Professor George Yip, Associate Dean for Executive Programmes at Imperial College Business School, shares his tips on how to successfully execute business strategies at The Guardian's one-day MBA masterclass held on 22 May 2016.

1. The Guardian One-Day
MBA Masterclass
Strategic Transformation
Professor George Yip
Associate Dean, Executive
Programmes

2. Imperial means Intelligent BusinessImperial College Business School 2
Strategic Objective
Business Model
What is Strategy

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EXECUTIVE STRATEGIC
OBJECTIVE
(example of one)
STRATEGIC
MOVES
(example of one)
EXECUTION
(example of one)
Chief Executive Diversify Create new line of
business
Select and start up new
business, appoint
general manager
General Manager Make the new
business a success
Develop appealing
new products
Set up new product
development unit,
appoint unit manager
New Product
Development Unit
Manager
Run the unit well,
including delivering
successful new
products
Put in the right
processes, systems
and workers
Monitor processes,
systems and workers
Cascade of objectives, strategic moves and execution

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• All strategies need to be executed
• Not the same as operational execution
• Strategy execution  new, different situation (Lexus)
• Operational execution  same situation (perhaps better but not
different)
• Some strategies are more difficult to execute than others, depending
on
– Extent of stretch in strategic objectives
– Fit with current business model
– Change capabilities of organization
– Implementation capabilities of organization
Defining strategy execution

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Source: Laurent Mirabeau and Steve Maguire, “From Autonomous Strategic Behavior to Emergent Strategy,”
Strategic Management Journal 35 (2014), pp. 1202-1229.
Intended versus emergent strategy

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Product launch
Acquisitions
Market development
Related diversification
Strategic decisions
Strategies evolve and
inform strategic
decisions, which in turn
consolidate strategic
direction
Evolving
strategic
direction
Source: Johnson, Whittington and Scholes, Exploring Strategy.
Strategic direction from prior decisions

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Environmental
Change
PHASE 1
Incremental
Change
PHASE 2
Strategic
Drift
PHASE 3
Flux
PHASE 4
Transformational
Change or Demise
Amountofchange
Time
Source: Gerry Johnson and Kevan Scholes
The problem of strategic drift

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• Individual cognitive limits
• “Steady as you go”
• Core rigidities
• Organizational culture
• Lagged performance effects
• Past success: The Icarus Paradox
Source: Gerry Johnson
Why strategic drift?

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“When the rate of change
inside the company is
exceeded by the rate of
change outside the company,
the end is near.”

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When it goes bankrupt
When it loses money, consistently
When it loses market share
When sales go down
BUT BY NOW IT IS TOO LATE to avoid trauma for the company,
shareholders, employees, customers, partners and managers.
11
How to tell when your business needs strategic transformation

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Look for the following indicators:
• A new technology or product form introduced into your industry
• By someone else
• Which your top managers refuse to regard as significant (e.g.,
motorcycles, personal computers, coffee, music downloads, Apple
iPhone, etc.)
How to anticipate the need for strategic transformation

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Sales and profits good.
BUT the most innovative/fashionable/desirable
customers desert you.
e.g. Cadillac, Nissan in U.S. in 1990s
• Customer loyalty and retention declines
• The smartest employees do not join you
• Your company is worth more broken up
How to anticipate the need for strategic transformation (cont.)

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• State owned until 1982
• BA =“ Bloody Awful”
• Rules for flight attendants
• New advertising campaign
• Product innovations
No. 1 among world business travellers
14
Transformation of British Airways

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Develop the
Organization
Achieve
Mobilization
Create the
Vision
Build the
Measures
Construct an
Economic
Model
Align Physical
Infrastructure
Achieve
Market
Focus
Invent New
Businesses
Change Rules
Through Information
Technology
Create Reward
Structure
Build Individual
Learning
Redesign
Work
Architecture
Transforming the organisation

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Conclusion
A strategy is a journey not a destination.
The best strategy ideas are the outcome of a creative process
strongly grounded in deep knowledge and understanding of
both the external and the internal environment.
The best strategies are successfully executed.

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Manuel Hensmans, Gerry Johnson and George Yip, Strategic
Transformation: Changing While Winning, Basingstoke, England:
Palgrave Macmillan, 2013.
Gerry Johnson, George Yip and Manuel Hensmans, “Achieving
Successful Strategic Transformation,” MIT Sloan Management
Review, Spring 2012, pp. 25-32.
Gerry Johnson and George S. Yip, “Transforming Strategy,”
Business Strategy Review, 18/1 Spring 2007, pp. 11-15.
(g.yip@imperial.ac.uk)
References