CHAPTER 12

Strategy Implementation

• What is strategy implementation?• What is more important, strategy

formulation or strategy implementation?• What is the BIGGEST challenge for

strategy implementation?• One Word Answer??

• PEOPLE

I’d rather have a first-rate execution and second-rate strategy any time

than a brilliant idea and mediocre management.

--Jamie DimonCEO, JP Morgan

THREE IMPORTANT ELEMENTS

• Execution—getting things done

• Alignment—getting the right things done

• Change—Getting new things done

THE 7 S MODEL

The 7 S model helps describe organizational reality

• A set of buckets to sort information

The 7 S’s as a balloon• Push on one side, the other sides all move• The 7 S’s constitute a system

Two components:• The Hard Triangle: Strategy, Systems, Structure• The Soft Square: Staffing, Skills, Style, Shared

Values

Strategy

Structure Systems

SharedValues

Staffing Skills

Style

THE 7 S MODEL

Strategy

•Organizational Goals•Competitive Advantages

Structure Systems

•Division of Labor•Reporting

responsibilities

•Coordination•Control

•Evaluation•Rewards

Shared Values

•Common Belief•Priorities

Staffing Skills

•Hiring, Training, Promoting

•Technologies•What we do well

Style

•Interpersonal relationships

•Decisionmaking

Strategy

•Full Service•Regional Coverage•Focused on Core•Long Term View

Structure Systems•Decentralized

•Functional Expertise•Geographic Focus

•Tight Cost Control•Bonus Incentives•Merit Promotion

Shared Values

•Conservative•Profitability

•Loyalty•Decentralization

•Equity & Generosity

Staffing Skills•Hire good people

•MDP•Promote from within

•Customer Service•Cost Control

Style

•Informal •Friendly•Practical

The Positives The Positives

Strategy•No focus on niches

•No operating synergies•Few strategic assets

Structure Systems•Management by exception•Functional Silos with little

communication

•Excessive Internal Focus•Little incentive pay

•Promotion on Seniority

Shared Values•Comfortable•Complacency

•Excessive Frugality

Staffing Skills•Hire by W.O.M.•Little Training•Hard to Fire

Style•Non-confrontational

•Little Challenge & debate•Slow to decide

•“We know what customers want”

•Reliance on traditional ways

The NegativesThe Negatives

CHANGE: THREE KEY PHASES

Unfreezing Change Re-freezing

• Publicly admit that current state isn’t working

• Make a clear break with past actions or processes

• Develop new behaviors

• Use trial and error process

• Create new Alignment

• Embed new behaviors : training compensation, culture

Motivating Moving Maintaining

THE CHANGE PROCESS

Generate urgency

BuildCoalition

CreateVision

ShareVision

EmpowerAction

Short-Term Wins

ConsolidateGains

InstitutionalizeChanges

The Silent Phase(Unfreezing)½ -1 ½ years

The Active Phase(Change)1-2 years

Completion(Refreezing)

4-7 years