strategy execution – why companies fail and how hr can help
DESCRIPTION
A well-formulated business strategy, powerful product or breakthrough innovation can put an organisation on the competitive map, but only strong strategy supported by sustained execution can assure long-term success. Regularly cited as a top CEO priority, execution is considered the key to achieving superior business results. Yet, the majority of organisations fail to effectively implement strategic initiatives. Research reveals that companies achieve a fraction of the financial results envisioned during the strategy’s development. How much of this can be attributed to an organisation’s lack of business acumen or business skills? How can you develop right capabilities to drive superior execution? Taimur Kiddie, Director - Middle East & Africa, BTSTRANSCRIPT
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HR Summit – 2014
Strategy Execution – Why Companies Fail and How HR Can Help
Taimur Kiddie
Who is BTS?
Melbourne Sydney
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The World Leader in Strategic Execution
through Discovery-based Learning
400+ Clients in 53 different countries
Founded 1986 in Stockholm, Sweden
29 offices across
5 continents
380+ Professionals
Listed on the NASDAQ-OMX Stockholm
Our Mission:
We work with our clients to build commitment and capability to accelerate strategy execution and
improve business results
Delivery in 25+ languages
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Today’s Agenda
• What is strategy?
• Strategy Execution
• Talent
• Framework
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Business Idea !
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Porter
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Industry Analysis: Five Forces
Potential
Entrants
Suppliers
Substitutes
Buyers
Industry
Competitors
Rivalry among
existing Firms
Bargaining Power
of Suppliers
Bargaining Power
of Buyers
Threat of New Entry
Threat of Substitute Product or Service
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Key Schools in Strategy
• Design School
• Planning School
• Positioning School
• Entrepreneurial School • Cognitive School • Learning School • Power School • Cultural School • Environmental School • Configuration School
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Strategy is…….
A strategy is the broad plan of action set
by the general management of a firm
that involves building an organization
that creates value (i.e., meets and
extends demand) and captures value
over an extended period of time and in
the face of competitive pressure
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What Strategy Should Do For Us
• Guide our resource allocation
decisions
• Guide organization design
• Provide a catalyzing “shorthand”
to facilitate coordination within
the firm
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Strategy is cool
But
Execution is becoming harder
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70% of change efforts fail to deliver
their intended results John Kotter, 2013
Businesses continue to struggle in execution.
60% of strategy-executions fail
Robert S. Kaplin, Creating the Office of Strategy Management, 2006
35% of today’s employees are
engaged in their company Towers Watson, Global Workforce Study, 2012
56% of strategic initiatives were
successful over the last 3 years Economic Intelligence Unit, Why Good Strategies Fail, 2013
Market Leadership Volatility
What’s More Important: Strategy Development or Execution?
26% prioritize strategy formulation
over execution 46%
invest more heavily in implementing strategy
26%
adopt a balanced approach, focusing equally on both
Revenue Leading Organizations are 52%
more likely to strike a balance of strategy formulation and execution.
Strategy Execution Is Not Easy: Focus on 3 Key Drivers to Enable Success
High vs. Low-Performing Organizations
42%
56%
52%
12%
28%
32%
Capability
Mindset
Alignment
Market Laggard Market Leader
The Strategy Execution Levers: All Important, but Not Equal
When managers are “confident in their superiors ability to lead the strategy” their company has a 71% chance of success.
52%
57%
71%
Alignment
Mindset
Capability
Which Lever is the Strongest Predictor of Success?
To enable effective strategy execution, companies are best advised to:
– Define: execution plans early in the strategy formulation process
– Target: the strategy execution levers to achieve the full potential of strategic plans
– Develop: initiatives that move beyond traditional strategy communication methods
– Recognize: the importance of role of senior leadership
A long-term perspective and direct approach will prove critical to success.
Accelerating Strategy Execution: The Way Forward
What is Strategy Execution?
Strategy execution is a series of
coordinated, enterprise-wide
decisions and actions occurring over
time.
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But who will execute
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The Workforce
Continues to
Change
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Baby Boomers – Today’s Leaders Begin to Retire
Generation Major Influences Broad Traits Invention
Baby Boomers
1946-1964
Watergate
JFK Assassination
Women’s Rights
Woodstock
Motivation: Achievement
Major Trait: Competitive
Motto: “Nose to the grindstone” long hours and hard working
Value: Status & Rewards
Personal Computer
Source: Adapted from The 2020 Workplace, Willyerd and Meister, 2010
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Generation X – The Forgotten Middle Forge Their Way
Generation Major Influences Broad Traits Invention
Gen X
1965-1976
MTV
Aids
Gulf War
1987 Stock Market Crash
Fall of the Berlin Wall
• Motivation: Independent free agents
• Major Trait: Self-reliance; low company loyalty
• Motto: “Live free or die”
• Value: Work-life balance
• Attributes: Eclectic, Exploring
Mobile Phone
Source: Adapted from The 2020 Workplace, Willyerd and Meister, 2010
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As Millenials Dominate the Workforce, They Change the Game
Generation Major Influences Broad Traits Invention
Millennial
1977-1997
9/11 terrorist attacks
Barak Obama’s election
• Motivation: Meaning & Recognition
• Major trait: Immediacy
• Motto: “Follow your passion” Confident
• Value: Community Service, Cyber Literacy, Tolerance, Diversity
Google Facebook
Source: Adapted from The 2020 Workplace, Willyerd and Meister, 2010
Screen shot of Twitter.com home page as it was defaced by ‘Iranian Cyber Army’
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The Next Generation Will Change the Workplace for Good
Generation Major Influences Broad Traits Invention
Gen 2020
Born after 1997
Life online & mobile starting in pre-school
Reading on e-readers
Playing Social Games
Iraq War
Great Recession
Motivation: Being connected to people, places , news and things that matter most
Major Trait: Hyper-Connectedness
Motto: “How many likes?”
Value: Real-Time Trusted Opinions
Attributes: Media Savvy-All Mobile
iPhone apps
Source: Adapted from The 2020 Workplace, Willyerd and Meister, 2010
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Purpose Mastery Autonomy
What do millennials and gen 2020 want…
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The HR Model
Must Change
to Be Relevant
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Strategic Role
Framework to drive execution?
Alignment All individual goals, projects, and work to be done
contributes to achieving the organization’s
strategies
Mindset Commitment and belief in the organization’s
strategy
Capabilities The business, customer, and organization
leadership acumen needed to lead successful
strategy execution
BTS research and over twenty years of practice proves effective execution
requires the right alignment, mindset and strategy execution capabilities or
E=AMC™.
Alignment
Mindset
E =
AMC™
Capabilities
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Future-State Current-State Alignment Mindset Capabilities
Strategy Alignment & Mindset Execution Capabilities
Expose Readiness Gaps
Plan to Execute
Engage the Organization
Define Great
Deep Practice
Daily High Performance
GREAT
From theory to practice
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Today’s discussion
No one way to think about strategy Execution is a big challenge Heterogeneity in talent Purpose, Mastery & Autonomy
E = AMC
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Thank you