strategy execution

EXECUTIONSTRATEGY

© 2014 Berlin Asong. All rights reserved. 2

Learning Objectives

I. What is strategy-execution?

i. Understanding the distinction between strategy-execution and strategy.

ii. Understanding the distinction between strategy-execution failure and strategy failure.

II. Why strategy execution is a critical activity of organisational success?

III. What are the causes of strategy-execution failures?

IV. How can the quality of strategy-executions be improved?


Learning Objectives








Mission

Vision

Goals | Objectives

Strategic Analysis

Strategic Choices

Strategy Implementation

Strategy Evaluation

Implementation is concerned with the efforts of…


…translating strategies into actions on adaily basis.


"Walking" those plans—missions, goals, and operational programmes—is challenging.


Walking those planshas been 'unexpectedly'difficult for some firms.


Wal-Mart's failed foray in the German

grocery market.


GM woes in theyears leading up to its

2009 bankruptcy.

GM’s Former CEO Rick Wagoner


After failing to make a profit since it entered the

US grocery market in 2007, Tesco is exiting.

Picture source: gourmetretailer.com


Amongst itswoes, is Yahoo!’s

inability to execute.


It remains to be seen if Merissa Mayer, former Google

exec, now Yahoo CEO can turnaround the company.

Picture: fastcompany.com


…the digital camera inventor filedfor bankruptcy in January 2012, after losing

its competitiveness to rivals.


Learning Objectives








What’s the distinction between strategy failure & strategy-execution failure?


Simplistically…


Strategy Strategy-Execution

Content ProcessWhat How


Strategy Strategy-Execution

Mission

Vision

Goals | Objectives

Strategic Analysis

Strategic Choices


Strategy Evaluation

CO

NT

EN

T


PR

OC

ES

S


…there’s a strong linkbetween strategy and

strategy-execution.

However…


Strategy Strategy-Execution (SE)

Strategy influences SE.

Mission

Vision

Goals | Objectives

Strategic Analysis

Strategic Choices


Strategy Evaluation

CO

NT

EN

T


Strategy Strategy-Execution (SE)

A poorly thought-out strategy affects the performance of

SE.

A poorly executed strategy affects the performance of strategy.


Learning Objectives








Strategy Failure Strategy-Execution Failure

…is a poorly executed strategy.…is a failed strategy.


The failure of astrategy could be traced

to its execution.


Did you notice “failedstrategy” & “poorly executed strategy” share a common feature?


FAILURE


Learning Objectives








Why strategy execution is a critical activity of successful

organisations?


To be successful,you must execute.

1

Source: iredellrunners.com

No matter how great your idea is, if you can’t execute it,

you’re not different from someone without an idea.

30© 2014 Berlin Asong. All rights reserved.


…is a measureof firm’s future performance.

2

Strategy execution…


…has seen blackberry maker RIM lost 87%

market value.

Failure to execute…

26. 06. 2012NASDAQ


…has seen Nokia lost 85% market value.

Failure to execute…

26. 06. 2012NYSE


Mission

Vision

Goals | Objectives

Strategic Analysis

Strategic Choices


Strategy Evaluation

3

Resources are wasted when firms fail to execute or execute poorly.


Leadership performanceis increasingly measuredby ability to execute.

4


Take a look at all theCEOs (FTSE 100 & S&P 500) who’ve lost the top

job, from 2008–2012. Reason:strategy execution failure.


Nam Yong (LG)

Chris DeWolfe (MySpace)

Rick Wagoner (GM)

Jerry Yang (Yahoo!)

Carol Bartz (Yahoo!)

Olli-Pekka Kallasvuo (Nokia)

Leo Apotheker (HP)

Jim Balsillie and Mike Lazardis (RIM)

Fred Hassan (Schering Plough)

Etc.


People come to workto get the job done.

5

That is, to execute on the firm’s strategy.


…is the sum of allthe jobs done inside thefirm, and by its partners.

Therefore, strategy execution…


60%of strategy-executions fail annually.

Kaplan, R. S. and Norton, D. P. (2006), "Creating the Office of Strategy Management”. [Online] Available from http://hbswk.hbs.edu/item/5420.html [accessed 22 February 2009]

In fact, it’s reported that…


Learning Objectives








Why?30 minutes

60% of strategy-executions fail annually.


Fault the Strategy.

Strategy

Markets


Strategy is out of syncwith changing market’s needs

and expectations.


…by the time Kodak realised digital camera,

especially in the consumer electronics space,

was the future of digital photography, it was too late.


Tata Nano launched in 2009 has been dubbed a flop.

http://www.bbc.co.uk/news/world-asia-india-16427707


India car boss Ratan Tataadmits Tata Nano “mistakes”.

Source: BBC (January 2012)


Fault the strategy-makers.


2010: HP acquired Palm…


…a bid to challengeApple’s iPad, and fend-off

threat to HP’s PC sales.

© 2014 Berlin Asong. All rights reserved. 52Former HP CEO Leo Apotheker

HP’s Apotheker discontinuedTouchPad after 2 months in market.

18 August 2011—


Strategy-makers spend moretime in designing the content ofstrategies than thinking how to implement them, successfully.


Why managers are good at formulatingstrategies but poor at

executing them?


Why?15 minutes


Top executives mistakenlythink strategy execution is meant for those at the lower end of the

organisational chart.

1


Executives are less skilledand lessknowledgeablein the

art& scienceof strategy execution.

2


Countless strategiesare designed without taking

into account the organisation’s ability to execute them.

David Hilliard, “Strategy Execution – Acting on what really matters”.


Managers are trained to plan,

not execute.

Hrebiniak, (2004) “Strategy Execution is the Key”


…this thinking is promotedby business educators.


Purpose & benefits of strategicplans are not (or poorly) conveyed to employees, teams and frontline staff.

3


The chances are, 40% of your workforce can’t articulate the details of the firm’s strategy.


Employee resistance may stemfrom lack of understanding caused by

failure of top management to articulate the merits of strategic plans.


Content of marketing plan,not simplified for

easy understanding.


Poor managementof stakeholders’

expectations.

4


Consumers

Employees Investors

Suppliers/distributors

CommunitiesGovernment/Regulators

Organisation


Fault Structural Factors.


Not assigning clear responsibilities and

accountabilities.Who is responsible for What? Are they equipped enough to carry out the what?


Inter & intra-divisional tensionsa major contributor to its crippling

performance in the 70s & 80s.


Fault employees.


CHANGE.

Strategy-implementation introduces…


Why employeesresist change?


of need for change.Unaware

1


HBR (2010), "How Hierarchy Can Hurt Strategy Execution." Harvard BusinessReview 88, no. 7/8: 74-75. Business Source Corporate, EBSCOhost


The chances are, 40% of your workforce can’t articulate the details of the firm’s strategy.


People feel more comfortable with their existing environment.

2


Psychological insecurity.

3


CHANGE,

Implementation of a strategic plans introduces…

…which sometimes exposes the psychologicalinsecurity of employees. For example,…


Would I losemy job? Would my

duties change?


Would I lose my existing privileges?


Would resources be diverted away from my

unit to other units?


Would I have to learn new skills?


Inadequate support from top management.

4


5

Internal and external stakeholders challenge or are bent on thwarting the execution of marketing plans.


Fault process factors.


Implementation is ill-timed.

1


Phase One Phase Two Phase Three

Strategy-execution’s phasesare poorly designed, disjointed

or not clearly thought-out.

2


Bold but unrealistic plans in terms of goals, resources needed, timescale of achievement, and responsibilities

assigned to individuals, teams and managers.

Source: http://jagoadvisor.com

3


execution strategy.Lackof

How do we ensure success?

4


Lack of/invalid systemsto track & measure theperformance of strategic plans.

5


"People do not do what you expect but what you inspect".


Excellent delivery of customer services is acornerstone of BT’s current marketing strategy.

What mechanism or measureswould you put in place to ensure and

monitor excellent service delivery?

20 minutes


Implementation phaseis delayed, rushedor killed too early.

6


Was the TouchPadkilled too early?


Financial Constraints.


Lack of sufficient funding

Source: www.romania-insider.com


DysfunctionalStrategic Partnerships.


Relationship breakdown with business partners (manufacturer, resource/service provider, distributor,

advertising agency, regulator, community, etc.).


External FactorsBeyond the Control of Strategy-Makers.


PESTEL forces.

External factors beyond the control ofmarketing planners and implementers.

1


Lack of contingencyplanningagainst foreseen & unforeseen market shifts & shocks.

2


Failureto Learn.


Failure to learn frompast execution mistakes

and challenges.


Dysfunctionalorganisational culture.

12


Learning Objectives








QUALITYOF

IMPROVING THE

STRATEGY-EXECUTION


How can weimprove the quality of

strategy execution?


There are many tools for improving the quality of strategy execution, but the McKinsey 7s trumps other models.

…diagnostic value; wholly integrative parts; mirrors the causes of strategy-execution failures.


Source: McKinsey


Shared values

Organisation’smission & guiding

beliefs.


What’s the mission of the organisation?

What are the values of the organisation?

What values does the organisation uphold?

Is the organisation living up to its values?

Are those values constraining or enabling the effectiveness of the 6S?

What are the medium & long-term goals of the organisation?

What are the effects of its goals on staff morale & well-being?

Are the organisation’s values in sync with customers & the larger society?

Are employees, shareholders, divisional units, etc. aligned with its goals?

What do people (customers, shareholders, employees, management, suppliers, etc.) say about the

organisation?

Is the organisation meeting its goals?

Etc.

Diagnostic Questions


Strategy

The means bywhich the firm achieves

its strategic goals.


How does the organisation compete?

What’s the organisation’s competitive priorities?

What is the rational behind the strategy?

Does the strategy fit the organisation’s operating environment?

How does the strategy fare with current and future competitive forces?

Are crucial processes and resources aligned with the strategy?

What are its medium-term & long-term goals?

What strategic trade-offs has the firm made?

What position does the organisation occupy in its industry?

Is the strategy working?

Etc.



Structure

The way work isdivided; authority and

responsibility are defined.


Overall Strategy

Breakdown strategy-execution into specific tasks or jobs attached with SMART goals.

Chunks of goals


How does the organisation organise itself (functional, geographic, divisional, product, hybrid)?

What’s the rational for such structures?

How’s the organisation structure evolved over the years? And why?

How is power distributed in the organisation?

Which person or group wields the stronger influence? And why?

Is power centralised or decentralised?

Is the management flexible or rigid?

Does the structure enable or hinder the performance of employees?

How quick or slow does the organisation respond to outside changes?

Are roles and responsibilities clearly defined?

Etc.



Eliminate barriers to knowledge

sharing among employees,

managers and departments.


Systems

The processes (decision-making, HRM,

marketing, customer service, manufacturing, distribution, IT, security, risk management, etc.)

that define how the strategy would

be achieved.


Which processes are crucial to the organisation’s ability to compete?

Which processes are crucial to the organisation’s ability to deliver value for customers?

Does the organisation possess the processes vital for its survival?

How does the organisation track the performance of these processes?

How effective are these processes?

Etc.



Staff

Quality, quantity &morale of employees; role of

external stakeholders.


Has the organisation got the right quality & quantity of talents?

Has it got the right leadership?

Has it got the right quality and quantity of leaders?

Are staff well trained & motivated?

Is the organisation losing talents to rival firms?

Is the organisation extracting the right level of productivity from staff?

Is the HRM aligned with goals & strategy of the organisation?

Etc.



Definitive Stakeholder

Demanding Stakeholder

Dominant Stakeholder

Discretionary Stakeholder

Power

Interest

High Low

High

Low

Stakeholder Mapping

Adapted from Mitchell, R. K., Agle, B. R. & Wood, D. J. (1997), “Toward A Theory Of Stakeholder Identification And Salience”. Journal of Academy of Management, vol. 22, no. 4, pp. 853-886


Primary Stakeholder

Primary Stakeholder

Secondary Stakeholder

Secondary Stakeholder

Power

Interest

High Low

High

Low

Stakeholder Mapping


Keep themhighly satisfied. Keep them satisfied.

Keep them informed. Monitor them.

Power

Interest

High Low

High

Low

Stakeholder Mapping


Identify & involvethe rightpeople.


Planners must articulatepurpose of strategic plans; listen

to divergent views; listento employees’ concerns.


Top managers mustset an enabling culture that encourages, reinforces and

rewards collaboration.


Leverage the benefits of information communication

technologies to speedKnowledge sharing.


Planners must equip, support and motivateemployees to produce desirable behaviours

necessary for successful implementation.


Build bridges among teams, departments &

divisions.


Style

Organisational culture, behaviour, image; leadership

or management style.


What’s the dominant culture inside?

What values does the organisation uphold?

How has the organisation inherited its current values?

What do people like and dislike about the organisation? And why?

Are the organisation’s values in sync with customers & the larger society?

What’s the prevailing management/leadership style in the organisation?

Is the management/leadership style enabling or constraining employee performance?

Do employees trust the integrity of the board & top management?

What do people inside & outside say about the management/leadership?

What do people inside & outside say about the organisation?

Etc.



Directive style


Coercive style


Consultative style


Participative style


Skills

The capabilities & competencies vital for

successful strategy execution.


The 7 elements combined to create

a network of capabilities vital for successful strategy execution.


What’s the organisation good at?

What are the relative strengths of the organisation?

What are the relative weaknesses of the organisation?

What resources/competences are responsible to the organisation’s current performance?

What assets have been (& will be) crucial to the organisation’s survival?

Has the organisation got the capabilities to survive today & tomorrow?

What do stakeholders like about the organisation?

Etc.


strategy execution

Business

strategy execution

berlin asong

causes of strategy

quality of strategy

execution failures

learning objectivesi

yahoo ceo

us grocery market