FOR MORE CLASSES VISIT tutorialoutletdotcom Managing Internal Operations Strategy execution involves the alignment of the company’s day-to-day operations with the strategy or ensuring that internal elements of the organization are orchestrated in harmonious pursuit of its strategy: “Alignment must include linking cultural practices, strategies, tactics, organizational systems, structure, pay and incentive systems, building layout, accounting systems, job design, and measurements systems—everything” (Watson, 2005).

1. Managing Internal Operations Strategy
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Managing Internal Operations
Strategy execution involves the alignment of the company’s day-to-day
operations with the
strategy or ensuring that internal elements of the organization are
orchestrated in
harmonious pursuit of its strategy: “Alignment must include linking
cultural practices,
strategies, tactics, organizational systems, structure, pay and incentive
systems, building
layout, accounting systems, job design, and measurements systems—
everything” (Watson,
2005).
The concept of policy management or deployment looks at the strategy
execution process
another way. Once management decides on a strategy, they will decide
on an approach or
policies to pursue the strategy (Watson, 2005). Witcher (2003) described
a process he called
“policy management,” or hoshin kanri as it is called in Japan, which in
part is back-and-forth
communication and collaboration between managers and upper
management to translate
policies laid out by upper management into objectives the manager
could work on.
Watson (2005) described nichijo kanri as different from hoshin kanri,
although both of these
concepts are part of “policy deployment.” Nichijo kanri translates

2. objectives into employee
tasks needed to accomplish daily operations but controls the tasks,
moving the company in
its strategic direction. So, both hoshin kanri and nichijo kanri encourage
operational
excellence in pursuit of the company’s strategy. Firms like HP, Xerox,
and Proctor and
Gamble have used their own forms of policy deployment.
These concepts help explain how upper management’s ideas for strategy
flow down through
the organization into actions and tasks performed by employees at all
levels in the pursuit of
that strategy, or “strategy execution.”
In addition, there are a number of well-known, widely used methods to
make business
processes more efficient in general, including Six Sigma, Lean Six
Sigma, TQ or TQM,
Kaizen, ISO 9000, Baldrige Criteria, and other quality initiatives. You
can find out more about
Baldrige Criteria at Baldrige Performance Excellence Program.
Implementing a quality improvement initiative like TQ or Six Sigma can
be the company’s
main strategy, or it can be used in conjunction with a traditional strategy,
like acquiring a new MBA 700 Module Ten 1 business. When you
incorporate the new business, you want to improve the quality of new
processes your company will now use.
Quality improvements to internal operations became part of Capital
One’s strategy several
years ago. Capital One had acquired a number of businesses since its
IPO in 1997. In early
2005, Capital One had decided to refocus its strategy because its new
banking division, with
its Direct Banking business, resulted in significantly more customer
activity (opening
accounts, making deposits and withdrawals, transferring funds between

3. accounts, etc.) and
a different set of internal processes to support direct banking. Capital
One executives
implemented a new strategy of “process management” to move away
from their older
system and culture of traditional business units; their internal operations
had grown more
complex with significantly more customer interactions, and it became
necessary to view
entire processes rather than tasks. They implemented Six Sigma in order
to redesign their
new processes in a more efficient manner, resulting in higher customer
satisfaction. Part of
the Six Sigma implementation’s Analyze phase included analyzing
customer surveys, which
revealed that a primary reason why customers never finished the new
account application
process was because they forgot to mail an opening deposit. Capital One
introduced a
process to follow up with customers who simply do not complete the
application (Immaneni,
McCombs, Cheatham, & Andrews, 2007).
As part of this Six Sigma implementation, Capital One installed an
information system, the
Total Customer Complaint System, to record any customer complaint
across all functional
areas that interact with customers. Capital One saw significant results
using Six Sigma
across processes including customer complaint handling, opening new
accounts, and
marketing processes (Immaneni, McCombs, Cheatham, &
Andrews, 2007, p. 49).
The DMAIC phases, for existing processes, are the most commonly used
Six Sigma
implementation.

4. The Six Sigma’s DMAIC phases are (ASQ, n.d.): 2 Define: During this
optional phase, define the process to be improved.
Measure: In this phase, take measurements of the performance of the
process.
Analyze the data and the process. Use root cause analysis to determine
causes
for process performance issues.
Improve: Here, you identify areas that require improvement based on a
root
cause analysis and improve.
Control those improvements to ensure that the gains stick over time.
MBA 700 Module Ten For example, in the Define phase, Capital One
inventoried all of its processes and then
identified customer expectations for several dozen key processes. It then
began the MAIC
phases to improve these processes beginning with the most critical
processes (Immaneni,
McCombs, Cheatham, & Andrews, 2007, p. 46).
The methods or tools the organization uses to improve its operations and
performance, like
Six Sigma or Baldrige Criteria, are useful, but Nohria, Joyce, and
Roberson (2003)
recommended focus on strategy, flawless operational execution, growing
the right company
culture that promotes a good performance, and creating an efficient
structure.
Corporate Culture and Leadership
The definition of corporate culture is “the system of shared actions,
values, and beliefs that
develops within an organization and guides the behavior of its members”
(Schermerhorn,
Hunt, Osborn, & Uhl-Bien, 2010, p. 366). For our purposes, we are
most interested in those
aspects of the organization’s culture that promote strategy execution.
All too often strategists will introduce a new strategy, and even seek to

5. change
organizational culture to some degree without attending to one of the
key ingredients
of making real changes in the culture—the artifacts (symbols,
ceremonies, sagas,
values, norms, etc.) which help define the culture. (Higgins &
McAllaster, 2004)
Consider Apple, cofounded in 1976 by Steve Jobs. By 1983, this single-
product company
was growing and needed a new CEO from the outside with marketing
experience. They
hired John Sculley, a Wharton MBA, away from PepsiCo, believing him
to be a good fit with
Apple’s culture and the right CEO to lead the still-young company and
coach its youthful
cofounder, Jobs (Simmons, 2007).
Apple quickly made its product line broader, but with it came a change
in strategy, as well as
Steve Jobs’s ouster. Sculley led the company for many profitable years
but was replaced in
1994 when it became apparent that Apple’s innovation star was fading
along with market
share. He was replaced by Michael Spindler, who was himself replaced
by Gil Amelio. And
Apple’s culture changed as needed during this these transitions. After a
12-year absence,
Apple cofounder Jobs returned to the company’s helm (Simmons, 2007).
In an interview, Apple CEO Steve Jobs said this about realigning
Apple’s culture to fit his
strategy after his return:
That's why you don't see any big posters on the walls around here,
stating our
mission statement. Our corporate culture is simple. So the key is to have
good people MBA 700 Module Ten 3 with a passion for excellence.
When I got back, Apple had forgotten who we were.

6. Remember that "Think Different" ad campaign we ran? It
was certainly for customers,
but it was even more for Apple. That ad was to remind us of who our
heroes are and
who we are. Companies sometimes do forget. (“Voices of Innovation,”
2004)
One of the first things Jobs did after his return to Apple was to reset the
myths and the
values of the company back to his vision and strategy.
Do you believe the culture for any company, including your own, helps
in the execution of the
organization’s strategy? Consider Apple, with its slogan “Think
Different” and the myth it has
created around its announcements of new, innovative products—iPod,
iPad, iPhone. Or the
way Walt Disney Company refers to employees as “cast members” as
they service
customers at stores or theme parks (Higgins & McAllaster, 2003).
Or Southwest Airlines with
a 129-employee strong “Culture Committee” and whose flight attendants
have rapped flight
safety instructions to passengers (Gwynne, 2012).
Setting the right culture can be part of executing the company’s strategy.
But who leads the
strategy making and execution within the organization? Typically, the
CEO runs the shop
and delegates strategy execution to a chief operating officer (COO). The
COO is concerned
with ensuring that strategy is executed within the operations of the
organization. But is that
the most effective way to ensure that the right strategy is executed?
The chief strategy officer or CSO is a new position that many companies
are adding to their
chain of command as a top-level company leader. With rapidly changing
global markets,

7. frequent macro-environmental changes, and the need to compete with
rivals introducing new
products and services all contributing to a growing workload for the
CEO, it makes sense to
create a position tasked solely with strategy oversight (Breen, Nunes,
& Shill, 2007, p. 86).
The CEO is still responsible for strategy, but the CSO is charged with
exploring strategic
alternatives and adding value, perhaps from prior experience in setting
and executing
strategy. The CSO may have more flexibility to visit the trenches,
returning to the corporate
office with fresh strategy ideas to debate and refine with the CEO. The
CSO resides near the
top of the organization on the organizational chart, often as a director
with his or her own
reports or as an advisor to the CEO (Angwin, Paroutis, & Mitson,
2009).
With a rapidly changing world that includes natural and manmade
disasters, it makes sense
for a company to dedicate responsibility to a position that is dedicated to
strategy. Scenario
planning is not considered a mainstream strategy tool yet (Courtney,
2009). 4 MBA 700 Module Ten Scenario planning would proactively
consider more possibilities and more details on how the
company could respond to different situations (and then the most likely
situations that result
after that situation, and so on).
You may soon find the CSO role on your own organizational chart
overseeing the
formulation and execution of strategy at your own organization. MBA
700 Module Ten 5
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