What does this mean to me?How can I use this idea?What can I do right away?
How does HR earn a seatthe CEO’s strategy table?
When you add so much strategic business value that I cannot have ameeting without you there!
What strategy is not…• More, better, faster is not a strategy.• Effectiveness and efficiency are necessary… but not sufficient.• Superb execution of fundamental business processes… is expected.• Being extremely good at what you are supposed to be good at… gets you no extra credit at all.
Effective Strategy =Valued Differentiation x Execution
Strategy is INTERNALKey Point: as well as EXTERNAL
Zappos 98 = 0 08 = 1.2 BillionLooking back, a big reason we hit our goalearly was that we decided to invest our time,money and resources into three key areas:customer service (which would build our brand anddrive word-of-mouth), culture (which would lead tothe formation of our core values), and employeetraining and development (which wouldeventually lead to the creation of our Pipeline Team).Even today, our core belief is that ourBrand, our Culture and our Pipelineare the only competitive advantages we willhave in the long run. Everything else can andwill be copied.
Gartner Research: 443 Global Company Leaders Major Obstacles to Strategy Execution1. Inability to overcome internal resistance to change.2. Trying to execute a strategy that conflicts with the existing power structure.3. Poor or inadequate information sharing between business units/people responsible for strategy execution.4. Unclear communication of responsibility and/or accountability for execution decisions or actions.5. Lack of feelings of “ownership” of the strategy or execution plans among key employees.
Five Foundations of Effective Strategic Thinking Business AcumenPersonal ExperiencePattern Recognition Strategic InsightDisciplined Execution
The Four – I’s• Ignorance• Inflexibility• Indifference• Inconsistency
• Aggressive external market focus.• Ridiculously high level of customer focus.• Keep the “Main Things” the main things.• Bullish on knowledge sharing and learning.• Teamwork is mandatory – not optional• Passion and commitment at all levels.• Foster a healthy paranoia.• Revel in change.
Southwest One type of plane Point-to-point Fast turnsLow fares / no frills Friendly staff
BTO JIT Inventory turnsLogistics vs. Technology VOC Dell
Southwest – Dell – Walmart What is the pattern?• Extreme Efficiency• Minimize Costs to as close to zero as possible – w/o negative impact• All focused on delivering customer value
Good to Great: 1,483 to 11 400 – 700% 15+ years
10 year study of 160 top companies40 distinct industries200 management practicesWinners, climbers, tumblers, losersWinners had an average Total Return to Shareholders of 945%... The Losers only averaged a TRS of 62%From: What (really) Works by Joyce, Nohria, Roberson 11
The Four Primary Practices: 1. A sharply focused, clearly communicated and well- understood strategy for growth. 2. Flawless operational execution that consistently delivers the value proposition. 3. A performance-oriented culture that does not tolerate mediocrity. 4. A fast, flexible, flat organization that reduces bureaucracy and simplifies work.From: What (really) Works by Joyce, Nohria, Roberson 11
The Secondary Management Practices: • Talent = find and keep the best people. • Key leaders show commitment and enthusiasm for the business. • Embrace strategic innovation. • Master the power of partnerships.From: What (really) Works by Joyce, Nohria, Roberson
Financial Performance CR= 104.12% increase in profits Global study: Tolerate 16 countries Quality P&S & Nothing 529 companies Customer Relationship 15,589 respondents Less CR= .404 Employee CR=.277 Satisfaction CR=.275 CR=.249 CR=.334 CR=.280 Empowerment Coaching High Standards CR=.285 CR=.371 CR=.365 CR=.191 CR=.247 Long-term Enthusiasm, Training & Fair Orientation Commitment, Development Compensation RespectFrom: Practice What You Preach by Maister
Evangelist 100% Zone of Affection I love you 90 80 A 5% increase in loyalty 70 Zone of among your best 60 Indifference customers… Loyalty 50 I don’t care about you 40 30 Can produce a profit Zone of 20 Defection increase of 25% – 85%I hate you Terrorist Extremely Somewhat Slightly Very Dissatisfied Dissatisfied Dissatisfied Satisfied Satisfied Customer Satisfaction
Actively disengaged employees can reduce revenues by up to22%, while highly satisfied and engaged employees can drive profits up by as much as a 189%
What do engaged employees look like?1. They give more discretionary effort.2. They consistently exceed expectations.3. They take more responsibility and initiative.4. They receive better customer service ratings.5. They offer more ideas for improvement.6. They promote and model teamwork. 1 - 107. They volunteer more for extra assignments.8. They anticipate and adapt better to change.9. They persist at difficult work over time.10. They speak well of the organization.
The key elements of Fun a strong culture Results FamilyMeaning Friends Positive Culture Praise Fair 1- 10 Pride Freedom
Focus me Know me Care about me Hear me Help me feel proud Equip me Help me see my value Help me growHelp me see my importance SBA
Complaints Employees Comment Competition Cards Customer Advisory Panels Board Focus Website GroupsSurveys VOC Social Media
How do the Best Companies Deliver Superior Customer Service?• From a study of more than 3,000 companies — narrowed down to the top 101 companies that profit from customer care — here are the Top Six Factors that were the fundament tactics used to build and manage extraordinary levels of customer satisfaction and loyalty. 1 -10
1. Extreme Customer Focus They listen to, understand,and respond (often in unique and creative ways) to the evolvingneeds and constantly shifting expectations of their customers. Own the VOC
2. Shared Customer Service CredoThey establish a clear vision of what superior service is, communicate that vision to employees at all levels, and ensure that service quality is personally and positively important to everyone in the organization..
3. Process = Repeatable success• They create systems, processes and protocols to ensure that service delivery is flawless… without stifling the creativity and initiative of their employees.
4. Clear Standards + Accountability They establish concrete standards of service quality and regularly measure themselves against those standards,guarding against the “acceptable error” mindset by establishing as their goal 100% customer satisfaction performance.
Measure & Post Customer Retention TalentCustomer Service MPS Margin Per Sale
5. Customer Focused Employees They hire the best people, train them carefully and extensively so they have the knowledge and skills to achieve the service standards, then empower them to work on behalf of the customers, whether inside or outside the organization.
6. Reward and Celebrate SuccessThey recognize and reward service accomplishments, sometimesindividually, sometimes as a groupeffort, in particular celebrating thesuccess of employees who go “one step beyond” for their customers. Deal decisively with mediocrity
What Inhibits Execution? National Survey of 4,000 Senior Executives 4. Inability to work together (21%) 3. Company culture (23%) 2. Economic climate (29%) 1. Holding onto the past / unwillingness to CHANGE (35%)
In other words…• In order to succeed you need a high-performance team that embraces a strong culture of disciplined execution and accountability while being nimble, agile and adaptable to changes in the marketplace.
Where are we going + how will we behave on the way? Vision + Values Praise + Celebration Focus Eliminate Mediocrity Reward / Differentiation Strategy Punish “No” Measure Track & Post Adjust / Commitment Stakeholders + Transparency Innovate 9 Steps for guiding collation Renewal Ensuring Effective Execution Vision + Values Strategy Training + Plans time / money / Support Alignment Goals / Objectivessupplies / people Tactics / ActionsClear / consistent / relentless Communication Systems Procedures / Protocols @ Execution Repeatable Process
Thank You If you have any questions at all please do not hesitate to send a note or call. My email address is: firstname.lastname@example.org My twitter address is: @awesomelysimpleAlso, you might find value in the ideas I share in my blog. You can sign up for it at: www.blog.johnspence.com Lastly, these slides have already been uploaded to: www.slideshare.net/johnspence