How to improve the design and execution of strategy
Systemic success - Systemic failure
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diseases
Likely symptoms of problems
Despite the new strategy, lots of communication, action and support,
“As is” continues. Things appear to be on course,
but a year later the strategy has not been executed.
Preliminary diagnosis
75% of middle managers do not have their incentives linked to
the strategy. When this happens, the primary conduit between the
strategy thinkers and those that will execute it fail to have
their "skin in the game".
60% of organisations fail to tie their budgets to the strategy.
When this happens, one of the primary management control systems
within the organisation is failing to support the strategy.
These are just two examples of a failure to design the processes
to support the strategy. Another example is when the recruitment
process fails to encourage the attitudes and cultural attributes
that the company needs to succeed. In all these cases the results
will be the actions of the people working against the strategy
(perhaps maintaining the status quo), or at best, not working
towards it.
Case studies
A new venture within a blue chip company had had a detailed strategy
completed for them by a major strategy consultancy. It was bound
in beautiful binders in a presentation box. We were asked
to help them develop shared objectives to drive the team for the
first 9-12 months and create an executive pay system.
It quickly became apparent that the team members had different
views of what was in the box. We helped them develop a consistent
and agreed view and identify the objectives that they had to achieve
to make sure the venture got off the ground. This included identifying
where individual and shared responsibility should lie for objectives.
This became the basis for the executive remuneration system as
they built the company from the ground up. It went on to
grow to a significant venture sold on to make significant profit
for the company.
In a separate case, a major utility player wanted to create a
climate of autonomy and responsibility amongst its senior and
middle managers. In developing the local strategies, objectives
and measures, it quickly became apparent that trust was a major
issue. Whenever qualitative measures were proposed where
judgment was needed, the initial reaction was always, "but
we can't trust them to be truthful about that".
Clearly there was a large gap between senior management intent
and middle management's sense that they could trust their staff
that far. A gap that would undermine the overall plan of the executive.
By working with them we helped them work through their trust
issues and start to try such approaches. Only by breaking through
this trust gap, would the company hope to execute its strategy
as fully as it aspired to.
Underlying solutions
We use a variety techniques to identify systematic issues. They
can be in the way people work, what they think and believe, or
in the practices and procedures of the organisation. By being
sensitive to the underlying needs and cultural change that is
required, then listening out for where the current belief systems
rub up against these needs, we are able to help an organisation
break through the (invisible) barriers that will undermine the
strategy's execution.
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