Strategic Excecution Report

University of San Diego
Improving Strategic
Execution
Identifying the Aftermarket’s Organizational DNA and a Path Towards Continued
Success

University of San Diego & United Technologies Aerospace Systems
2 | P a g e
Nathan McCutcheon
Nathan McCutcheon is a current MBA and MS in Finance student at the University of San
Diego. He will graduate with a dual-degree in 2017 and plans to enter the financial sector.
Currently, Nathan works as an Analyst for both United Technologies Corporation and Analytics
Ventures. He has a passion for startups and artificial intelligence. Prior to returning to Graduate
School, Nathan served in the Army as a Combat Medic and Team Leader.
nmccutcheon@sandiego.edu
Ike Ekeh
Before pursuing the MBA/MS Finance dual degree at the University of San Diego (USD), but following
the completion of his BA in Accounting at San Diego State University, Ike spent five years developing
his accounting and management skills. Concurrently studying and working at a private marketing firm
in the San Diego area, he has thrived in leadership roles early in his career. Ike was able to hone his
management skills while simultaneously sharpening the accounting acumen gained through
undergraduate studies. While at USD, Ike has competed in several case competitions and has become
a student member of the CFA Institute with plans to become a charter holder after completing the
CFA program. Ike is currently employed as the Director of Business Development & Corporate Finance
at NDC Data and aims to complete his dual degree in 2017.
ikeekeh@sandiego.edu
Matias Llona Feuereisen
Matias Llona is a current MBA and MS in Finance student at the University of San Diego. He will
graduate with a dual-degree in 2017, and plans to continue his career in corporate finance. He
already has a degree in Agricultural Engineering from Pontifical University of Chile. Prior to his
MBA and MS in Finance studies, Matias developed his career in the sales area for a manufacture
company in Chile.
MLlona@sandiego.edu

Table of Contents
Organizational DNA 2
Overview 2
Organizational Traits 2
Survey Results 3
Improving Strategic Execution 4
United Technology Aerospace Systems 4
Background 4
Surveying the Team 5
Survey Results 5
Interviews 5
Results 6
Pulling the Right Levers 6
Recommendations 7
Conclusion 8

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“A brilliant strategy, blockbuster product, or
breakthrough technology can put you on the competitive
map, but only solid execution can keep you there.”
-Gary L. Neilson

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Organizational DNA
Overview
Gary L. Neilson and The Harvard Business Review
(HBR) have coined The Organizational DNA as a tool
companies may employ to understand their organization’s
ability to execute strategy. Furthermore, this framework
provides management the tools necessary to simulate the
effects of changes within their organization, and to
quantify improvement goals in executing corporate
strategy. Stated simply, the authors created dynamic tools
which allow management the ability to pull various levers
while understanding the implications of those
adjustments. With respect to these levers, Neilson notes
that, “In our experience working with companies and
government agencies, we’ve identifies four fundamental
tools that organizations can wield to achieve that
alignment: decision rights, information, motivators, and
structure. These tools in combination, determine – even
predict – how an organization behaves internally and
performs externally; they are the organization’s genetic
code, so to speak.”1
With this framework in mind, the HBR team partnered
with PWC to release the necessary tools for organizations
to take full-advantage of their hypothesis. The duo
attracted thousands of companies and over one-hundred
thousand employees from within those companies.
Specifically, the project, “Generated a database of
125,000 profiles representing more than 1,000
companies, government agencies, and not-for-profits in
over 50 countries.”2
This impressive response rate
allowed the research team to build out a robust database
and run regressions across variables to understand the
unique dynamics at play across. Most surprising, is that,
“Employees at three out of every five companies rated
their organization weak at execution.”3
While many may
conclude that disgruntled employees may have influenced
these results, it should be noted that roughly 25% of the
respondents came from the executive ranks.
The team then used this database to build 17
organizational traits and correlate those traits to seven
organizational profiles. Discussed further below, these
traits are key to understanding the levers an organizational
may consider utilizing to impact the greatest change
throughout their organization.
1
Neilson, G. L. (2008). The dominant genes & Organizational
survival of the fittest. Strategy&, 1-36.
2
Neilson, G. L. (2008, June). The Secrets to Successful
Strategy Execution. Harvard Business Review, 1-25.
Organizational Traits
Using a survey of roughly 30-questions, the HBR team
created an effective method to quickly determine an
organization’s profile. The team distilled the results of
these surveys into 17 traits that make organizations
effective at implementing strategy. These traits and their
relative strength index are seen in Table 1. These traits
correspond to one or more of the four buildings blocks,
which are located below Table 1.
Rank Organizational Trait Strength
Index
1 Everyone has a good idea of the decision and
actions for which he or she is responsible
81
2 Important information about the competitive
environment gets to headquarters quickly.
68
3 Once made, decisions are rarely second-guessed. 58
4 Information flows freely across organizational
boundaries.
58
5
Field and line employees usually have the
information they need to understand the bottom-
line impact of their day-to-day choices.
55
6
Line managers have access to metrics they need
to measure the key drivers of their business 48
7 Managers up the line get involved in operating
decisions.
32
8 Conflicting messages are rarely sent to the
market.
32
9
The individual performance-appraisal process
differentiates amount high, adequate and low
performers.
32
10
The ability to deliver on performance
commitments strongly influences career
advancement and compensation
32
11
It is more accurate to describe the culture of this
organization as “persuade and cajole” than
“command and control.”
29
12
The primary role of corporate staff her is to
support the business units rather than to audit
them.
29
13 Promotions can be lateral moves. 29
14
Fast-track employees here can expect promotions
more frequently than every three years. 23
15 On average, middle managers here have five or
more direct reports.
19
16
If the firm has a bad year, but a particular
division has a good year, the division head would
still get a bonus.
13
17 Besides pay, many other things motivate
individuals to do a good job.
10
Table 1: The 17 Fundamental Traits of Organizational Effectiveness
Building Blocks Decision Rights Information
Motivators Structure
3

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By ranking these traits, the team identifies decision rights
and information as the two dominant levers to effective
strategy execution. The study also applies a general
definition to each of these levers4
:
With these building blocks, the HBR team examined the
overall results of the survey so that they might analyze
4
which blocks are typically utilized and if any levers are
preferred over others across the executive ranks.
Survey Results
It would be a difficult task to outline all the results from
the Organizational DNA survey. For that reason, we have
decided to highlight the results derived from the Top 5
organizational traits listed in Table 1. If nothing else, the
Top 5 traits provide an excellent framework to both
understand the overall results and provide the reader with
a tangible guide to implementing change within their
organization. From these top traits, the following results
were identified:
1. Everyone has a good idea of the decisions and
actions for which he or she is responsible: in
companies, strong in execution, 71% of
individuals agree with this statement; in
companies with week execution 32%.
2. Important information about the competitive
environment gets to headquarters quickly: 77% of
individuals in strong -execution organizations
agree with this statement, whereas only 45% of
those in weak-execution organizations do.
3. Once made, decisions are rarely second guessed:
71% of respondents in weak-execution companies
though that decisions where second guessed,
whereas only 45% in strong execution companies.
4. Information flows freely across organizational
boundaries: 21% from weak execution companies
and 55% from strong execution companies.
5. Field and line employees usually have the
information they need to understand the bottom
line impact of their day-to-day choices: 61% of
individuals in strong-execution organizations
agree, 28% in weak-execution.
Using the survey results, organizational traits and the key
building blocks, HBR and PWC created a fundamental
framework that allowed organizations a “prescription” to
improve in their ability to execute strategy.
Decision Rights
The underlying mechanics of how and by
whom decisions are truly made, beyond the
lines and boxes of the organizational chart.
Information
What metrics are used to measure
performance? How are activities coordinated,
and how is knowledge transferred?
Motivators
What objectives, incentives and career
alternatives do people have? How are people
influenced by the company’s history?
Structure
The overall organization model, including
the “lines and boxes” of the organization.

4 | P a g e
Improving Strategic Execution
After a company completes the Organizational DNA
survey, HBR utilizes a ratings system to begin
development of a strategic roadmap towards Resiliency.
These ratings offer a starting point so that organizations
may benchmark their executional ability. While no rating
is considered relatively “good” or “bad” it does allow
managers a starting place in understanding their
organizational strengths and weaknesses. The seven
organizational types are:
1. The Resilient Organization
2. The Military Precision Organization
3. The Just-in-Time Organization
4. The Fits-and-Starts Organization
5. The Outgrown Organization
6. The Overmanaged Organization
7. The Passive-Aggressive Organization
Once an organizational trait has been identified, the
company can utilize the HBR and PWC Simulator. This
simulator gives a manager or team the ability to change
one of twenty-eight indicators and watch, year over year,
how that change impacts the organization. The simulation
allows for up to five changes in any one year, and runs in
three year spans of time.
With this framework and toolbox in hand, our team felt it
would be beneficial to apply this framework within a
large-scale corporation. After vetting a list of potential
candidates, we felt that the Aftermarket Business Unit
under the United Technologies Aerospace umbrella made
the most sense for several reasons. First, access to the
organizations middle management, we felt, would allow
for survey results that were unbiased and truly reflective
of the organizations ability to execute strategy. Secondly,
our team thought that the truly global nature of this
organization would allow us to engage with business units
across multiple time zones, which would give us excellent
insight into how communication and information benefits
or affects this organization. Finally, we felt that the year
over year success and growth patterns of this
organization, while impressive, might allow us to
examine a complacent organization with room to defend,
and perhaps increase, their global market share.
5
Corporate Fact Sheet. (2012). Retrieved December 3, 2016,
from
United Technology Aerospace Systems
Background
UTC Aerospace Systems (formerly Goodrich) was
acquired by United Technologies Corporation in 2012.
The acquisition sought to increase the parent’s global
reach within the aerospace industry. Additionally, the
acquisition aimed to diversify the company’s offerings to
substantially cover the needs of commercial aircraft,
satellites, UAVs, and other aerospace flight systems.
United Technologies Corporation identified strong sales,
year over year growth and perhaps a strong management
as justification for the acquisition. For instance, in 2012
UTC Aerospace Systems generated over $14B in sales
across roughly 150 worldwide locations. This fact
demonstrates that the company is one of the world’s
largest suppliers of technologically advanced aerospace
and defense products. 5
More impressive than these large sales figures, is the
amount of sales attributed to the Aftermarket. While
public information does not allow for an actual figure,
publicly available company charts and graphs indicate
somewhere between 60-70% of sales are traced to the
aftermarket.
Leading this team through an impressive growth cycle is
Paul Snyder. Since 2014, Paul has been the Vice President
and General Manager of Aftermarket Services. Since
taking this position, the aftermarket continues to meet or
exceed operational goals. Driven by a strong ACE culture
and a commitment to his customers, Paul has created a
winning culture inside his Aftermarket organization. For
these reasons and more, our team wanted a chance to
explore the workings of this organization so that we might
http://utcaerospacesystems.com/SiteCollectionDocuments/C
orporate-Fact-Sheet.pd
Sales
Aftermarket Original Equipment Manufacturer (OEM)
Chart 1: Aftermarket Sales to overall Sales

5 | P a g e
provide a mutual-beneficial opportunity to improve on
this sustained success.
Surveying the Team
With Paul’s blessing, our team set out to create a robust
list of managers and employees to which we would draw
insight from. Human Resources was critical in this regard,
and our team compiled a list of over 90 managers.
Utilizing Typeform, we allowed individuals surveyed to
respond anonymously. Over a period of 4 weeks, we
gathered survey results and began compiling these results
into a database that was used to effectively analyze the
results.
Survey Results
Compiling the list of responses allowed are team to
individually run each set of responses through the
Organization DNA survey. Doing so, we hypothesized,
would allow us to identify patterns in the results and set
limits to our results. Stated otherwise, we felt we may
need the option to set a range of possibilities for the
organizational type. Instead of ranking the organization as
“Fits-and-Starts,” for instance, we might look at the
results and determine that the organization is best
represented by a spectrum of possibilities.
This hypothesis proved to be useful, and the results of the
final survey are demonstrated in Table 2.
Organizational
Type
Total Rate
of Type
Percentage of
Overall Survey
Responses
The Resilient
Organization
4 10%
The Military
Precision
Organization
5 13%
The Just-in-Time
Organization
6 16%
The Fits-and-Starts
Organization
2 5%
The Outgrown
Organization
4 10%
The Overmanaged
Organization
10 26%
The Passive-
Aggressive
Organization
4 10%
Table 2: Organizational Types
Interviews
Following the online survey, our team felt that firming up
the results of the survey would be necessary for several
reasons. First, understanding the limits of the survey and
the questions asked would give our analysis more
visibility to the complications or frustrations felt with the
survey format. Furthermore, we could use this
opportunity to explain some of the questions, the
implications of those questions on the survey results, and
determine if any results from our analysis needed
adjusting.
Second, it appeared that while the robustness of the
survey allowed us to gather unique insight into the
organization, personal interviews would allow our team
an opportunity to explore the unique aspects of the
organization before finalizing the results and providing
recommendations. In all, we conducted 6 on-site
interviews.
90
Managers
Surveyed
~50%
Response
Rate
38
Questions
Replicated
HBR
Figure 1: Survey Stats

6 | P a g e
Results
By combining the survey with the in person interviews
our team concluded it was best to rate the organization
across a spectrum. For instance, some might point to the
largest proportion of responses being an Overmanaged
Organization as indicative as a likely indicator of the
organization’s ranking. However, armed with the
informational interviews, our team places the
Aftermarket organization on a spectrum which includes:
Passive-Aggressive, Overmanaged and Outgrown.
While no one interview or survey question drove us to
establishing this spectrum, the combination of several
factors influence the decision. For instance, a typical
Overmanaged Organization is described by Senior
leadership who often do not “walk the talk.” Plagued with
micromanaging, these organizations usually see
management more concerned with subordinate tasks than
they do with performing their own tasks. While our
survey results were split on this question (52% of
respondents felt their managers do “walk the talk”) we
also confirmed through interviews that, generally, people
are satisfied with management involvement in their daily
tasks.
In addition to Overmanaged, our analysis shows that the
Aftermarket may exhibit signs of a Passive-Aggressive
Organization. HBR indicates that these organizations
may, “Build consensus easily, but struggles to implement
agreed-upon plans.”6
Stemming from a fundamental
breakdown in decision rights and overall authority to
understand decisions which people are responsible for,
this type of organization finds it hard to implement plans
without falling into an overmanaged state. Support of this
point, comes through the survey results. When asked,
6
“Once made, decision are rarely second-guess,”
respondents seemed to overwhelmingly disagree (64%
disagreed). Furthermore, our interviews bolstered this
point. One manager we interviewed mentioned that
people often do not, “Understand the why,” when it comes
to their assignments. This highlights the point that
improved understanding for responsibilities and tasks
may decrease second-guessing of decision in
implementing various strategies. This fact is important
because as Neilson’s results demonstrate nearly 60% of
respondents from companies rated Resilient agreed that
decisions in their organization were rarely second-
guessed.
The final consideration for implementing a spectrum
came after fully-understanding the characteristics of an
Outgrown Organization and comparing those
characteristics to our survey results. Outgrown
Organizations typically react slowly to market
developments and influence inside these organizations
often depends on title and role. To the latter point, our
survey found roughly 56% of respondents agreed that
within this organization title and role do more to influence
than does reputation and credibility. To the former point,
our interviews uncovered an example that seems to
represent a slower than necessary response to changing
market dynamics. The move to various spare part
“pooling” strategies is something well-known and
accepted throughout the competitive landscape. While the
organization had the opportunity to implement this
strategy many years before Paul took over, one manager
did indicate that implementation is, “at least a year off.”
Overall, this represents a good example of a slow market
adaption and supports our decision to place the
aftermarket on a spectrum of organizational types.
Pulling the Right Levers
Utilizing this insight, it is now possible to determine
which levers would be most beneficial for the
Aftermarket to progress from Overmanaged to a Resilient
Organization. HBR put a scoring system into place so that
an organization could simulate their year over year
progress in moving towards Resiliency.
Passive – Aggressive
Organization
Overmanaged
Organization
Outgrown
Organization
Figure 2: Organizational Spectrum
Passive – Aggressive
Score: 22
Outgrown
Score: 32
Figure 3: Spectrum Scoring
Overmanaged
Score: 26
Resilient
Score: 66

7 | P a g e
Choosing which levers an organization should pull is both
extremely difficult and important in improving their
ability to execute strategy. The wrong lever could provide
a reduction in score, or only temporary desired results.
“Put simply,” Neilson notes, “decision rights and
information are the ‘dominant genes’ in Organizational
DNA.”7
In other words, an organization would be better
off, and see more of an impact, if it chose to pull the levers
associated with these dominant genes. Through their
research the HBR team identifies a paradox in this
distinction. “The irony is that structure is the first – and
often only – lever most senior executives reach for when
organizational performance lags.”8
Often, these types of changes are relatively easy to
implement and highly visible across the organization.
Even though we could not determine if this was the case
within the Aftermarket, we did feel it was important to
highlight this point because an organization could have a
much broader impact by adjusting decision rights and
information flow, than with the other two building blocks.
To prove this point, we used the HBR Simulator. Our
team chose the following 5-levers for the first-year of
simulations:
 Create Centers of Excellence
 Assign Process Owners
 Establish Individual Performance Measures
 Develop an Anonymous Feedback System
 Create-Cross Functional Teams
The results of improving on or implementing these
actions is staggering. Over a 1-year period, we increased
our organizations score by more than 25 points. By
focusing on information and decision rights, we
7
significantly outpaced average companies in a relatively
short time-span.
This demonstrates the importance of the dominant genes
in improving organizational strategy, and shows the
implied benefits the aftermarket could receive from such
improvements. Moreover, the greatest impacting lever in
this simulation was to assign process owners. While we
are aware that this is a current practice in the aftermarket,
we do feel that more could be done to improve these
owner’s decision making authority while also increasing
the accountability to these process owners. Supporting
this point, one manager we interviewed noted that,
“Decision rights here are terrible,” and that, “Corporate
drives the decisions made.” While this is not out of the
norm for large organizations, strides in this area could be
replicated to effectively replicate this simulated results.
The simulation allows us to include an additional year of
changes to reach Resilient status. With the above
information in mind, our team decided the following
levers made the most sense for the second simulation:
 Focus Corporate Staff on Supporting Business-
Unit (BU) decision making
 Clarify and Streamline Decision Making
 Clarify Key Processes
 Assign Process Owners
 Develop an Anonymous Feedback System
Again, the results indicate a positive shift towards
becoming Resilient. Similarly, we see an increase in
performance well above the average market score. What’s
more, these changes enabled us to take the organization
from Overmanaged to fully Resilient in just two years.
With improved decision making authority and a business-
unit that operates with an increased level of autonomy
from Corporate Headquarters, our team believes
incremental improvements will result in the
organization’s ability to execute strategy.
Recommendations
Aside from the above-mentioned shifts, we have
identified several opportunities for improvement. From
improving culture within the organization to promoting
high-performers, there are some relatively easy tasks that
Paul may take to increase strategic effectiveness within
the aftermarket
8
0 20 40 60 80 100
Average Score
Your Score
Comparison of 1- Year Results
Starting Ending
Chart 2: 1-Year Performance Comparison

8 | P a g e
The first of our recommendations involves increasing the
flow of information across organizational boundaries. As
mentioned, information provides the largest effect on an
organization and drives the biggest levels of performance
increases. First, cross-functional teams would allow for
many of the segments to communicate with each other
across the MRO, Technical Services and Commercial
functions within the aftermarket. Several ad-hoc teams do
exist, but perhaps cross-functional teams could drive
improvement of overall goals with a variety of tools and
employees. Instead of operating in siloed units, for
instance, finance and technical services could work
together to reduce cost and understand the budget. Cross
training may also deliver intended results across the
organizations.
Second to cross-functional teams is overall
communication throughout the organization. To combat
this, many organizations offer a cafeteria discount for
employees who opt to sit together during lunch. By
throwing in small discussion leaders, aftermarket could
turn their lunch and learns into a more dynamic two-way
conversation to promote innovations.
Innovation is a tremendous way to increase business and
improve an organization’s culture. Therefore, our group
recommends the company adopt small “pitch
competition” type initiatives. With that, we feel
aftermarket could allow its employees to pitch ideas they
feel would help improve a certain aspect of the business
to the executive staff. If chosen, that employee may be
awarded resources or a team to carry out that project.
Community and University partnerships also make sense
to increasing organizational innovation efforts. Just North
of Chula Vista, the University of California, San Diego is
existing as one of the top engineering schools in the
country. Aftermarket could sponsor exciting case
competitions for relevant problems every semester. The
benefits here are two-fold. First, aftermarket would be
gaining assistance from cutting edge academic
knowledge. Secondly, aftermarket and UTAS could gain
visibility amongst young engineers who may opt to
pursue a career with the company after graduation.
With communication and innovation, our team feels that
strides could be made to improve the culture within the
aftermarket organization. For instance, it is a well-known
policy that no work time is to be allotted for certain types
of events. For instance, the annual Barbeque and
Christmas party are both hosted on the weekend, and do
not offer time for employees to connect during work hours
in a more personal setting. Instead, we recommend that
the company offer an annual event, sponsored by the
aftermarket, which allows the employees to engage in
team building during work hours.
Conclusion
Like many companies (3 out of every 5) included in the
original survey conducted by the dual efforts of the HBR
and PWC teams, Aftermarket’s survey results did not fare
well in regards employee opinion on efficiency of
company execution. The usefulness of this survey is two-
fold given that it both diagnoses the status of execution
levels of the subject organization while also providing
granular information on why that subject may falter in its
execution efforts. Moreover, the simulation capabilities
provided by the vast amount of data in the original survey
gives Aftermarket the ability to forecast reachable goals
and track its own progress of the course of its active
efforts to improve strategic execution.
The decision to conduct interviews sub sequentially came
because of the realization that the major difference
between our analysis and that of the original survey is the
fact that we had a single subject company as opposed to
the 1000+ organizations surveyed by the HBR PWC
tandem. Our unique situation allowed us to reach out to
individuals within the subject group to gain detailed
insight on their opinion of both the survey itself as well as
the results derived from it. This insight played a role into
the recommendations put forth by our team.
After considering the general survey results as well as
information gained through 1-on-1 interviews conducted
with individuals who participated in the survey, our
recommendations built on what the survey prescribes for
companies that express similar symptoms to Aftermarket.
The “levers” that the survey advises should be pulled
share a common theme, one of inclusion and
collaboration. Our recommendations attempt to propose
active changes that would align with what the pulling of
these levers would achieve, further connecting the groups
within Aftermarket, while fostering the innovative spirit
that creates a cohesive environment, and widening the
reach of the company by active inclusion of the business
community around it.

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