Strategy Execution

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?
© 2014 Berlin Asong. All rights reserved.

2

Learning Objectives

I.



3

Mission

Vision

Goals | Objectives

Strategic Analysis
Strategic Choices

Strategy Implementation

Strategy Evaluation


4

Implementation is concerned with the efforts of…

…translating
strategies into
actions on a
daily basis.


5

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


6

Walking those plans
has been 'unexpectedly'
difficult for some firms.


7

Wal-Mart's failed
foray in the German
grocery market.


8

GM woes in the
years leading up to its
2009 bankruptcy.

GM’s Former CEO Rick Wagoner

9

After failing to make a
profit since it entered the
US grocery market in
2007, Tesco is exiting.
Picture source: gourmetretailer.com


10

Amongst its
woes, is Yahoo!’s
inability to execute.

11

It remains to be seen if
Merissa Mayer, former Google
exec, now Yahoo CEO can
turnaround the company.

Picture: fastcompany.com


12

…the digital camera inventor filed
for bankruptcy in January 2012, after losing
its competitiveness to rivals.


13

Learning Objectives

I.



14

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


15

Simplistically…


16

Strategy

Strategy-Execution

Content

Process

What


How

17

Strategy-Execution

Mission
Vision
Goals | Objectives
Strategic Analysis
Strategic Choices


PROCESS

CONTENT

Strategy

Strategy Evaluation


18

However…

…there’s a strong link
between strategy and
strategy-execution.


19

CONTENT

Strategy

Strategy-Execution (SE)

Mission
Vision
Goals | Objectives
Strategic Analysis

Strategy
influences SE.

Strategic Choices

Strategy Evaluation


20

Strategy

Strategy-Execution (SE)

A poorly thoughtA poorly executed out strategy affects
strategy affects the the performance of
performance of strategy.
SE.


21

Learning Objectives

I.



22

Strategy Failure

Strategy-Execution Failure

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


23

The failure of a
strategy could be traced
to its execution.

24

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


25

FAILURE

26

Learning Objectives

I.



27

Why strategy
execution is a critical
activity of successful
organisations?


28

1

To be successful,
you must execute.
Source: iredellrunners.com


29

No matter how great your
idea is, if you can’t execute it,
you’re not different from
someone without an idea.


30

2

Strategy execution…

…is a measure
of firm’s future
performance.


31

26.06.2012
NASDAQ

Failure to execute…

…has seen blackberry
maker RIM lost 87%
market value.

32

26.06.2012
NYSE

Failure to execute…

…has seen Nokia lost
85% market value.

33

3

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

Mission
Vision
Goals | Objectives
Strategic Analysis
Strategic Choices

Strategy Evaluation


34

4

Leadership performance

is increasingly measured
by ability to execute.


35

Take a look at all the
CEOs (FTSE 100 & S&P 500) who’ve lost the top
job, from 2008–2012. Reason:
strategy execution failure.


36

Nam Yong (LG)
Chris DeWolfe (MySpace)
Rick Wagoner (GM)
Jerry Y (Y
ang ahoo!)
Carol Bartz (Y
ahoo!)
Olli-Pekka Kallasvuo (Nokia)
Leo Apotheker (HP)
Jim Balsillie and Mike Lazardis (RIM)
Fred Hassan (Schering Plough)

Etc.

37

5

People come to work
to get the job done.

That is, to execute on the firm’s strategy. 38

Therefore, strategy execution…

…is the sum of all
the jobs done inside the
firm, and by its partners.

39

60%

In fact, it’s reported that…

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]


40

Learning Objectives

I.



41

30 minutes

Why?

60% of strategy-executions fail annually.


42


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

43

Markets

Strategy


Fault the
Strategy.

44

Strategy is out of sync
with changing market’s needs
and expectations.


45

…by the time Kodak
realised digital camera,
especially in the consumer electronics space,
was the future of digital

photography, it was too late.


46

Tata Nano launched in 2009 has been dubbed a flop.


47

India car boss Ratan Tata
admits Tata Nano “mistakes”.

Source: BBC (January 2012)


48


Fault the
strategymakers.

49

2010: HP acquired Palm…

50

…a bid to challenge
Apple’s iPad, and fend-off
threat to HP’s PC sales.


51

18 August 2011—

HP’s Apotheker discontinued
TouchPad after 2 months in market.


Former HP CEO Leo Apotheker

52

Strategy-makers spend more
time in designing the content of
strategies than thinking how to
implement them, successfully.

53

Why managers are
good at formulating
strategies but poor at
executing them?

54

15 minutes

Why?

55

1

Top executives mistakenly
think strategy execution is meant
for those at the lower end of the
organisational chart.


56

2

Executives are less skilled
and lessknowledgeable in the
art& scienceof strategy execution.


57

Countless strategies
are designed without taking
into account the organisation’s
ability to execute them.
David Hilliard, “Strategy Execution – Acting on what really matters”.


58

Managers are
trained to plan,
not execute.

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

59

…this thinking is promoted

by business educators.


60

3

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

61

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


62

Employee resistance may stem
from lack of understanding caused by
failure of top management to articulate
the merits of strategic plans.

63

Content of marketing
plan, not simplified for
easy understanding.


64

4

Poor management

of stakeholders’
expectations.


65

Employees

Investors
Suppliers/distributors

Consumers

Organisation

Government/Regulators


Communities

66


Fault
Structural
Factors.

67

Not assigning clear
responsibilities and
accountabilities.

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


68

Inter & intra-divisional tensions
a major contributor to its crippling
performance in the 70s & 80s.


70


71

Fault


employees.

72

Strategy-implementation introduces…

CHANGE

.


73

Why employees
resist change?


74

1

Unaware
of need for change.

75

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


76

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


77

2

People feel more
comfortable with their
existing environment.


78

3

Psychological

insecurity.

79

Implementation of a strategic plans introduces…

CHANGE
…which sometimes exposes the psychological

,

insecurity of employees. For example,…


80

Would I lose
my job? Would my
duties change?


81

Would I lose my
existing privileges?


82

Would resources be
diverted away from my
unit to other units?


83

Would I have to
learn new skills?


84

4

Inadequate support
from top management.


85

5

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

86


Fault
process
factors.

87

1

Implementation
is ill-timed.


88

2

Strategy-execution’s phases
are poorly designed, disjointed
or not clearly thought-out.

Phase One


Phase Two

Phase Three

89

3

Source: http://jagoadvisor.com

Bold but unrealistic plans in terms of goals, resources
needed, timescale of achievement, and responsibilities
assigned to individuals, teams and managers.

90

4

Lack of

execution strategy.
How do we ensure success?


91

5

Lack of/invalid systems
to track & measure the
performance of strategic plans.


92

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


93

20 minutes
Excellent delivery of customer services is a
cornerstone of BT’s current marketing strategy.

What mechanism or measures
would you put in place to ensure and
monitor excellent service delivery?


94

6

Implementation phase

is delayed, rushed
or killed too early.


95

Was the TouchPad

killed too early?


96

Financial
Constraints.


97

Lack of sufficient funding

Source: www.romania-insider.com


98

Dysfunctional

Strategic Partnerships.


99

Relationship breakdown with business partners
(manufacturer, resource/service provider, distributor,
advertising agency, regulator, community, etc.).


100

External Factors

Beyond the Control of

Strategy-Makers.


101

1

External factors beyond the control of
marketing planners and implementers.

PESTEL forces.

102

2

Lack of contingency
planning against foreseen &
unforeseen market shifts & shocks.


103


Failure
to Learn.

104

Failure to learn from
past execution mistakes
and challenges.


105

12

Dysfunctional

organisational culture.


106

Learning Objectives

I.



107

IMPROVING THE

QUALITY
STRATEGY-EXECUTION

OF


108

How can we
improve the quality of
strategy execution?


109

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.


110


111

Source: McKinsey


112

Shared values

Organisation’s
mission & guiding
beliefs.

113

Diagnostic Questions
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.

114

Strategy

The means by
which the firm achieves
its strategic goals.


115

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.

116

Structure

The way work is
divided; authority and
responsibility are defined.


117

Breakdown strategy-execution into specific

tasks or jobs attached with SMART goals.
Chunks of goals


Overall Strategy

118

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.

119

Eliminate barriers to knowledge

sharing among employees,
managers and departments.


120

Systems

The processes

(decision-making, HRM,
marketing, customer service, manufacturing, distribution, IT, security, risk
management, etc.)

that define how
the strategy would
be achieved.

121


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.


122

Staff

Quality, quantity &
morale of employees; role of
external stakeholders.


123


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.


124

Stakeholder Mapping
High

Definitive
Stakeholder

Demanding
Stakeholder

Dominant
Stakeholder

Discretionary
Stakeholder

Interest

Low
High

Power

Low

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


125

Stakeholder Mapping
High

Primary
Stakeholder

Primary
Stakeholder

Secondary
Stakeholder

Secondary
Stakeholder

Interest

Low
High


Power

Low

126

Stakeholder Mapping
High

Keepthem
highlysatisfied.

Keepthemsatisfied.

Keepthem
informed.

Monitorthem.

Interest

Low
High


Power

Low

127

Identify & involve
the right people.


128

Planners must articulate
purpose of strategic plans; listen
to divergent views; listen
to employees’ concerns.

129

Top managers must
set an enabling culture that
encourages, reinforces and
rewards collaboration.


130

Leverage the benefits of
information communication
technologies to speed
Knowledge sharing.


131

Planners must equip, support and motivate
employees to produce desirable behaviours
necessary for successful implementation.

132

Build bridges
among teams,
departments &
divisions.

134

Style

Organisational culture,
behaviour, image; leadership
or management style.


135

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.

136

Directive style


137

Coercive style


138

Consultative style

139

Participative style

140

Skills

The capabilities &
competencies vital for
successful strategy
execution.

141

The 7 elements
combined to create
a network of capabilities
vital for successful
strategy execution.


142


What’s the organisation good at?
What are the relative strengths of the organisation?
What are the relative weaknesses of the organisation?
Whatresources/competencesareresponsibletotheorganisation’scurrentperformance?
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.

143


144

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