Transcript CHAPTER 5 EXECUTION OF STRATEGIES

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STRATEGY TO EXECUTION
EXECUTION TO STRATEGY
What is the mantra
By Reetu Raina
Head OD-India at Amdocs
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What is a Strategy
HEART
HEAD
INTELLECTUAL
UNDERSTANDING
Willingness
Energy
Enthusiasm
Passion
Frameworks
Models
Tools
Examples
PERSONAL
ENGAGEMENT
Demonstration
Behaviours
HAND
WALKING THE TALK
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What makes Strategy to succeed
Good Execution Strategy
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Strategic Planning
• Strategic planning is an organization's process of
defining its strategy, or direction, and making decisions
on allocating its resources to pursue this strategy,
including its capital and people. Various business
analysis techniques can be used in strategic planning,
including SWOT analysis (Strengths, Weaknesses,
Opportunities, and Threats ) and PEST analysis (Political,
Economic, Social, and Technological analysis) or STEER
analysis (Socio-cultural, Technological, Economic,
Ecological, and Regulatory factors) and EPISTEL
(Environment, Political, Informatic, Social, Technological,
Economic and Legal).
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What does it mean
● Strategic planning is the formal consideration of an
organization's future course. All strategic planning deals
with at least one of three key questions:
● "What do we do?"
● "For whom do we do it?"
● "How do we excel?"
But often What eats whom and especially how
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Execution of strategies
● But good strategies fail too, and when that happens, it's
often harder to pinpoint the reasons. Yet despite the
obvious importance of good planning and execution,
relatively few management thinkers have focused on
what kinds of processes and leadership are best for
turning a strategy into results.
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Cont’d
● But can better execution be taught?
● You can develop a model.... If people know what the key
variables are, they know what to look for and what
questions to ask."
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Basic Reason
● While execution can go wrong for a variety of reasons,
one of the most basic may be allowing the focus of the
strategy to shift over time.
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Goal- shifting
● The attempt by Hewlett-Packard, after it acquired
Compaq, to compete with Dell in PCs through scale is a
classic example of goal-shifting -- competing on price one
week, service the next, while trying to sell through often
conflicting, high-cost channels. The result: CEO Carly
Fiorina lost her job and HP still must resolve some key
strategic issues.
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Mantra #1
Keep the Focus Steady
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Goal and Means
● Another classic example of mis-synchronization: United
Air Lines' TED, which attempted to set up a competitive
subsidiary to compete against upstarts such as
Southwest. This was a good idea as far as it went, but
United tried to compete using its same old cost structure - the main reason it was losing markets to the low-cost
airlines in the first place.
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Mantra #2
Synchronization of Goals and Means
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Communication & Acceptance
• At other times, plans fail simply because they don't get
communicated to all the people involved.
• Strategies also flop because individuals resist the
change. For example, headquarters might want more
standardization in a product, but a local marketing
executive disagrees with the idea. "He might say, 'I need
more nuts in my chocolate bar' or 'I need a different pack
size,'"
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Mantra #3
Focus on Key levers which can make or mar
strategy execution typically it is Communication
and Acceptance
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Why resistance
• Many times, there can be sound reasons for resistance.
Sometimes a strategy might make sense at the highest
level, but its full impact on the whole organization has not
been fully considered,
• For example, imagine that the general strategy calls for
promoting one brand throughout the company while
taking resources away from another brand. That might
make sense in one market, yet be completely
counterproductive elsewhere
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Cultural Factors
• Cultural factors can also hinder execution. Companies
sometimes try to apply a tried-and-true strategy without
realizing that they are operating in markets that require a
different approach. Even such a world-beater at
execution as Wal-Mart, for instance, has sometimes
made some missteps because of culture. One example:
When Wal-Mart first moved in to Brazil, it tried to lay
down terms with suppliers in the same way it does in the
U.S., where it carries huge weight in the market.
Suppliers simply refused to play, and the company was
forced to reevaluate its strategy.
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Mantra#4
Strategy can be as strong as its weakest link
Don’t forget even the factors we consider least
at times e.g. Culture or demographics
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Execute Inattention
● Yet the biggest factor of all may be executive inattention.
Once a plan is decided upon, there is often surprisingly
little follow-through to ensure that it is executed,
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Mantra # 4
Consistent Attention
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Consistent Monitor and Tracking
● "Less than 15% of companies routinely track how they
perform over how they thought they were going to
perform,“
● Instead, only the first year's goals are measured -- and
executives often set first-year goals deliberately low in
order to meet a threshold for a bonus.
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Culture of Accountability
• One school emphasizes people: Just put the right people
in place and the right things will get done. However,
within the people school, there are also divisions. Some
experts insist that the right people are hired, not made.
• the key is to improve executive performance through
training, and improve the average employee's
performance through the creation of a culture of
accountability.
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Cont.….
● For example, W. James McNerney, Jr., the chairman and
CEO of 3M, argues that by improving the average
performance of every individual by 15%, irrespective of
what his or her role is, a company can achieve and
sustain consistently superior performance.
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Mantra # 5
Culture of Accountability
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Five Keys to Getting the Job Done
● Develop a model for execution.
● Choose the right metrics.
● - sales and market share are always going to be the
dominant metrics of business
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Cont.
• Don't forget the plan.
• - plans are often simply agreed to and then forgotten !
• Assess performance frequently.
• - Performance monitoring is still an annual affair at most
companies. The reason why Wal-Mart is so good at
execution is it knows daily if what it is doing in each of its
stores gets results or not
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Cont
• By shortening the performance monitoring cycle -- from
quarter-by-quarter to month-by-month or week-by-week -top management can get more "real-time" feedback on
the quality of execution down the line.
• Communicate.
• - companies often go wrong by creating a cultural
distinction between the executives who design a strategy
and people lower down in the corporate hierarchy who
carry it out.
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WYDIWYG
● Strategy is Execution. Another way of saying this is
WYDIWG – What You DO Is What You Get.
● Strategy Is . . .
● Strategy is many things: plan, pattern, position, ploy
and perspective. As plan, strategy relates how we
intend realizing our goals.
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Strategy is Execution
Strategy is getting it right and doing it right. On the one
hand, we have to envision the right course of action. On the
other hand, once chosen, we have to carry it out properly
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Do we want to be guilty
● If our strategy and its execution are both flawed, the effort
is "doomed from the beginning." Our chances of success
are zero, nil
● If our strategy is sound but its execution is flawed, we are
guilty of muffing it
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Execution is Strategy
• In the early 1980s, Tom Peters made a presentation to a
group of senior managers at AT&T in which he used a
slide that read, "Execution is strategy." We can turn that
around and also say that strategy is execution. In simpler
terms, we adapt to changing circumstances and so does
our strategy. Thus it is that strategy as envisioned or
contemplated becomes strategy as executed or realized
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What does Execution Strategy mean at
Amdocs
● Focused Approach
● Play Specialists
● Culture of accountability
● Continuous Monitoring
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Focused Approach
● Organizations that successfully execute even mediocre
strategies far outperform those that fail to execute the
most brilliant of plans! According to Fortune Magazine,
"less than 10% of strategies effectively formulated are
effectively executed."
● Identifying focus and time frame for the focus should be
part of execution strategy
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Play Specialists
● How to Get There From Where You Are Today?
● When an organization commits to execution strategy it
must do so in steps or stages. Tackling all of the various
components at once -- no matter how focused and
motivated an organization is -- is simply not feasible.
● Executors have to be separated from thinkers.
● Create a model of execution
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● Developing organizational structures that foster
information sharing, coordination, and clear accountability
● Developing effective controls and feedback mechanisms
● Knowing how to create an execution-supportive culture
● Exercising execution-biased leadership
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● Without guidance, individuals do the things they think are
important, often resulting in uncoordinated, divergent,
even conflicting decisions and actions.
● Having a model or roadmap positively affects execution
success.
● It all begins with strategy. Execution cannot occur until
one has something to execute. Bad strategy begets poor
execution and poor outcomes, so it's important to focus
first on a sound strategy.
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Culture of Accountability
● Clear Responsibility and Accountability
● This is one of the most important prerequisites for
successful execution, as basic as it sounds.
● Managers must know who's doing what, when, and why,
as well as who's accountable for key steps in the
execution process. Without clear responsibility and
accountability, execution programs will go nowhere.
Knowing how to achieve this clarity is central to execution
success.
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● While competitors are the ones who set the agenda and
rule of the game in red oceans, competition becomes
insignificant in blue oceans.
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Twelve strategies for instilling a culture of execution in your
organization:
● Build accountability into meetings
● Be realistic. Many strategies fail because leaders don't
make a realistic assessment of whether the organization
can execute the plan.
● Focus on a few priorities. I've seen organizations with
strategic plans that detail twenty large strategies for one
year.
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Cont.
• Ensure employees understand priorities. This may
sound simple, but my experience is that most employees
are not brought into the loop about what is important to
the organization.
• Set milestones. Break down every organizational project
into specific milestones with action items and dates.
Communicate these milestones to employees and review
the status at each project meeting.
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Cont.
● Use your business plan. Is your business plan collecting
dust? Many organizations go through the motions of
spending two days every year developing strategic and
business plans, only to stick them in the bottom of the
drawer untouched
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Cont.
● Hold people at the top accountable. If line managers
are not executing, it's usually because their leader does
not have an accountability structure in place. Leaders
need to take ownership of their initiatives and follow-up
with managers to ensure completion
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Cont.
● Promote candid dialog. This is one of the biggest
reasons why things don't get done in organizations. Many
managers don't want to rock the boat, so they are very
polite and don't challenge each other or their leaders.
This often leads to failed projects and initiatives because
managers weren't honest with each other.
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Cont.
● What processes could have been better? Did we meet
our time commitments? If not, why? Use this information
to improve processes and hold people accountable.
● Confront performance issues. Some managers put off
confronting performance issues because it's unpleasant
and takes time.
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