Secrets to Successful Strategy Execution

Md Rezaul Akhlak (ZR11) Anika Rahman (RQ 53) Batch 52D

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Building Blocks of Crafting and Executing Strategy

Developing Vision, Mission and

ValuesSetting

ObjectivesCrafting Strategy Execution

Monitoring and

Taking correction

action Transitioning from Strategy to

Execution

Strategy guides few Fundamental Questions

How will the company reach there?

Where does the company want to go?

How does the company know that they have achieved what they strategized?

• Market leader• Top be top 3 in

revenue • Deliver the best

service• Cost Leadership • Merger & Acquisition• Differentiation

• Balanced Scorecard • Monitoring

Facts outlined from HBR Assessment of Organizational Capabilities • 1,25,000 profiles representing executives •3 out of every 5 rated company as weak in execution

Important Strategic and Operations decisions are NOT quickly translated

into EXECUTION

Why Strategy Fails to Execute?

Strategy fails because employees don’t know what responsibilities they are entitled to do?

Case: Global Consumer Packaged goods company

Why Strategy Fails to Execute?

Functional Leader vs.

Divisional & Geographic Leaders

Strong execution Organization: 71%Weak execution Organization: 32%

Source: Harvard Business Review

Case: Global Consumer Durables Company

Why Strategy Fails to Execute?

Important Information about competitive environment doesn’t get to the headquarter quickly? Strong execution Organization: 77%

Weak execution Organization: 45%

Source: Harvard Business Review

Whitewashed or Vanished along the wayPoor understanding of regional pricing

Case: Caterpillar Company

Why Strategy Fails to Execute?

Decisions are frequently second-

guessed

Strong execution Organization: 45%Weak execution Organization: 71%

Case: Global Charitable Organization

Decision vetted by

many Parties

Lack of

accountabili

ty

Manager’s

Delegation

Source: Harvard Business Review

Why Strategy Fails to Execute?

Information doesn’t flow freely across

organization

Strong execution Organization: 55%Weak execution Organization: 21%

Source: Harvard Business Review

Case: B2B company

• Lack of collaboration • No report to product Unit• Minimal effort assumed by customer

Customer vs Product Unit

Why Strategy Fails to Execute?

Field and line employees don’t have the information they

need to understand the bottom line impact of

decisionsStrong execution Organization: 61%Weak execution Organization: 28%

Placing differently frond and back

bank officers

Competing goals between them

Failed to provide necessary information

Increase in Operational Costs

Case: Merger of regional Banks

Source: Harvard Business Review

Good strategy is never enough…

Good strategy + Good execution=

Superior Performance

4 Building Blocks to Influence Execution

Decision Rights

Information Flows

Motivators Structures

Mapping Improvement to the Building Blocks Focus corporate staff

on supporting business Unit

Decision

Focus headquarters on Strategic Issues

Establish individual Performance

measures

Improve Field to Headquarter

information flow

Create cross functional teams

Introducing differentiating Performance

awards

Reinforce Accountabil

ity and Encourage Performanc

e

STARTEGY EXECUTIONA COMPETENCY THAT CREATES COMPETITIVE ADVANTAGE

STATS REGARDING EXECUTION OF STARTEGY

60% organizations don’t link their budgets to their business strategy.

67% organizations have no link between their priorities and business strategy.

75% middle managers don’t have incentives linked with their business strategy.

95% of the typical workforce has no clue about what a strategy is!

Source: SHRM/BSCol Research Study 67-17052 “Aligning HR with Organization Strategy”, 2002

THE UPSHOTS OF STRATEGIC EXECUTION

Companies who successfully execute their strategies experience dramatic benefits. Example: KeyCorp.

From a Palladium Group Inc. Survey, it was found that 70% of the organizations with a formal strategy execution process reported superior performance.

These organizations were also 8 times more likely to use technology solutions.

STRATEGY EXECUTION ROADMAP

Describe and Measure Prioritize

Take Feedback

Communicate

Coordinate & Integrate

STEP 1: DESCRIBE & MEASURE

Translate the strategy to operational

terms

Come up with

measures that can be

clearly communicated and acted

upon

Convert the strategic

objectives into balance

scorecard

Do the strategic mapping

STEP 2: PRIORITIZE

Identify the strategic key processes

Create “Theme Teams” if required

Break down the frequently found

silos

STEP 3: TAKE FEEDBACK

Conduct regular meeting

Review the strategies

Test all the theories with feedback from

the real world.Adapt with the

strategies

STEP 4: COMMUNICATE Got to communicate the strategies to all levels of

employees. Knowledge workers make decisions on a routine basis. Newsletters and brochures can be good ways to maintain

communication. Include strategic awareness in the formal training

program Walk the talk. Use quarterly meeting, the email Q & A etc. as a medium

to communicate directly with the frontline workers

STEP 5: COORDINATE & INTEGRATE

Align all the business units and support units to the strategy.

Create an organized process to achieve the synergies of a better strategic alignment.

Take help from strategy Maps and Balance Scorecards.

Enable the support units to focus their initiatives on the strategic priorities.

STEP 6: LINK WITH BUDGET Create structural consistency between planning and

budgeting process. Come up with creative new approaches if possible Elcoteq created Stratex (Strategic Expenditure) to

differentiate certain expenses from the conventional Opex (Operating Expense) and Capex (Capital Expense)

Create a separate process that removes strategic investments from the system used to manage routine operations.

Make strategy execution a

core competency

Create a competitive advantage

Achieve dramatic

benefits for the

shareholders

Thank You!