first-rate strategy poorly
executed every time
!" #ells $argo
driven activity
& Perceptive analysis of market conditions and company
capabilities
& Attracting and pleasing customers
Executing the Strategy
& !oing a good "ob of #orking t$roug$ ot$ers
& Good organization% building
& Building competitive capabilities
& Getting t$ings done and delivering good results
rafting vs. !x
% Move toward operating excellence
% *ougher and more time-consuming than crafting strategy
&mplementation
involves ' ' '
% *he needed actions and needed changes to
occur in rapid fire fashion
% S,epticism of employees and managers
regarding the merits of a new strategy
% *hreatening to their departments and own
careers
changes are reuired to execute the strategy
ta,es adept leadership to
& "vercome poc,ets of doubt
& +uild consensus and enthusiasm
answer to 2 #hat does my area
have to do to implement its part of
the strategic plan3 and what should
do to get these things effectively
and efficiently4
% Unite total organization behind
strategy
% See that activities are done in a manner that is
conducive to first-rate strategy execution
% enerate commitment so an enthusiastic crusade emerges
to carry out strategy
% !it how organi)ation conducts its operations to
strategy re"uirements
A $ramewor, $or !xecuting Strategy % Management's
handling of the strategy
implementation process can be considered successful if and
when:
- the company achieves the targeted strategic and financial
performance
- shows good progress in ma,ing its vision a reality
% +uild consensus on how to proceed
% Arouse enthusiasm for the strategy to turn
implementation process into a companywide crusade
% Empower subordinates to ,eep process moving
% Esta#lish measures of progress and deadlines
% $eward those who achieve implementation
milestones
% %irect resources to the right places
% 5ersonally lead strategic change process and the drive for
operating excellence
#hat *op !xecutives 7ave to (o in
0eading the mplementation 5rocess
Staffing the organi)ation
8. 5utting together a strong management team % *he most important
consideration is to fill ,ey managerial
slots with smart people who are
- clear thin,ers
- good at figuring it out what needs to be done
- s,illed in 2ma,ing it happen4
- delivering good results % !xisting management team may be
suitable % ore executive group may need strengthening
Staffing the "rgani)ation 9. Recruiting and Retaining apable
!mployees % *he uality of an organi)ation's people is always
an
essential ingredient of successful strategy execution %
Knowledgeable employees are a company's best source
of creative ideas for the nuts-and-bolts operating improvements
that lead to operating excellence
% 7igh performance companies ma,e concentrated efforts to recruit
the best and brightest people they can find and retain them
with:
- excellent compensation pac,ages
- challenging and interesting assignments % n instances where
intellectual capital greatly aids good
Recruiting and Retaining apable !mployees
8. Spending considerable effort in screening and evaluating 6ob
applicants3 selecting only those with suitable s,ills3 energy3
initiative3 6udgment3 and aptitude for learning and
adaptability to the company's wor, environment and culture
9. 5utting employees through training programs that continue
throughout their careers
;. 5roviding promising employees with challenging3 interesting3 and
s,ill-stretching assignments
<. Rotating people through 6obs that not only have great content
but also span functional and geographic boundaries
=. !ncouraging employees to challenge existing ways of doing
things3 to be creative and innovative in proposing better ways of
operating3 and to push their ideas for new products or
businesses
>. Ma,ing the wor, environment stimulating and engaging such
that employees will consider the company a great place to wor,
at
& Identifying the desired
competencies and
capa#ilities to build into the strategy to help
achieve a competitive advantage
& &utting desired competencies and
capa#ilities in place,
& Upgrading them as needed3 and
& 'odifying them as mar,et
Strengthening ompetencies
however imperfectly or inefficiently
experience
needed
organi)ational ability
Strengthening ompetencies
% Stage 9: As experience grows company personnel learn how
to:
- perform the activity consistently #ell at an acceptable
cost
- the ability evolves into tried and true competency or
capability
Managing the 5rocess 8. ore competence and competitive capabilities
are bundle of s,ills
and ,now-how that most often grow out of the combined efforts of
cross functional wor, groups and departments performing
complementary activities at different locations in the firm's value
chain
9. /ormally3 a core competence or capability emerges incrementally
out of company efforts either to bolster s,ills that contributed to
earlier success or to respond to customer problems3 new
technological and mar,et opportunities3 and the competitive
maneuvering of the rivals
;. *he ,ey to leveraging a core competency into a distinctive
competency is concentrating more efforts and more talents than
rivals on deepening and strengthening the competency3 so as to
achieve dominance needed for competitive advantage
8. #hether to develop core competencies by:
a strengthening the company's base of s,ills3 ,nowledge3 and
intellect
b coordinating and networ,ing the efforts of various groups and
departments
- actions of first sort can be underta,en at all managerial
levels
- actions of the second sort are best orchestrated by senior
managers
9. #hether to :
a develop the desired competencies internally
b outsource them by partnering with ,ey suppliers or forming
strategic alliances
% *he answer depends on what can be safely delegated to outside
supplies versus what internal capabilities are ,ey to the company's
long-term success.
- outsourcing means launching initiatives to identify the most
effective providers and to establish collaborative
relationships
- developing capabilities in-house means marshalling personnel with
relevant s,ills and experience3 collaboratively networ,ing the
individual s,ills and related cross-functional activities to form
organi)ational capability 3 and building the desired levels of
proficiency through repetition
& (ne )ig $ule* $ole and purpose of
organization
structure is to support and facilitate good
strategy execution+
& 5rior arrangements and internal politics
& !xecutive 6udgments and preferences about how to
arrange reporting relationships
different wor, groups and departments
(ice President (ice President (ice President
CEO
to "utsource % nvolves deciding which
activities are
essential to strategic success
activities that must be performed exceedingly well or in
closely
coordinated fashion if the strategy is to be executed with
real
proficiency
administrative house,eeping and
candidates for outsourcing
visible3 influential positions
% &rovide coordinating lin,ages
Structures $it which Strategies % $unctional structure best suited
for companies in one
particular business
% $or an organi)ation spread over many countries3 the company may
be organi)ed around geographic divisions
)*! +anufacturing Accounting +arketing
Structure
R & D M f g A c c t g M k t g
E l e c t r o n i c
P u b l is h i n g
R & D M f g A c c t g M k t g
O f f i c e
A u t o m a t i o n
R & D M f g A c c t g M k t g
V i r t u a l
R e a l it y
I n f o - T e c h
P r e s id e n t
Divisional
Structure
Structure
! e v e l o p i n g - e # P r o d u c t s P r o c e s s
5 r o c e s s " w n e r
r o s s $ u n c t i o n a l * e a m M e m b e r s
A c . u i r i n g a n d / i l l i n g C u s t o m e r O r d e r s P
r o c e s s
5 r o c e s s " w n e r
r o s s $ u n c t i o n a l * e a m M e m b e r s
S u p p o r t i n g C u s t o m e r s a g e P r o c e s s
5 r o c e s s " w n e r
r o s s $ u n c t i o n a l * e a m M e m b e r s
S e n i o r + a n a g e m e n t , e a m
!aton orporation
& *op managers retain authority
structures stressing empowerment
"rgani)ation Structure
% hallenge of empowering employees: % 7ow to exercise adeuate
control over the actions of
empowered employees so that the business is not put at ris, while
at the same time the benefits of empowerment are reali)edD
- placing limits on authority
- instituting compensation incentives that reward good
performance
apturing Strategic $it in a
(ecentrali)ed Structure % ross business strategic fits have to be
captured either
by:
- centrali)ing performance of functions having strategic fits at
the corporate level
% !fforts to decentrali)e decision ma,ing and giving leeway in
conducting operations have to be tempered with the need to maintain
adeuate control and cross- unit coordination
% (ecentrali)ation doesn't mean delegating authority in ways that
allow organi)ation units and individuals to do their own
things
oordination % Classic method of coordinating
activities 0 1ave related units
report to single manager
% pper%level managers $ave clout to coordinate efforts of t$eir
units
% /irms pursuing related diversification2 coordinating t$e related
activities of independent business units often re.uire centralizing
of a single corporate level officer
% !iversified companies commonly centralize staff functions as
public relations2 finance and accounting2 employee benefits2 and
information tec$nology at corporate level to3
% contain t$e costs of support activities
% facilitate uniform and coordinated performance of suc$ functions
#it$in eac$ business unit
% Close cross%unit collaboration is needed to build core
competencies and competitive capabilities in strategically
important activities t$at involve employees scattered across
several internal organization units
- personnel from sales which wins orders
- finance to chec, credit terms or approve special financing
- production produces the goods and replenish warehouse inventories
as needed
- warehousing to confirm whether items are in stoc,3 pic, the order
from the ware house and pac,age it for shipping
- shipping to choose the carrier to deliver the goods % $ast
ongoing introduction of new products
- cross functional processes involving personnel in RE(3 design and
engineering3 purchasing3 manufacturing3 sales and mar,eting
% Supply chain management
& ommunication
& oordination and control
% $ind ways to produce colla#orative efforts to
enhance firm's capa#ilities and resource strengths
remodeling traditional3 hierarchical structures built on
& $unctional speciali)ation and
late 8F@Gs and early 8FFGs was aimed at
& Recasting authoritarian3 pyramidal
been triggered by
& /ew strategic priorities
& !mpowered managers and wor,ers
% !ewer #arriers between & (ifferent vertical
ran,s
& $unctions and disciplines
& ompany and its suppliers3 distributors3 strategic
allies3 and customers
% Capacity for change and rapid
learning
% Colla#orative efforts among people in different functions
and geographic locations
Change & Learning