Preventing Strategic Gridlock B I Z

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Preventing Strategic Gridlock B I Z

  1. 2. Preventing Strategic Gridlock Leading Over, Under & Around Organizational Jams to Achieve High Performance Results AUTHOR: Pamela S. Harper PUBLISHER: Cameo Publications DATE OF PUBLICATION: 2003 NUMBER OF PAGES: 229 pages Book pic
  2. 3. <ul><li>Understand how a leader’s mistaken assumptions can create gridlock and organizational jams. </li></ul><ul><ul><li>This must-read for business managers provides real-life stories on companies from Mattel to Procter & Gamble, Daimler-Chrysler, to Coca-Cola. Pam Harper proposes six guidelines of organizational reality to UNLOCK your company from Strategic Gridlock, so you can drive it down the road to high-performance. </li></ul></ul><ul><li>Whether your company is in e-commerce, going public/private, going through a merger/acquisition, entering a new market, reorganizing, outsourcing, or introducing new technology, all these situations can bring about strategic gridlock. </li></ul>THE BIG IDEA
  3. 4. PART 1 Chapter 1: Strategic Gridlock Alert <ul><li>Jill Barad resurrected Mattel’s Barbie clothes and accessories from 200 million dollars in 1981 to 1.9 billion in 1997. </li></ul><ul><ul><li>Mattel’s market share enjoyed a $16 boost to price per share, but the silent gridlock had already begun to permeate the toy company. </li></ul></ul><ul><li>Mattel’s acquisitions such as The Pleasant Co., and initiatives to make the company a “global family products company” through acquiring </li></ul><ul><ul><li>The Learning Company (a software manufacturer) brought the giant tiptoeing into unfamiliar territory. </li></ul></ul><ul><ul><li>In 1998, revenues started plummeting, and Mattel share price went all the way down to $10. So what happened? </li></ul></ul><ul><ul><ul><li>Executives overlooked or underestimated warning signs: their key customer Toys R Us instituted new buying policies, and did not address this issue. </li></ul></ul></ul>
  4. 5. CHAPTER 1: Strategic Gridlock Alert <ul><ul><ul><li>Barad’s impatience to move forward, jumping from one strategy to another was another problem. Her urgency was directed towards the wrong initiatives or solutions. </li></ul></ul></ul><ul><ul><ul><li>Over-relying on what should have worked, means missing the gaps in strategy and what is the reality with the stakeholders. </li></ul></ul></ul><ul><li>Wisdom in a nutshell: </li></ul><ul><ul><li>Strategic gridlock flourishes in uncertain times. Advances in technology, globalization, communication, and business climate make it difficult for big companies to move. </li></ul></ul><ul><ul><li>Beware of mistaken assumptions about your “organizational reality”. </li></ul></ul><ul><ul><li>Strategic gridlock builds up over time. Mattel’s problems grew over a three-year period. </li></ul></ul><ul><ul><li>Strategic gridlock can be prevented. Leaders must consider the guidelines and principles of organizational reality when thinking and planning their next moves. </li></ul></ul>
  5. 6. <ul><li>This is the tendency to adopt previously successful solutions without regard to whether they can work in your organization now. </li></ul><ul><ul><li>No one can count on history repeating itself. </li></ul></ul><ul><ul><li>You cannot simply transplant your success from one project to another. </li></ul></ul><ul><ul><li>Do not become so focused on an outcome or end point that you do not see multiple ways to reach it. </li></ul></ul><ul><ul><li>Your organization is experiencing this type of roadblock if: </li></ul></ul><ul><ul><ul><li>You’ve spent little or no time exploring similarities and differences between your organization and the one you’re benchmarking for best practices. </li></ul></ul></ul><ul><ul><ul><li>You’ve spent little or no time exploring the combination of external and internal circumstances that you need in place to increase the likelihood your strategy or initiative will succeed. </li></ul></ul></ul>CHAPTER 2: One-Size-Fits-All Thinking
  6. 7. <ul><ul><ul><li>You’ve spent only a slight or no effort to modify previous strategies to meet the needs of stakeholders </li></ul></ul></ul><ul><ul><ul><li>You don’t pay attention to the needs of all stakeholders. </li></ul></ul></ul>CHAPTER 2: One-Size-Fits-All Thinking
  7. 8. <ul><li>This is the tendency to over-rely on “organizational surgery” to solve persistent organizational problems. </li></ul><ul><li>“ Off with their heads!” is not a very wise approach to solving company problems. It is a short-term solution to problems that may require long-term thinking. </li></ul><ul><ul><li>Persistent organizational problems that characterize strategic gridlock are often bigger than any one person or group of people. In this case, new brains will definitely bring about change, but not necessarily progress. </li></ul></ul><ul><ul><li>Decision-makers may reorganize but the source of the gridlock may still persist. </li></ul></ul><ul><ul><li>A “star” in one position may not be a “star” in another type of position or company. </li></ul></ul><ul><ul><li>Companies go to extreme lengths to find and keep talent, but at the first sign of financial difficulty, these talents are laid off to lower overhead. </li></ul></ul>CHAPTER 3: Management by Lobotomy
  8. 9. <ul><ul><li>Reorganizations and cutbacks will not solve persistent problems when there is a basic dysfunction underlying in the culture. </li></ul></ul><ul><ul><li>Stars will only continue to shine if the same circumstances and teammates stay with them on other projects. </li></ul></ul><ul><ul><li>Companies evolve over time, so it’s vital to go beyond job descriptions to understand the value of each person and function. </li></ul></ul>CHAPTER 3: Management by Lobotomy
  9. 10. CHAPTER 4: Act Now, Think Later <ul><li>This is the tendency to assume you have enough information to select strategies, and make key decisions that meet your organization’s real needs. </li></ul><ul><ul><li>Your organization may be experiencing this roadblock if you find yourself putting out fires more often. </li></ul></ul><ul><ul><li>Unexpected difficulties and obstacles occur in the course of execution of initiatives more often than you’d like. </li></ul></ul><ul><ul><li>Despite your quick responses, organizational problems persist. </li></ul></ul><ul><ul><li>Committing to a strategy while overlooking critical issues of your organizational reality is at the root of organizational gridlock. </li></ul></ul><ul><ul><li>Test your assumptions about stakeholders. Who are essential to advancing your initiative? Who will kill it? </li></ul></ul>
  10. 11. <ul><li>This is the tendency to expect the organization will immediately change once a new vision statement, a tagline, or a memo has been released. </li></ul><ul><ul><li>A simple announcement does not necessarily translate to a change in behavior. </li></ul></ul><ul><li>This type of roadblock occurred during the merger of Daimler-Benz with the Chrysler Corporation. </li></ul><ul><ul><li>In 1998, this “merger of equals” turned out to be a takeover disguised as a merger. </li></ul></ul><ul><ul><li>The Daimler-Chrysler banner went up, and clashes between executives of both companies were on the rise after a few months of the doomed marriage. </li></ul></ul><ul><li>Nearly two-thirds of Chrysler’s senior management had resigned or been fired. It takes more than a merging of company names to produce a unified corporation. </li></ul><ul><ul><li>It is important to anticipate and plan for ways to reduce organizational resistance. </li></ul></ul>CHAPTER 5: Magic of the Marquee Thinking
  11. 12. <ul><ul><li>Organizational resistance increases in direct proportion to the gap between what executives say and do. </li></ul></ul><ul><ul><li>Resistance can look like many things, even agreement. </li></ul></ul><ul><ul><ul><li>By understanding the needs of others, you can detect and anticipate resistance before it becomes a major problem. </li></ul></ul></ul><ul><ul><li>Don’t underestimate the power of formerly agreeable stakeholders to undermine even the best ideas. </li></ul></ul><ul><ul><ul><li>In uncertain times, resistance can come from the most unlikely places as agendas change. </li></ul></ul></ul>CHAPTER 5: Magic of the Marquee Thinking
  12. 13. <ul><li>This is the tendency to assume that introducing a rapid series of initiatives will move the organization forward. </li></ul><ul><li>Procter & Gamble’s CEO Durk Jager resigned after a turbulent year and a half of trying to push the ambitious “Organization 2005” effort. </li></ul><ul><ul><li>Among the initiatives were moving from a business structure of four geographic business units to seven product-aligned Global Business Units </li></ul></ul><ul><ul><li>shrinking the number of profit centers from 100 to 7, shifting R&D responsibilities from a centralized structure to the Global Business Units </li></ul></ul><ul><ul><li>overhauling P&G’s reward systems and training programs, and cutting 15,000 workers from the global roster of 110,000 – among other major moves. </li></ul></ul><ul><ul><ul><li>The Roller Coaster roadblock is identified by a pattern of rapidly starting and stopping a series of strategies and initiatives </li></ul></ul></ul>CHAPTER 6: Roller Coaster Thinking
  13. 14. <ul><ul><ul><li>How you introduce a plan is more important than what you introduce. </li></ul></ul></ul><ul><ul><ul><li>When things don’t go as planned, check you assumptions about the causes before changing direction. </li></ul></ul></ul><ul><ul><ul><li>The more chaotic the business conditions, the more important it is to think through plans and strategies that address the organization’s real needs at this time. </li></ul></ul></ul>CHAPTER 6: Roller Coaster Thinking
  14. 15. <ul><li>The tendency to assume there is only one “tone” of reality. </li></ul><ul><li>Each of us has his or her own personal reality. </li></ul><ul><ul><li>We assume others will perceive situations as we do. </li></ul></ul><ul><li>M. Douglas Ivester, CEO of Coca-Cola, learned this lesson the hard way. In two years, the company that depended so much on the public perception of its products got a very bad rap. </li></ul><ul><ul><li>It began with 200 people falling ill from contamination of products in bottling plants in France and Belgium. </li></ul></ul><ul><ul><li>Instead of immediately addressing the public, Ivester waited until the products were banned in Europe and criticism mounted. </li></ul></ul>CHAPTER 7: Tin Ear
  15. 16. <ul><ul><li>Compounding the problems were African-American employees filing discrimination suits against the company, and of course the timely demotion of one of Coke’s most highly respected African American executives. </li></ul></ul><ul><ul><li>In December of 1999, under great pressure from the directors, Ivester resigned. </li></ul></ul><ul><ul><ul><li>Do not think everyone sees things the way you do. </li></ul></ul></ul><ul><ul><ul><li>Do not assume people will tell you how they truly feel. Learn to pick up on non-verbal cues. </li></ul></ul></ul><ul><ul><ul><li>Frequent complaints from stakeholders mean your perspective is different from theirs </li></ul></ul></ul>CHAPTER 7: Tin Ear
  16. 17. CHAPTER 8: Lighthouse <ul><li>The tendency to assume it’s best to “stay the course” despite clear-cut warning signs. </li></ul><ul><li>Jack Welch should have left the party while he was still having fun. </li></ul><ul><ul><li>The big boss of GE postponed his retirement to oversee a merger between GE and Honeywell International, which would later prove to be one of his greater disappointments. </li></ul></ul><ul><li>This is typical of captains who assume the ship should stay the course despite all the warning signals. </li></ul><ul><ul><li>GE ran into a “lighthouse” with the Honeywell deal, ending in a rejection of the merger, and Jack Welch ended his term with one of his last deals going sour. </li></ul></ul>
  17. 18. <ul><li>U- Understand the full challenge, because every organization’s reality is unique and multi-faceted. </li></ul><ul><li>N- Negotiate the buy-in of Key stakeholders, because organizations accomplish only that which is valued by those who hold power. </li></ul><ul><li>L- Locate cultural advancers and blockers, because characteristics of an organization’s culture that advance one strategy or initiative can block another. </li></ul><ul><li>O- Organize relevant priorities, goals, and action plans, because organizations respond as much to their reality as they do to their vision. </li></ul><ul><li>C – Communicate credibly, because an organization determines for itself if communication is credible, and acts accordingly </li></ul><ul><li>K – Keep adjusting, because an organization’s reality changes continuously </li></ul>PART TWO Chapter 9: UNLOCKing and Preventing the Strategic Gridlock Cycle
  18. 19. <ul><li>These are the three times when Preventing Strategic Gridlock becomes appropriate: </li></ul><ul><ul><li>When doing strategic thinking and planning on an annual to quarterly basis </li></ul></ul><ul><ul><li>When starting in a new position </li></ul></ul><ul><ul><li>When selecting and designing strategies and initiatives to break out of a competitive rut or a market downturn </li></ul></ul><ul><ul><li>While in the midst of a frustrating cycle of persistent organizational problems </li></ul></ul>CHAPTER 9: UNLOCKing and Preventing the Strategic Gridlock Cycle
  19. 20. CHAPTER 10: Understand the Full Challenge <ul><li>Common facets of the full challenge: </li></ul><ul><ul><li>Market position </li></ul></ul><ul><ul><li>Technology </li></ul></ul><ul><ul><li>Competitive and industry issues </li></ul></ul><ul><ul><li>Political and economic issues </li></ul></ul><ul><ul><li>The web of suppliers, alliance, and outsourcing partners </li></ul></ul><ul><ul><li>External stakeholders </li></ul></ul><ul><ul><li>Internal structures </li></ul></ul><ul><ul><li>Capital </li></ul></ul><ul><ul><li>Competencies </li></ul></ul><ul><ul><li>Internal stakeholder buy-in </li></ul></ul><ul><ul><li>Culture </li></ul></ul><ul><li>Understanding the Full Challenge: </li></ul><ul><ul><li>Identify an apparent business challenge </li></ul></ul><ul><ul><li>Who do we involve? </li></ul></ul><ul><ul><li>What are our options? </li></ul></ul><ul><ul><li>What is the option of highest reward and most acceptable level of risk? </li></ul></ul>
  20. 21. CHAPTER 10: Understand the Full Challenge <ul><li>Checkpoints on the road: </li></ul><ul><ul><li>Uncertain times require you question organizational reality. Basing strategic thinking and planning on the common facets increases risk of gridlock during execution </li></ul></ul><ul><ul><li>Gridlock comes from overlooking and underestimating the organizational reality </li></ul></ul><ul><ul><li>Discover new sources of vital information in unexpected places in your organization </li></ul></ul><ul><ul><li>Test your options for hidden roadblocks to understand the uniqueness of the situation, and select initiatives and strategies that better suit your current reality </li></ul></ul>
  21. 22. CHAPTER 11: Negotiate Key Stakeholder Buy-In <ul><li>Negotiate buy-in from your organization’s key internal and external stakeholders before committing to detailed implementation plans. People need to “take ownership” of a plan. </li></ul><ul><li>Which among these stakeholders have the potential to block or advance your strategy? </li></ul><ul><ul><li>Directors, Senior Executives, Managers, Divisions, Departments, Commitments, Task Forces, Union Representatives, Employees </li></ul></ul><ul><ul><li>Shareholders, Investors, Customers, Analysts, Suppliers, Outsource providers, Partners, Freelancers, Competitors, Unions, Government agencies, citizen groups, the media, consultants, families </li></ul></ul><ul><li>What to do when they’re not buying: </li></ul><ul><ul><li>Go ahead with your strategy or initiative </li></ul></ul><ul><ul><li>Manage your own and other’s expectations </li></ul></ul><ul><ul><li>Generate new options </li></ul></ul>
  22. 23. CHAPTER 12: Locate Cultural “Advancers” and “Blockers” <ul><li>Organizational culture consists of all the values, beliefs, and practices that exist in an organization and is the primary force shaping key decisions and how things get done. </li></ul><ul><li>The eight critical areas of organizational culture that can affect the desired outcome are the ff: </li></ul><ul><ul><li>Business philosophy </li></ul></ul><ul><ul><li>The success factors of each department </li></ul></ul><ul><ul><li>Leadership and management styles </li></ul></ul><ul><ul><li>Organizational structure </li></ul></ul><ul><ul><li>Workflow practices </li></ul></ul><ul><ul><li>Perceptions and expectations of staff </li></ul></ul><ul><ul><li>Customs </li></ul></ul><ul><ul><li>Work environment </li></ul></ul>
  23. 24. CHAPTER 13: Organize Relevant Priorities, Goals, and Action Plans <ul><li>You can only get high performance results when your execution plan paves a clear path between vision and where your organization actually stands here and now. </li></ul><ul><ul><li>Finding an appropriate starting point to launch a strategic plan increases the likelihood your organization will be able to carry it out </li></ul></ul><ul><ul><li>Make sure various parts of the plan support each other </li></ul></ul><ul><ul><li>If a plan is likely to overwhelm your organization’s capacity to deliver, question your assumptions about whether there are alternate ways to accomplish your objectives </li></ul></ul>
  24. 25. CHAPTER 14: Communicate Credibly <ul><li>Whether you’re actively shaping your messages or not, you’re always communicating with others. </li></ul><ul><ul><li>Three of the factors to consider when communicating: </li></ul></ul><ul><ul><ul><li>Suitability to the Audience </li></ul></ul></ul><ul><ul><ul><li>Frequency </li></ul></ul></ul><ul><ul><ul><li>Consistency </li></ul></ul></ul><ul><li>When communicating urgent matters, formal channels are the intranet/internet, live company-wide meetings, and teleconferences or videoconferences. </li></ul><ul><li>When communicating/negotiating buy-in of individuals or groups, formal channels are teleconferencing, e-mailing, group meetings and retreats, and one-on-one interactions. </li></ul><ul><li>When the message is urgent and needs to spread consistently throughout an organization, focus groups fall under formal channels. </li></ul>
  25. 26. CHAPTER 14: Communicate Credibly <ul><li>The 3-part process for credible communication: </li></ul><ul><ul><li>Identify objectives, audience, information </li></ul></ul><ul><ul><li>Assess current communication strengths and credibility killers </li></ul></ul><ul><ul><li>Draft communication plan </li></ul></ul><ul><li>Common credibility killers are: </li></ul><ul><ul><li>No formal communication about the plan </li></ul></ul><ul><ul><li>No follow-up </li></ul></ul><ul><ul><li>Inconsistency between the message and the means </li></ul></ul><ul><ul><li>Saturation </li></ul></ul><ul><ul><li>Poor timing </li></ul></ul>
  26. 27. <ul><li>An organization’s reality keeps changing. </li></ul><ul><li>You need to identify the possible risks, whether foreseeable, gradual or cumulative, have your contingency plans and keep them current, and mark milestones to monitor your progress. </li></ul><ul><li>Just because a plan is on schedule doesn’t mean that all is well. </li></ul>CHAPTER 15: Keep Adjusting
  27. 28. BusinessSummaries.com is a business book Summaries service. Every week, it sends out to subscribers a 9- to 12-page summary of a best-selling business book chosen from among the hundreds of books printed out in the United States. For more information, please go to http://www.bizsum.com. ABOUT BUSINESSSUMMARIES

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