  …….  

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…..YET  ….  

….MANY  WELL    KNOWN    AND  ONCE  SUCCESSFUL  COMPANIES  

DISAPPEARED….  

Blockbuster,  the  former  king  of  video  rentals,  filed  for  Bankruptcy  on  Sep  2010  

   

AYer  being  squeezed  by  Internet  retailers  and  weighed  down  by  too  much  

debt,  Borders  Group  Inc.  filed  for  Bankruptcy  in  Feb  2011  with  plans  to  close  about  30%  of  its  642  stores  and  

focus  on  e-­‐books  and  non-­‐book  products.  

Biggest  Bankruptcy  case  ever.  Enron  was  established  in  1985,  and  soon  became  the  7th  largest  company  of  in  terms  of  revenue.  It  bought  electricity  from  

generators  and  sold  it  to  customers  for  earning  the  humungous  profits  it  did.  In  order  to  keep  gecng  credit,  it  kept  away  $500  million  in  debt,  which  was  kept  off  the  book,  but  once  the  amount  exceeded  

$638  million.  

 WorldCom  Inc,  once  the  largest  US  based  Telecommunica7ons  Company,  went  bankrupt  aYer  its  revela7on  of  $4  billion  expenses,  wrongly.  It  had  more  than  20  million  customers,  and  80,000  employees.  At  the  7me  of  bankruptcy,  it  was  considered  as  one  of  the  largest  and  very  famous  companies  in  USA,  with  a  

value  of  $100  billion  

Lehman  Brothers,  the  company  with  a  value  of  $600  billion  and  one  of  the  world’s  largest  financial  corpora7ons,  filed  for  bankruptcy  in  2008.  The  news  sent  shock  waves  around  the  world,  and  within  no  7me,  the  company  shares  dropped  by  a  whopping  94  percent  

which  headlined  the  2008  global  financial  crisis.  It  was  sold  for  $1.  

 May  29,  2008  marked  the  end  for  the  85-­‐year-­‐old  financial  powerhouse  Bear  Stearns.  Problems  started  appearing  in  July  2007,  aYer  two  of  the  companies  hedge  funds  imploded.  AYer  months  of  heavy  write-­‐downs,  things  came  to  a  head  in  March  when  rumors  began  to  

swirl  about  Bear  Stearns  financial  health.  In  late  May  the  fiYh-­‐largest  investment  

bank  in  the  U.S.  was  no  more  

TOP 7 REASONS FOR FAILURE

①  Market needs change faster than the organization

②  Competition comes with a better strategy

③  Cost base increase faster than the growth

④  Too much focus on the short-term

⑤  Wrong investment decisions

⑥  Poor leadership

⑦  Unethical behaviour

External Environment

Internal Organization

People Individuals

A robust Strategy Execution Framework should cover all these elements

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…..BUT  WHY  MANY  EXECUTIVES….  

….IGNORE  THE  IMPORTANCE  OF  STRATEGY  EXECUTION  

WHAT DO THESE PEOPLE HAVE IN COMMON?

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THE  EXECUTION  DILEMMA    

To  successfully  implement  your  organiza7ons  strategy  you  need  to    

Run  your  Business    while    

Changing  it    at  the  same  7me  

THE EXECUTION DILEMMA

Business Operations Running-the-business

q  Core and support processes q  Generates most of the revenues q  It is about surviving - keeps the company alive

q  Objectives are short-term q  Benefits are rather predictable q  Commercial, financial and performance targets

q  Efficient, productive and fast – traditional “silo” q  Standardization, automation, outsourcing q  Technical Experts

Strategic Initiatives Changing-the-business

q  It is the future of the organization q  Strategic Initiatives and projects q  It is about changing/transforming the business

q  Objectives are medium and long-term q  Benefits less tangible&quantifiable – uncertainty q  Targets are strategic and closer to the vision

q  Flexible, agile, and multi experts – transversal q  Processes are unique, non-repetitive, evolving q  Generalist

Strategy  Formula7on  Vision  and  Envisioned  Goal  

Priori7za7on  and  Organiza7onal  Alignment  

Long  Term  Objec7ves  Transforma7on,  Strategic  

Strategic  Planning  Strategy  into  Objec7ves  

Short  Term  Objec7ves  Commercial,  Financial,  Performance  

Run  the  Business  Exploi7ng  current  capabili7es  and  exis7ng  assets  

Departmental  Targets  Individual  Goals  

Short  Term  Value   Long  Term  Value  

Change  the  Business  Exploring  future  capabili7es  and  new  assets  

Project  Goals  

STRATEGY EXECUTION FRAMEWORK Top

Managem

ent M

iddle M

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Staff

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2  

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Strategy  Formula7on  Vision  and  Envisioned  Goal  

Priori7za7on  and  Organiza7onal  Alignment  

Long  Term  Objec7ves  Transforma7on,  Strategic  

Strategic  Planning  Strategy  into  Objec7ves  

Short  Term  Objec7ves  Commercial,  Financial,  Performance  

Run  the  Business  Exploi7ng  current  capabili7es  and  exis7ng  assets  

Departmental  Targets  Individual  Goals  

Short  Term  Value   Long  Term  Value  

Change  the  Business  Exploring  future  capabili7es  and  new  assets  

Project  Goals  

STRATEGY EXECUTION FRAMEWORK Top

Managem

ent M

iddle M

anagement

Staff

1  

2  

5  

3  

4  

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Com

mun

icat

ion

/ R

epor

ting

/ Fee

dbac

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ecis

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Mak

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6  

Balanced  Scored  Card  

Strategic  Ini7a7ve    Mgmt  

   

Ques7ons?      

 Strategy  Leaders  Forum  

26-­‐30  April,  The  Address  Dubai  Mall  THREE  global  gurus  *  SIX  hands-­‐on  workshops  *  THIRTY-­‐TWO  strategy  leaders  

 Register  today  at  www.strategyleadersforum.com    

     Presenting For the First Time

Rita McGrathGlobally Recognised Expert on Innovation and

Strategic Management

Back by Popular Demand

Jeroen De FlanderOne of the World’s Most Influential Thinkers on Strategy Execution