strategy execution
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© 2014 Berlin Asong. All rights reserved. 2
Learning Objectives
I. What is strategy-execution?
i. Understanding the distinction between strategy-execution and strategy.
ii. Understanding the distinction between strategy-execution failure and strategy failure.
II. Why strategy execution is a critical activity of organisational success?
III. What are the causes of strategy-execution failures?
IV. How can the quality of strategy-executions be improved?
© 2014 Berlin Asong. All rights reserved. 3
Learning Objectives
I. What is strategy-execution?
i. Understanding the distinction between strategy-execution and strategy.
ii. Understanding the distinction between strategy-execution failure and strategy failure.
II. Why strategy execution is a critical activity of organisational success?
III. What are the causes of strategy-execution failures?
IV. How can the quality of strategy-executions be improved?
© 2014 Berlin Asong. All rights reserved. 4
Mission
Vision
Goals | Objectives
Strategic Analysis
Strategic Choices
Strategy Implementation
Strategy Evaluation
Implementation is concerned with the efforts of…
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…translating strategies into actions on adaily basis.
© 2014 Berlin Asong. All rights reserved. 6
"Walking" those plans—missions, goals, and operational programmes—is challenging.
© 2014 Berlin Asong. All rights reserved. 7
Walking those planshas been 'unexpectedly'difficult for some firms.
© 2014 Berlin Asong. All rights reserved. 9
GM woes in theyears leading up to its
2009 bankruptcy.
GM’s Former CEO Rick Wagoner
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After failing to make a profit since it entered the
US grocery market in 2007, Tesco is exiting.
Picture source: gourmetretailer.com
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It remains to be seen if Merissa Mayer, former Google
exec, now Yahoo CEO can turnaround the company.
Picture: fastcompany.com
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…the digital camera inventor filedfor bankruptcy in January 2012, after losing
its competitiveness to rivals.
© 2014 Berlin Asong. All rights reserved. 14
Learning Objectives
I. What is strategy-execution?
i. Understanding the distinction between strategy-execution and strategy.
ii. Understanding the distinction between strategy-execution failure and strategy failure.
II. Why strategy execution is a critical activity of organisational success?
III. What are the causes of strategy-execution failures?
IV. How can the quality of strategy-executions be improved?
© 2014 Berlin Asong. All rights reserved. 15
What’s the distinction between strategy failure & strategy-execution failure?
© 2014 Berlin Asong. All rights reserved. 18
Strategy Strategy-Execution
Mission
Vision
Goals | Objectives
Strategic Analysis
Strategic Choices
Strategy Implementation
Strategy Evaluation
CO
NT
EN
T
Strategy Implementation
PR
OC
ES
S
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…there’s a strong linkbetween strategy and
strategy-execution.
However…
© 2014 Berlin Asong. All rights reserved. 20
Strategy Strategy-Execution (SE)
Strategy influences SE.
Mission
Vision
Goals | Objectives
Strategic Analysis
Strategic Choices
Strategy Implementation
Strategy Evaluation
CO
NT
EN
T
© 2014 Berlin Asong. All rights reserved. 21
Strategy Strategy-Execution (SE)
A poorly thought-out strategy affects the performance of
SE.
A poorly executed strategy affects the performance of strategy.
© 2014 Berlin Asong. All rights reserved. 22
Learning Objectives
I. What is strategy-execution?
i. Understanding the distinction between strategy-execution and strategy.
ii. Understanding the distinction between strategy-execution failure and strategy failure.
II. Why strategy execution is a critical activity of organisational success?
III. What are the causes of strategy-execution failures?
IV. How can the quality of strategy-executions be improved?
© 2014 Berlin Asong. All rights reserved. 23
Strategy Failure Strategy-Execution Failure
…is a poorly executed strategy.…is a failed strategy.
© 2014 Berlin Asong. All rights reserved. 24
The failure of astrategy could be traced
to its execution.
© 2014 Berlin Asong. All rights reserved. 25
Did you notice “failedstrategy” & “poorly executed strategy” share a common feature?
© 2014 Berlin Asong. All rights reserved. 27
Learning Objectives
I. What is strategy-execution?
i. Understanding the distinction between strategy-execution and strategy.
ii. Understanding the distinction between strategy-execution failure and strategy failure.
II. Why strategy execution is a critical activity of organisational success?
III. What are the causes of strategy-execution failures?
IV. How can the quality of strategy-executions be improved?
© 2014 Berlin Asong. All rights reserved. 28
Why strategy execution is a critical activity of successful
organisations?
© 2014 Berlin Asong. All rights reserved. 29
To be successful,you must execute.
1
Source: iredellrunners.com
No matter how great your idea is, if you can’t execute it,
you’re not different from someone without an idea.
30© 2014 Berlin Asong. All rights reserved.
© 2014 Berlin Asong. All rights reserved. 31
…is a measureof firm’s future performance.
2
Strategy execution…
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…has seen blackberry maker RIM lost 87%
market value.
Failure to execute…
26. 06. 2012NASDAQ
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…has seen Nokia lost 85% market value.
Failure to execute…
26. 06. 2012NYSE
© 2014 Berlin Asong. All rights reserved. 34
Mission
Vision
Goals | Objectives
Strategic Analysis
Strategic Choices
Strategy Implementation
Strategy Evaluation
3
Resources are wasted when firms fail to execute or execute poorly.
© 2014 Berlin Asong. All rights reserved. 35
Leadership performanceis increasingly measuredby ability to execute.
4
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Take a look at all theCEOs (FTSE 100 & S&P 500) who’ve lost the top
job, from 2008–2012. Reason:strategy execution failure.
© 2014 Berlin Asong. All rights reserved. 37
Nam Yong (LG)
Chris DeWolfe (MySpace)
Rick Wagoner (GM)
Jerry Yang (Yahoo!)
Carol Bartz (Yahoo!)
Olli-Pekka Kallasvuo (Nokia)
Leo Apotheker (HP)
Jim Balsillie and Mike Lazardis (RIM)
Fred Hassan (Schering Plough)
Etc.
© 2014 Berlin Asong. All rights reserved. 38
People come to workto get the job done.
5
That is, to execute on the firm’s strategy.
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…is the sum of allthe jobs done inside thefirm, and by its partners.
Therefore, strategy execution…
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60%of strategy-executions fail annually.
Kaplan, R. S. and Norton, D. P. (2006), "Creating the Office of Strategy Management”. [Online] Available from http://hbswk.hbs.edu/item/5420.html [accessed 22 February 2009]
In fact, it’s reported that…
© 2014 Berlin Asong. All rights reserved. 41
Learning Objectives
I. What is strategy-execution?
i. Understanding the distinction between strategy-execution and strategy.
ii. Understanding the distinction between strategy-execution failure and strategy failure.
II. Why strategy execution is a critical activity of organisational success?
III. What are the causes of strategy-execution failures?
IV. How can the quality of strategy-executions be improved?
© 2014 Berlin Asong. All rights reserved. 42
Why?30 minutes
60% of strategy-executions fail annually.
© 2014 Berlin Asong. All rights reserved. 43HBR (2010), "How Hierarchy Can Hurt Strategy Execution." Harvard Business Review 88, no. 7/8: 74-75.Business Source Corporate, EBSCOhost
© 2014 Berlin Asong. All rights reserved. 45
Strategy is out of syncwith changing market’s needs
and expectations.
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…by the time Kodak realised digital camera,
especially in the consumer electronics space,
was the future of digital photography, it was too late.
© 2014 Berlin Asong. All rights reserved. 47
Tata Nano launched in 2009 has been dubbed a flop.
© 2014 Berlin Asong. All rights reserved. 48
India car boss Ratan Tataadmits Tata Nano “mistakes”.
Source: BBC (January 2012)
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…a bid to challengeApple’s iPad, and fend-off
threat to HP’s PC sales.
© 2014 Berlin Asong. All rights reserved. 52Former HP CEO Leo Apotheker
HP’s Apotheker discontinuedTouchPad after 2 months in market.
18 August 2011—
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Strategy-makers spend moretime in designing the content ofstrategies than thinking how to implement them, successfully.
© 2014 Berlin Asong. All rights reserved. 54
Why managers are good at formulatingstrategies but poor at
executing them?
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Top executives mistakenlythink strategy execution is meant for those at the lower end of the
organisational chart.
1
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Executives are less skilledand lessknowledgeablein the
art& scienceof strategy execution.
2
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Countless strategiesare designed without taking
into account the organisation’s ability to execute them.
David Hilliard, “Strategy Execution – Acting on what really matters”.
© 2014 Berlin Asong. All rights reserved. 59
Managers are trained to plan,
not execute.
Hrebiniak, (2004) “Strategy Execution is the Key”
© 2014 Berlin Asong. All rights reserved. 61
Purpose & benefits of strategicplans are not (or poorly) conveyed to employees, teams and frontline staff.
3
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The chances are, 40% of your workforce can’t articulate the details of the firm’s strategy.
© 2014 Berlin Asong. All rights reserved. 63
Employee resistance may stemfrom lack of understanding caused by
failure of top management to articulate the merits of strategic plans.
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Content of marketing plan,not simplified for
easy understanding.
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Consumers
Employees Investors
Suppliers/distributors
CommunitiesGovernment/Regulators
Organisation
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Not assigning clear responsibilities and
accountabilities.Who is responsible for What? Are they equipped enough to carry out the what?
© 2014 Berlin Asong. All rights reserved. 69
Who is responsible for What? Are they equipped enough to carry out the what?
Individuals | Teams | Departments | Suppliers
Tasks | Goals
Skills | Knowledge | Information |authority | equipment | support |
motivation
© 2014 Berlin Asong. All rights reserved. 70
Inter & intra-divisional tensionsa major contributor to its crippling
performance in the 70s & 80s.
© 2014 Berlin Asong. All rights reserved. 76
HBR (2010), "How Hierarchy Can Hurt Strategy Execution." Harvard BusinessReview 88, no. 7/8: 74-75. Business Source Corporate, EBSCOhost
© 2014 Berlin Asong. All rights reserved. 77
The chances are, 40% of your workforce can’t articulate the details of the firm’s strategy.
© 2014 Berlin Asong. All rights reserved. 78
People feel more comfortable with their existing environment.
2
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CHANGE,
Implementation of a strategic plans introduces…
…which sometimes exposes the psychologicalinsecurity of employees. For example,…
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Would resources be diverted away from my
unit to other units?
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5
Internal and external stakeholders challenge or are bent on thwarting the execution of marketing plans.
© 2014 Berlin Asong. All rights reserved. 89
Phase One Phase Two Phase Three
Strategy-execution’s phasesare poorly designed, disjointed
or not clearly thought-out.
2
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Bold but unrealistic plans in terms of goals, resources needed, timescale of achievement, and responsibilities
assigned to individuals, teams and managers.
Source: http://jagoadvisor.com
3
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Lack of/invalid systemsto track & measure theperformance of strategic plans.
5
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"People do not do what you expect but what you inspect".
© 2014 Berlin Asong. All rights reserved. 94
Excellent delivery of customer services is acornerstone of BT’s current marketing strategy.
What mechanism or measureswould you put in place to ensure and
monitor excellent service delivery?
20 minutes
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Implementation phaseis delayed, rushedor killed too early.
6
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Lack of sufficient funding
Source: www.romania-insider.com
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Relationship breakdown with business partners (manufacturer, resource/service provider, distributor,
advertising agency, regulator, community, etc.).
© 2014 Berlin Asong. All rights reserved. 101
External FactorsBeyond the Control of Strategy-Makers.
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PESTEL forces.
External factors beyond the control ofmarketing planners and implementers.
1
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Lack of contingencyplanningagainst foreseen & unforeseen market shifts & shocks.
2
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Failure to learn frompast execution mistakes
and challenges.
© 2014 Berlin Asong. All rights reserved. 107
Learning Objectives
I. What is strategy-execution?
i. Understanding the distinction between strategy-execution and strategy.
ii. Understanding the distinction between strategy-execution failure and strategy failure.
II. Why strategy execution is a critical activity of organisational success?
III. What are the causes of strategy-execution failures?
IV. How can the quality of strategy-executions be improved?
© 2014 Berlin Asong. All rights reserved. 110
There are many tools for improving the quality of strategy execution, but the McKinsey 7s trumps other models.
…diagnostic value; wholly integrative parts; mirrors the causes of strategy-execution failures.
© 2014 Berlin Asong. All rights reserved. 113
Shared values
Organisation’smission & guiding
beliefs.
© 2014 Berlin Asong. All rights reserved. 114
What’s the mission of the organisation?
What are the values of the organisation?
What values does the organisation uphold?
Is the organisation living up to its values?
Are those values constraining or enabling the effectiveness of the 6S?
What are the medium & long-term goals of the organisation?
What are the effects of its goals on staff morale & well-being?
Are the organisation’s values in sync with customers & the larger society?
Are employees, shareholders, divisional units, etc. aligned with its goals?
What do people (customers, shareholders, employees, management, suppliers, etc.) say about the
organisation?
Is the organisation meeting its goals?
Etc.
Diagnostic Questions
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Strategy
The means bywhich the firm achieves
its strategic goals.
© 2014 Berlin Asong. All rights reserved. 116
How does the organisation compete?
What’s the organisation’s competitive priorities?
What is the rational behind the strategy?
Does the strategy fit the organisation’s operating environment?
How does the strategy fare with current and future competitive forces?
Are crucial processes and resources aligned with the strategy?
What are its medium-term & long-term goals?
What strategic trade-offs has the firm made?
What position does the organisation occupy in its industry?
Is the strategy working?
Etc.
Diagnostic Questions
© 2014 Berlin Asong. All rights reserved. 117
Structure
The way work isdivided; authority and
responsibility are defined.
© 2014 Berlin Asong. All rights reserved. 118
Overall Strategy
Breakdown strategy-execution into specific tasks or jobs attached with SMART goals.
Chunks of goals
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How does the organisation organise itself (functional, geographic, divisional, product, hybrid)?
What’s the rational for such structures?
How’s the organisation structure evolved over the years? And why?
How is power distributed in the organisation?
Which person or group wields the stronger influence? And why?
Is power centralised or decentralised?
Is the management flexible or rigid?
Does the structure enable or hinder the performance of employees?
How quick or slow does the organisation respond to outside changes?
Are roles and responsibilities clearly defined?
Etc.
Diagnostic Questions
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Eliminate barriers to knowledge
sharing among employees,
managers and departments.
© 2014 Berlin Asong. All rights reserved. 121
Systems
The processes (decision-making, HRM,
marketing, customer service, manufacturing, distribution, IT, security, risk management, etc.)
that define how the strategy would
be achieved.
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Which processes are crucial to the organisation’s ability to compete?
Which processes are crucial to the organisation’s ability to deliver value for customers?
Does the organisation possess the processes vital for its survival?
How does the organisation track the performance of these processes?
How effective are these processes?
Etc.
Diagnostic Questions
© 2014 Berlin Asong. All rights reserved. 123
Staff
Quality, quantity &morale of employees; role of
external stakeholders.
© 2014 Berlin Asong. All rights reserved. 124
Has the organisation got the right quality & quantity of talents?
Has it got the right leadership?
Has it got the right quality and quantity of leaders?
Are staff well trained & motivated?
Is the organisation losing talents to rival firms?
Is the organisation extracting the right level of productivity from staff?
Is the HRM aligned with goals & strategy of the organisation?
Etc.
Diagnostic Questions
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Definitive Stakeholder
Demanding Stakeholder
Dominant Stakeholder
Discretionary Stakeholder
Power
Interest
High Low
High
Low
Stakeholder Mapping
Adapted from Mitchell, R. K., Agle, B. R. & Wood, D. J. (1997), “Toward A Theory Of Stakeholder Identification And Salience”. Journal of Academy of Management, vol. 22, no. 4, pp. 853-886
© 2014 Berlin Asong. All rights reserved. 126
Primary Stakeholder
Primary Stakeholder
Secondary Stakeholder
Secondary Stakeholder
Power
Interest
High Low
High
Low
Stakeholder Mapping
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Keep themhighly satisfied. Keep them satisfied.
Keep them informed. Monitor them.
Power
Interest
High Low
High
Low
Stakeholder Mapping
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Planners must articulatepurpose of strategic plans; listen
to divergent views; listento employees’ concerns.
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Top managers mustset an enabling culture that encourages, reinforces and
rewards collaboration.
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Leverage the benefits of information communication
technologies to speedKnowledge sharing.
© 2014 Berlin Asong. All rights reserved. 132
Planners must equip, support and motivateemployees to produce desirable behaviours
necessary for successful implementation.
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Who is responsible for What? Are they equipped enough to carry out the what?
Individuals | Teams | Departments | Suppliers
Tasks | Goals
Skills | Knowledge | Information |authority | equipment | support |
motivation
© 2014 Berlin Asong. All rights reserved. 135
Style
Organisational culture, behaviour, image; leadership
or management style.
© 2014 Berlin Asong. All rights reserved. 136
What’s the dominant culture inside?
What values does the organisation uphold?
How has the organisation inherited its current values?
What do people like and dislike about the organisation? And why?
Are the organisation’s values in sync with customers & the larger society?
What’s the prevailing management/leadership style in the organisation?
Is the management/leadership style enabling or constraining employee performance?
Do employees trust the integrity of the board & top management?
What do people inside & outside say about the management/leadership?
What do people inside & outside say about the organisation?
Etc.
Diagnostic Questions
© 2014 Berlin Asong. All rights reserved. 141
Skills
The capabilities & competencies vital for
successful strategy execution.
© 2014 Berlin Asong. All rights reserved. 142
The 7 elements combined to create
a network of capabilities vital for successful strategy execution.
© 2014 Berlin Asong. All rights reserved. 143
What’s the organisation good at?
What are the relative strengths of the organisation?
What are the relative weaknesses of the organisation?
What resources/competences are responsible to the organisation’s current performance?
What assets have been (& will be) crucial to the organisation’s survival?
Has the organisation got the capabilities to survive today & tomorrow?
What do stakeholders like about the organisation?
Etc.
Diagnostic Questions
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