STRATEGY Core Concepts And Analytical Approaches .

STRATEGYCore Concepts and Analytical ApproachesChapter 10PowerPoint SlidesChapter 10 Learning Objectives1. Become familiar with the managerial tasks that crop uprepeatedly in company efforts to execute strategy.2. Understand why good strategy execution requiresastute managerial actions to staff the organization andbuild strong competencies and competitive capabilities.3. Learn what issues to consider in organizing the workeffort and why strategystrategy-critical activities should be themain building blocks of the organizational structure.4. Become aware of the pros and cons of centralized anddecentralized decision making in implementing andexecuting the chosen strategy.10–6Copyright 2012 by Glo-Bus Software, Inc.Chapter 10 RoadmapCrafting versus Executing StrategyCrafting the StrategyA Framework for Executing StrategyIs a marketmarket--driven activitySuccessful strategy makingdepends on:Building an Organization Capable of GoodStrategy Execution: Three Key ActionsStaffing the OrganizationDeveloping and Strengthening CoreCompetencies and Competitive CapabilitiesExecution-Related Aspects of Organizing theExecutionWork Effort10–7Copyright 2012 by Glo-Bus Software, Inc.Strategy Execution Is TougherThan StrategyStrategy-MakingA wide array of managerial activities must be attended to There are many ways to put new strategic initiatives inplace and keep things movingmoving——which paths to take? Bedeviling issues crop up and have to be resolvedIs an operationsoperations--driven activitySuccessful strategy executiondepends on: Business vision Perceptive analysis of marketconditions and the firm’scapabilitiesDoing a good job of organizationorganizationbuilding and people management Achieving continuous improvementsin how activities are performed Shrewd market positioning Outcompeting rivalsMotivating/rewarding people in waysthat support good execution Creating and deployingresources and capabilities toforge a competitive advantage Creating and nurturing a strategystrategysupportive culture Instilling a discipline of gettingthings doneCopyright 2012 by Glo-Bus Software, Inc.Implementing and executing strategy involves a firm’s wholemanagement team and all employees—employees—all are in one way oranother actively involved in the strategy execution process Strategy executioninvolves Much as every part of a watch has a role in making the watch functionproperly, it takes all pieces of an organization working cohesivelyfor a strategy to be wellwell-executedTopTop-level managers must lead theprocess and orchestrate big initiativesIt tests the ability of company managers to: Direct organizational change Build and strengthen competitive capabilities Achieve continuous improvement in operations and business processes Middle and lowerlower-level managers to see things Marshal organizationorganization-wide support and enthusiasm for executing the strategyas proficiently as possible Employees to perform their roles competently Consistently meet or beat performance targetsCopyright 2012 GLO-BUS Software, Inc.But they must rely on cooperation ofgo well in various parts of an organization andIdeally,Ideally, senior managers need to create a companycompany--wide crusade toimplement and execute the chosen strategy as fast and effectively as possiblepossible.Copyright 2012 by Glo-Bus Software, Inc.10–8Executing Strategy Is a Team EffortIt is a whole lot easier to develop a sound strategic plan thanit is to execute the plan and achieve the desired outcomes. Executing the Strategy10–9The strategy execution process involves every part of theenterprise—enterprise—all value chain activities and all work groupsCopyright 2012 by Glo-Bus Software, Inc.10–10Page 1

STRATEGYCore Concepts and Analytical ApproachesChapter 10PowerPoint SlidesImplementing a New StrategyRequires Adept LeadershipCore ConceptGood strategy execution requires a team effort.effort.Just because senior managers announce a new strategy doesn’tmean that organizational members will agree with it orenthusiastically move forward in implementing itAll managers have strategystrategy--executingresponsibility in their areas of authorityIt takes adept managerial leadership to:All employees are active participants in thestrategy execution process.process.All company personnel in one way oranother are actively involved in thestrategy execution processprocess.Copyright 2012 by GloGlo-Bus Software, Inc.Convincingly communicate reasonsfor the new strategy Overcome pockets of doubt Secure commitment of concerned parties Build consensus and enthusiasm Get all implementation pieces in place and coordinatedIdeally, senior managers need to create a companywidecrusade to implement and execute the chosen strategyas fast and effectively as possible.1010––11Copyright 2012 by Glo-Bus Software, Inc.10–12The Principal Managerial Componentsof the Strategy Execution ProcessA Framework for Executing StrategyThe specific hows of executing a strategy—strategy—the exactitems to be placed on management’s action agendaagenda——always need to be customized to fit the particulars ofa firm’s situationMaking minor changes in an existing strategy differsfrom implementing radical strategy changesSome managers are more adept at using this or thatapproach to achieving desired organizational changes.changes.Eight managerial tasks crop up repeatedly in company efforts to executestrategy:1. Developing the competencies, capabilities, and organizational structure to executestrategy successfully.2. Marshaling sufficient money and people behind the drive for strategy execution.3. Instituting policies and procedures that facilitate strategy execution.4. Adopting best practices and pushing for continuous improvement in how valuechain activities are performedperformed.5. Installing information and operating systems that enable company personnel tocarry out their strategic roles proficientlyproficiently.6. Using rewards and incentives to promote good strategy execution and theachievement of strategic and financial targets.There’s no definitive managerial recipe for strategyexecution that works for all situations or all typesof strategies or all managers.Copyright 2012 by Glo-Bus Software, Inc. 7. Instilling a corporate culture that promotes good strategy execution.8. Exercising strong leadership to improve execution, make corrective adjustments,and move toward companywide operating excellence as rapidly as feasible.10–13Copyright 2012 by Glo-Bus Software, Inc.10–14Devising an Action Agenda toImplement and Execute a StrategyFigure 10.1 Components of the Strategy Execution ProcessThe place to start is with a probing assessment of whatthe organization must do differently and better toexecute the strategy with a high degree of proficiencyand meet or beat performance targetsEvery manger must ask the question:“What needs to be done in my area of responsibility to implementour part of the company’s chosen strategy and what should I doto get these things accomplished in a manner that enables goodstrategy execution and produces the desired results?”results?”It is then incumbent on every manager to determineprecisely how to make the necessary internal changeschanges.Copyright 2012 by Glo-Bus Software, Inc.Copyright 2012 GLO-BUS Software, Inc.10–15Copyright 2012 by Glo-Bus Software, Inc.10–16Page 2

STRATEGYCore Concepts and Analytical ApproachesChapter 10PowerPoint SlidesBuilding an Organization Capable of GoodStrategy Execution: Three Key ActionsWhat Are the Signs ofGood Strategy Execution?Proficient strategy execution depends heavily on threetypes of organizationorganization--building actions:The two best signs of good strategyexecution are whether a company is: Meeting or beating its performance targets Performingvalue chain activities ina manner conducive to companywideoperating excellence When strategies fail, it is oftenbecause of poor execution: certain thingsimportant to successful strategy executionslip through the cracks.Copyright 2012 by Glo-Bus Software, Inc. 10–17Staffing the organization—organization—Putting together a strongmanagement team, and recruiting and retaining employees withthe needed experience, technical skills, and intellectual capitalDeveloping and strengthening core competencies andcompetitive capabilities—capabilities—Building proficiencies in performingstrategy--critical value chain activities and updating them to matchstrategychanging market conditions and customer expectationsStructuring the organization and work effort—effort—Organizingvalue chain activities and business processes and deciding howmuch decisiondecision-making authority to push down to lowerlower-levelmanagers and frontline employees10–18Copyright 2012 by Glo-Bus Software, Inc.Putting Together a StrongManagement TeamFigure 10.2 The Three Components of Building an OrganizationCapable of Successful Strategy ExecutionOne of the key organizationorganization-buildingtasks is filling managerial slotswith smart people who are: Clear thinkers Good at figuring out whatneeds to be done Skilled in “making it happen”and delivering good resultsWithout a smart, capable, resultsresults-oriented managementteam, the implementationimplementation-execution process ends upbeing hampered by missed deadlines, misdirected orwasteful efforts, and/or managerial ineptness.Copyright 2012 by Glo-Bus Software, Inc.10–19Recruiting and RetainingCapable EmployeesPutting Together a StrongManagement Team (cont’d)Sometimes a firm’s existing management team is suitableThe quality of an organization’s people is always anessential ingredient of successful strategy executionAt other times it may need to bestrengthened or expanded by: Promoting qualified people from within and/or Bringing in outsiders whose experiences, talents,and leadership styles better suit the situation10–20Copyright 2012 by Glo-Bus Software, Inc. Knowledgeable, engaged employees are a firm’sbest source of creative ideas for the nutsnuts-andand--boltsoperating improvements that lead to operating excellenceThe firm’s entire workforce(managers and rankrank-andand-fileemployees) needs to be agenuine resource strengthOverriding aim is to assemble a critical mass of talentedmanagers who can function as agents of change andfurther the cause of firstfirst-rate strategy executionA firm needs to get the right executives on the bus—bus—and the wrong executives off the bus—bus—before tryingto drive the bus in the desired direction.Copyright 2012 by Glo-Bus Software, Inc.Copyright 2012 GLO-BUS Software, Inc.10–21Copyright 2012 by Glo-Bus Software, Inc.10–22Page 3