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  • LARRY: 3rd bullet - was it decision in CONSTRUCTION of those structures? And can you be more precise as to how they failed?
  • Bold whatever the key issue is in effect under #3
  • Maybe delete “is and ought, current and future,” so the tool names are parallel - also take out “a look back”
  • Hirschhorn

    1. 1. Strategy Execution Larry Hirschhorn PhD July 23, 2010 ©CFAR 2009 • 100717-G19-10698
    2. 2. Research shows that many strategic change efforts fail <ul><li>The authors of a survey of 898 manufacturing companies across four countries report that success rates in instituting new management practices on the factory floor, such as just-in-time manufacturing, were only moderate at best (1) </li></ul><ul><li>A survey of change efforts found that only 38% demonstrated positive results (2) </li></ul><ul><li>Paul Nutt found, through a careful study of decisions, from deciding to build the Millennium Dome in London to the Denver International Airport, that half of all decisions failed (3) </li></ul>©CFAR 2009 • 100717-G19-10698 <ul><li>D. Holman et al, “Change and innovation in modern manufacturing practices: An expert panel survey,” Human Factors and Ergonomics in Engineering , Volume 10, pp. 121 – 137, 2000. </li></ul><ul><li>C. Glegg and S. Walsh, “Time for a Change! European Journal of Work and Organizational Psychology , 13(2), 217-239. </li></ul><ul><li>P.C. Nutt, Why Decisions Fail: Avoiding the Blunders and Traps that Lead to Debacles. San Francisco Berret-Kohler publishers; 2002 . </li></ul>Much time and money is wasted; leadership credibility is damaged. What’s missing?
    3. 3. In CFAR’s experience, there are five reasons why strategy execution fails…. <ul><li>THE STRATEGY ITSELF Executives don’t take the time to identify and work through enough of the planning assumptions that underpin the strategy. </li></ul><ul><ul><li>Consensus, then, is not deep enough, and in the interests of minimizing conflicts, hot issues are suppressed . </li></ul></ul><ul><li>THE DETAILS Going from the “big picture” to the critical details is not systemically tackled. It is here that unanticipated barriers and bottlenecks can be surfaced. </li></ul><ul><ul><li>Without seeing the interaction of the details, executives miss creative strategies for overcoming barriers. </li></ul></ul><ul><li>THE POLITICS The leadership coalition sponsoring the change underestimates the need for credible connections to important opinion leaders or subgroups with power. </li></ul><ul><ul><li>There is no supportive political coalition which can provide the breathing room and “ tolerance for error” leaders need to execute a strategy </li></ul></ul>©CFAR 2009 • 100717-G19-10698
    4. 4. … ., cont’d. <ul><li>THE FUTURE ORGANIZATION & DECISION MAKING The organizational design associated with the strategy feels abstract. </li></ul><ul><ul><li>As a result, the legacy culture exercises a strong backward tug on efforts to create new decision protocols associated with achieving strategic goals. </li></ul></ul><ul><li>RESISTANCE FROM THE FRONT LINE : In addition to leader’s “push” of their strategic message, they sometimes don’t know how to create “pull” so that people in the trenches are motivated to try out new behaviors and practices associated with the strategy. </li></ul><ul><ul><li>People resist, so execution comes to a halt . </li></ul></ul>©CFAR 2009 • 100717-G19-10698
    5. 5. There are tools to help executives work through each of these challenges. ©CFAR 2009 • 100717-G19-10698 Presenting Issue Tool The strategy itself . Planning assumptions: a look back The details. Backcasting The politics Organization network analysis. The future organization Decision charting: is and ought, current and future The front line History of the future
    6. 6. ©CFAR 2009 • 100717-G19-10698 Think of execution as walking up a staircase 6
    7. 7. ©CFAR 2009 • 100717-G19-10698 We asked you 16 questions on a survey to assess which steps on the staircase might be troubling you 7
    8. 8. We also asked you to specify how far along you were in your implementation effort ©CFAR 2009 • 100717-G19-10698 Most of you were either between 3 and 6 months or more than a year
    9. 9. We calculated the change in agreement with each statement between these two time periods <ul><li>For some items more agreement between the two time periods indicated less anticipated difficulty. For example, “I understand my own role in implementing the strategy.” </li></ul><ul><li>For other items more agreement indicated more anticipated difficulty. For example, “We will stumble on organizational politics as we implement this strategy.” </li></ul>©CFAR 2009 • 100717-G19-10698 These comparisons provide some insight into how the implementation process is experienced as time passes.
    10. 10. ©CFAR 2009 • 100717-G19-10698 These items indicate that people anticipate less difficulty as time goes by 10
    11. 11. ©CFAR 2009 • 100717-G19-10698 These items indicate that people anticipate more difficulty as time goes by 11
    12. 12. We can categorize the areas in which as a whole group you anticipate more difficulty ©CFAR 2009 • 100717-G19-10698 “ Politics”and “details” stand out as important issues. These are areas that require closer attention. 15 6 8 12 7 2 9 4 Item no.
    13. 13. In addition it is striking that many respondents believe that the strategy itself is the result of too many compromises ©CFAR 2009 • 100717-G19-10698 Our strategy is the result of too many compromises
    14. 14. People who are more connected to the implementation effort believe more strongly that the strategy is the result of too many compromises ©CFAR 2009 • 100717-G19-10698 11 3 17 15 16 17 9 Number of people = 14
    15. 15. The leaders of this strategy execution effort are weakly connected to other influential people within the organization. ©CFAR 2009 • 100717-G19-10698 People closer to the effort are more worried about the politics
    16. 16. The average agreement across all groups is strongest for “many moving parts” and “making decisions” ©CFAR 2009 • 100717-G19-10698 Politics Details 16
    17. 17. Let’s examine one tool called “backcasting.” It is used for managing the “details” and overcoming “bottlenecks.” Consider this learning from Iraq <ul><li>In the war for Baghdad, the United States’ generals developed a doctrine or strategy called clear and hold. </li></ul><ul><li>U.S. troops would clear a neighborhood of guerilla fighters and the Iraqi army would hold the area. But Iraqi troops were unprepared so that when U.S. troops retired to their bases, guerillas returned. </li></ul><ul><li>Only when the army changed its doctrine from clearing an area to protecting its residents did they understand what holding required. It meant living close to the neighborhoods, rather than in large distant bases, taking a census of the population, providing services and talking with community leaders. The big stick took a back seat. </li></ul>©CFAR 2009 • 100717-G19-10698
    18. 18. To “hold” an implementation in place you have to attend to the details <ul><li>Consider the early failures of Euro-Disney. Attendance numbers were disappointingly low for the first several years, because the planners and executives missed some telling details. </li></ul><ul><li>Disney did not serve liquor in its parks but the French gave their children diluted wine to drink </li></ul><ul><li>Americans are ready to eat their lunch while walking, munching for example on a hot dog, but Europeans wanted to sit down for lunch. As a result dining facilities were far too overcrowded at lunch. </li></ul><ul><li>In Europe many families associate parks with picnics on the grass, but Disney forbade customers from bringing in any food </li></ul><ul><li>Sometimes we err by missing the trees for the forest! </li></ul>©CFAR 2009 • 100717-G19-10698
    19. 19. One reason that details are missed is because executives use “one step thinking.” <ul><li>Circuit City declared bankruptcy in November of 2008, but in the earlier stages of its cost cutting it reduced expenses by firing its most experienced salespeople, 3,400 of them, in March of 2008 </li></ul><ul><li>There was logic to this. They were the most expensive employees </li></ul><ul><li>But the experienced salespeople gave customers the best service. </li></ul><ul><li>When they were let go service levels fell and so did sales, particularly of big-ticket items (Joyce, 2007). </li></ul><ul><li>Short term gains but longer-term losses! </li></ul>©CFAR 2009 • 100717-G19-10698
    20. 20. But there is a systematic way of using multi-step thinking: Look for problems and solutions <ul><li>Problem Our profits are low </li></ul><ul><li>Step 1 : Fire expensive sales people </li></ul><ul><ul><li>Question How could this fail? </li></ul></ul><ul><ul><li>Answer Our sales will drop, keeping our profits low </li></ul></ul><ul><li>Step 2: Retain some experienced sales people to train and supervise inexperienced sales people </li></ul><ul><ul><li>Question 2: How could this fail? </li></ul></ul><ul><ul><li>Answer 2: Experienced sales people will worry that they will be replaced by the people they train: what is their incentive? </li></ul></ul><ul><li>Step 3: Let experienced sales people share in the upside as sales productivity improves. </li></ul>©CFAR 2009 • 100717-G19-10698
    21. 21. We can show this chain of reasoning visually ©CFAR 2009 • 100717-G19-10698 Accomplishment Obstacle
    22. 22. Now let’s look at a client’s problem. An company selling online education courses wants to develop “front-end” consulting services ©CFAR 2009 • 100717-G19-10698 Accomplishment Obstacle
    23. 23. ©CFAR 2009 • 100717-G19-10698 Here is the Iteration 1 23
    24. 24. ©CFAR 2009 • 100717-G19-10698 Iteration 2 24
    25. 25. 10 conditions that must be true in the future if JG is to reach his goal ©CFAR 2009 • 100717-G19-10698 Eliminate the obstacles and see the Accomplishments chart 25
    26. 26. This chart also shows that conditions 1-4 are necessary for all the other conditions. If you can’t accomplish them don’t get started ! <ul><li>Look at 4: “JG runs a virtual coaching class in which sales people review their experiences” </li></ul><ul><li>This actually will not happen until later. But if JG believes that he could never accomplish this, then he should not get started now. </li></ul><ul><li>Put another way, the backcast predicts that JG’s effort will fail if salespeople do not retain the knowledge they acquired in the training program.That is why he will need the coaching program </li></ul><ul><li>This is how backcasting helps you think “several moves ahead’ and leads you to “cross the bridge (virtually) before you come to it.” </li></ul>©CFAR 2009 • 100717-G19-10698
    27. 27. The backcast let’s you write a “history of the future” <ul><li>Major General David Fastaband, chief of military strategy for General David Petraeus, the architect of the surge strategy in Iraq, wrote an essay entitled, It’s Fourth and Long, Go Deep. </li></ul><ul><li>The essay imagines Petraeus telling the story, two years into the future of the army’s success with its surge </li></ul><ul><li>We call this a History of the future. </li></ul><ul><li>Typically, while it is challenging to write a particular scenario—how we would like our part of the world to look five years from now—it is even harder to write the story of how we get from here to there. This is because the story has to highlight the sequence of changes that led to our goal, not just the features of the goal itself. </li></ul>©CFAR 2009 • 100717-G19-10698
    28. 28. A history of the future makes the change process real and visceral for people. It is a great communications and motivation tool ©CFAR 2009 • 100717-G19-10698
    29. 29. Remember the old poem ©CFAR 2009 • 100717-G19-10698 “ For want of a nail, the shoe was lost; For want of the shoe, the horse was lost; For want of the horse, the rider was lost; For want of the rider, the battle was lost; For want of the battle, the kingdom was lost; And all for the want of a nail.”
    30. 30. CFAR can deliver a backcast over the course of 2-3 weeks <ul><li>Meet with the executive </li></ul><ul><li>Conduct 3-5 groups interviews </li></ul><ul><li>Present a draft backcast chart to the executive </li></ul><ul><li>Revise the backast </li></ul><ul><li>Present a completed backcast to a workshop of the executive and his or her direct reports. </li></ul><ul><li>Work with two direct reports to write a history of the future </li></ul><ul><li>Develop a communication strategy for using the history of the future with the troops </li></ul>©CFAR 2009 • 100717-G19-10698