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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!