OPI European Forum 2019 Strategic Transformation and Execution

OPI European Forum 2019

Strategic Transformation andExecution

6 June 2019

George Yip

Emeritus Professor of Marketing and Strategy

[email protected]

Copyright, G. S. Yip, 2019

Imperial means Intelligent BusinessImperial College Business School 2

“Strategic Transformationis the chief executive’s in-depth guide to how to sustain and refresh strategy over time.”

Financial Times,

24 January 2013, p. 12.


Why Does Strategy Matter?

Effective strategy gets you better

performance with fewer resources.



Why Is Strategy Difficult?

If managers were going to do it anyway,

you would not need a strategy.



“ Our strategy is to be number 1.”



What is Strategy?

Strategic Objective

Business Model



A Clear Strategic Objective

BEAT

BENZ



How It Should WorkCascade of Objectives, Strategic Moves and Execution

EXECUTIVE STRATEGIC

OBJECTIVE

(example of one)

STRATEGIC

MOVES

(example of one)

EXECUTION

(example of one)

Chief Executive Diversify Create new line of

business

Select and start up new

business, appoint

general manager

General Manager Make the new

business a success

Develop appealing

new products

Set up new product

development unit,

appoint unit manager

New Product

Development

Unit Manager

Run the unit well,

including delivering

successful new

products

Put in the right

processes, systems,

and workers

Monitor processes,

systems and workers


Why Transform?


Fallen Stars


Two Primary Uses of Strategy

1. To change (market etc.) position within current business model:

2. To change the business model:

Strategye.g. 10% share

e.g. 15% share

Incremental

Strategy

OldBusiness

Model

New Business

Model

Radical


The Problem of Strategic Drift

Environmental

Change

Amount

of

Change

PHASE 1Incremental

Change

PHASE 2Strategic

Drift

PHASE 3Flux

PHASE 4Transformational

Change or Demise

Amount

of

Change

TimeSource: Gerry Johnson and

Kevan Scholes


Why Strategic Drift?

- Individual cognitive limits- “Steady as you go” -Core rigidities-Organizational culture

• Lagged performance effects

• Past success: The Icarus Paradox


The Fate of High Flyers


“When the rate of change inside the company is

exceeded by the rate of change outside the company,

the end is near.”


“The best way to predict the future is to create it.”


Learning as a Source ofCompetitive Advantage

“The ability to learn faster than your competitors may be the only

sustainable competitive advantage.”


How to Tell When Your Business Needs Strategic Transformation

When it goes bankrupt

When it loses money, consistently

When it loses market share

When sales go down

BUT BY NOW IT IS TOO LATE

To avoid trauma for the company, shareholders,

employees, customers, partners and managers.


How to Anticipate the Need for Strategic Transformation

Look for the following indicators:

-A new technology or product form introduced into your industry.

-By someone else

-Which your top managers refuse to regard as significant, e.g., motorcycles, personal computers, coffee, music downloads, Apple iPhone, online MBA.


How to Anticipate the Need forStrategic Transformation, cont.

Sales and profits good.

BUT the most innovative/fashionable/desirable

customers desert you.

e.g., Cadillac

e.g., Nissan in U.S. in 1990s

- Customer loyalty and retention declines

- The smartest employees do not join you

- Your company is worth more broken up


Transformation of British Airways

• State owned until 1982

• BA =“ Bloody Awful”

• Rules for flight attendants

• New advertising campaign

• Product innovations

No. 1 among world business travellers.



Develop the

Organization

Achieve

Mobilization

Create the

Vision

Build the

Measures

Construct an

Economic

Model

Align Physical

Infrastructure

Achieve

Market

Focus

Invent New

Businesses

Change Rules

Through Information

Technology

Create Reward

Structure

Build Individual

Learning

Redesign

Work

Architecture

Source: Francis J. Gouillart and James N. Kelly,

Transforming the Organization, p.9

Transforming the Organization


Few Companies Can Transform Themselves Before Financial Trauma

All kinds of environments

Many probably in protected environments

Performed and transformed

215 companies

6

SSTs

22

SSTs

187 +

Non-LT Performers


Traditions of transformation

TRADITION

OF

CONTINUITY

TRADITION

OF

ANTICIPATION

TRADITION

OF

CONTESTATION

TRADITION

OF

MOBILITY


Virtuous transformation cycle


Pile it High and Sell it Cheap


Initial

Business

Model

(“Pile it High /

Sell it

Cheap”)

‘Unruly’

Corporate

Diversification

Alternative

Coalition

Corporate /

Business

Re-

Alignment

Alternative

Strategic

Direction

1932 1950s 1960s 1990 2000

Tesco Strategy Changes


Tesco Superstore


My New Job in 2008


7,500 students

450 faculty and staff


7,500 students

450 faculty and staff

Never managed more than 15 people.


Managing Faculty


RSM Strength


RSM Weakness


“It is easier to act your way into a better way of

thinking than to think your way into a better way

of acting.”

Richard Pascale, Stanford Business School


Strategy Formulation and Strategy Execution


“Conquering the world on

horseback is easy. It is

dismounting and governing that

is hard.”


Defining Strategy Execution

- All strategies need to be executed

- Not the same as operational execution

- Strategy execution → new, different situation (Lexus)

- Operational execution → same situation (perhaps better but not

different)

- Some strategies are more difficult to execute than others,

depending on

• Extent of stretch in strategic objectives

• Fit with current business model

• Change capabilities of organization

• Implementation capabilities of organization


IntelFrom memory to microprocessor


VolkswagenIntended versus Emergent Strategy


Key Points about Execution

- Execution is a discipline, and integral to strategy

- Execution is the major job of the business leader

- Execution must be an integral element of an organisation's

culture

- People think of execution as the tactical side of business.

That's the first big mistake. Tactics are central to execution, but

execution is not fixed. Execution is fundamental to strategy and

has to shape it.

- Execution is a systematic way of exposing reality and acting on

it. e.g., Jack Welch's style of management

Source: L. Bossidy & R. Charan with C. Burke, Execution: The Discipline of Getting Things Done, Random House

Business Books.


The Seven Essential Behaviours of Strategy Execution

1. know your people and know your business

2. insist on realism

3. identify clear goals and priorities

4. follow-through

5. reward the doers

6. expand people's capabilities

7. know yourself

Source: L. Bossidy & R. Charan with C. Burke, Execution: The Discipline of Getting Things Done,

Random House Business Books.


Role of the Leader in Execution

- Running the three core processes

- Reward systems and the norms of

behaviour

- Only if the right people focus on the

right details at the right time.

- Moving from the concept to the critical

details

- Leaders get the behaviour they exhibit

and tolerate.Source: L. Bossidy & R. Charan with C.

Burke, Execution: The Discipline of Getting

Things Done, Random House Business

Books.


My Greatest Personal Learning

Do what is best for the organization even if a risk to your job.

Date post:	15-Apr-2022
Category:	Documents
Upload:	others
View:	4 times
Download:	0 times

OPI European Forum 2019 Strategic Transformation and Execution

Documents