KGlobal Group of Companies
Volume 6: Strategic Implementation in Business
The two execution exemplars managers should focus their efforts on is a brilliant strategy to put them on a competitive map, A brilliant strategy may put you on the competitive map, But only solid execution keeps you there. Unfortunately, most companies struggle with implementation. That's because they over-rely on structural changes, such as reorganization, to execute their strategy.
Though structural change has its place in execution, it produces only short-term gains. For example, one company reduced its management layers as part of a strategy to address disappointing performance. Costs plummeted initially, but the layers soon crept back in.
Research by Neilson, Martin, and Powers shows that execution exemplars focus their efforts on two levers far more powerful than structural change:
Clarifying decision rights - for instance, specifying who "owns" each decision and who must provide input
Ensuring information flows where it's needed - such as promoting managers laterally so they build networks needed for the cross-unit collaboration critical to a new strategy
Tackle decision rights and information flows first, and only then alter organizational structures and realign incentives to support those moves.
In my Company www.kglobalword.com, the Practice ideas in my Company include the Below:
The following levers matter most for successful strategy execution:
In my Company www.kglobaworld.com we ensure that everyone in our company knows which decisions and actions they're responsible for.
In one global consumer-goods company, decisions made by divisional and geographic leaders were over-ridden by corporate functional leaders who controlled resource allocations. Decisions stalled. Overhead costs mounted as divisions added staff to create bulletproof cases for challenging corporate decisions. To support a new strategy hinging on sharper customer focus, the CEO designated accountability for profits unambiguously to the divisions.
In my Company www.kglobalworld.com we also encourage higher-level managers to delegate operational decisions. At the level of managers' inability to delegate led to decision paralysis. So the leadership team encouraged our Company managers to delegate standard operational tasks. This freed these managers to focus on developing the strategies needed to fulfill our Company mission.
In my Company www.kglobalworld.com we make sure important information about the competitive environment flows quickly to corporate headquarters. That way, the top team can identify patterns and promulgate best practices throughout the company.
More so in our Company, accurate information about projects' viability was censored as it moved up the hierarchy. To improve information flow to senior levels of management, our company took steps to create a more open, informal culture. Top executives began mingling with unit leaders during management meetings and held regular brown-bag lunches where staffs discussed the company's most pressing issues.
Facilitate information flow across organizational boundaries.
To better manage relationships with large, and cross-product customers, our company uses its units to talk with one another which charge our newly created customer-focused marketing group with encouraging cross-company communication. The group issued regular reports showing performance against targets (by product and geography) and supplied root-cause analyses of performance gaps. Quarterly performance-management meetings further fostered the trust required for collaboration. Which also help field and line employees to understand how their day-to-day choices affect our company's bottom line.
It's hard to balance pressing operational concerns with long-term strategic priorities. But balance is critical: World-class processes won't produce success without the right strategic direction, and the best strategy won't get anywhere without strong operations to execute it. To manage both strategy and operations, companies must take five steps:
- Develop strategy, based on the company's mission and values and its strengths, weaknesses, and competitive environment.
- Translate the strategy into objectives and initiatives linked to performance metrics.
- Create an operational plan to accomplish the objectives and initiatives.
- Put the plan into action, monitoring its effectiveness.
- Test the strategy by analyzing cost, profitability, and correlations between strategy and performance. Update as necessary.
In efforts to improve performance, most organizations go right to structural measures because moving lines around the organization chart seems the most obvious solution and the changes are visible and concrete. Such steps generally reap some short-term efficiency quickly, but in so doing address only the symptoms of dysfunction, not its root causes. Several years later, companies usually end up in the same place they started. Structural change can and should be part of the path to improved execution, but it’s best to think of it as the capstone, not the cornerstone, of any organizational transformation. In fact, our research shows that actions having to do with decision rights and information are far more important—about twice as effective—asimprovements made to the other two building blocks.