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Stop saying strategy execution

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June 15 2017, Implement Consulting Group's office in Zurich hosted an event on changing the way we strategise - Stop Saying Strategy Execution

Published in: Leadership & Management
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Stop saying strategy execution

  1. 1. STOP SAYING STRATEGY EXECUTION ZURICH, JUNE 2017
  2. 2. Why must we change the way we strategise? Reason #1: It’s a faster world
  3. 3. “… Competitive advantages don’t last, or last for a much shorter time than they used to … Fast and roughly right decision-making will replace deliberations that are precise but slow.” Rita Gunther McGrath
  4. 4. A review of the last decades 0 10 20 30 40 50 60 70 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 Year Average age Note: Each data point represents a rolling 7-year average of average lifespan. Projections based on current data Source: Richard N. Foster/Standard & Poor’s Average company lifespan on S&P 500 Index (in years)
  5. 5. Why must we change the way we strategise? Reason #2: Corporate theatre
  6. 6. It’s time to call the bluff on corporate theatre … BU managers study many things, develop options that are saleable and get consensus from key managers. Then they fine-tune the slide deck and sell hard to senior management, hoping for a minimum of input. Afterwards, the organisation is asked to execute. It is typically designed exclusively to match the expectations of the market and avoid disappointing investors. Financial items are manipulated using the same logic. The market guidance is fine- tuned to reveal as little as possible and avoid uncomfortable questions. BU managers come up with a realistic plan and then ask senior management for 120% of the resources required to meet the plan … … knowing from experience that they never get the resources they ask for. Strategy process Budget process Market guidance
  7. 7. Why must we change the way we strategise? Reason #3: Reality dilutes strategy
  8. 8. After strategy is kicked off, daily operations and budgeting processes “take over” and project execution lose traction Time # Strategic projects Strategy period (years) Typically, a strategy period gets kicked off with a lot of direction and ambition, but soon the execution projects lose traction as daily operations and budgeting processes “take over”
  9. 9. Why must we change the way we strategise? Reason #4: More focus on new business needed
  10. 10. Companies often work in few growth areas and close to the core – so they struggle to create substantial new business New geographies New steps in the value chain New products/ services New business models Core business 1 step 2 steps 3 steps New customer segments New channels Company ACME which is very good at geographic expansion: If asked to grow, they usually boost geographic expansion even more (e.g. through M&A or taking so far unknown market risks), instead of searching for other opportunities closer to the core
  11. 11. Why must we change the way we strategise? Reason #5: Complicated organisations
  12. 12. Many companies cram their project portfolio with a large number of projects – focus and traction are lost! 4,000 15-20 85 200 95 Large multinational banks (~45,000 employees) Medium-sized companies (~300 employees) Large companies (~1,000 employees) Medium-sized companies (~200 employees) Ideal number of strategic projects
  13. 13. Strategic initiatives are typically cross-functional and large, often poorly managed by the traditional line organisation Sales Marketing Production R&D Finance Management Admin/staff
  14. 14. Why must we change the way we strategise? Reason #6: Extensive data analysis ≠ great answers
  15. 15. “For every one of our failures, we had spreadsheets that looked awesome.” Scott Cook, CEO, Intuit
  16. 16. In strategy projects, broad analytical work takes place at the beginning, when uncertainty is high 50% 20% 20% 10% 0% Share of analytical work Illustrative phases Analysis and setup Options Consequences Implementation planning Implementation There is little or no focus on analytical data later in the process, when familiarity has been gained
  17. 17. 1 It’s a faster world 2 Corporate theatre 4 More focus on new business needed 5 Complicated organisations 3 Reality dilutes strategy 6 Extensive data analysis ≠ great answers Why must we change the way we strategise?

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