Business Logistics & SCM

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Leadership Strategy… March 27, 2007

Filed under: Business Management — TSBL @ 5:01 pm

Strategy Execution:
The way to get strategy executed is not by telling people what to do. It’s by sharing the strategy in a way that everyone can understand and buy into it, and see how their jobs relate to it. Then by putting the people processes in place to enable and encourage strategy execution. Leadership is not simply a matter of behaviour and style. Leadership is mainly about strategy and getting your strategy executed.What is required of leadership?

This was the question that was asked in the recent Leadership Survey (undertaken by Management Centre Europe, the American Management Association and the Human Resource Institute of the University of Tampa). 1,600 executives and managers of global companies responded.

Respondents said the main job of leaders is to:
Formulate the strategy > Communicate the strategy > ENSURE STRATEGY EXECUTION > Measure the results
Once you have decided upon your strategy, then this strategy needs to communicated to your people. This critical task has replaced management’s traditional role of planning people’s work:
Communicating the strategy replaces planning people’s workIt is well-recognised that globalisation and technology contribute to a rapidly changing and complex business environment where “knowledge work” becomes ever more important. Consequently, managers at every layer are abandoning the idea that good management is about planning their people’s work. People increasingly must plan their own work and make their own decisions.The key to good management, and therefore good leadership, is in communicating and getting buy-in to the strategy, and in making sure that the decisions and actions people take are in alignment with the strategic direction of the organisation.
“Twenty-five years ago, management meant control. Managers put in controls, handed workers specifications, and established formal structures that ensured people did what they were told….. Today…executives say the hardest thing they have to do is improve people and corporate culture…. Rather than chasing another new management fad, or expecting still another magic bullet to come along, managers should focus on execution to effectively use the organizational tools we already have.” – Rosabeth Moss Kanter in Execution: The Un-Idea. Fast Company.
“Strategy Execution” is critical, yet it is easier said than doneLarry Bossidy and Ram Charan, in their book Execution: The Discipline of Getting Things Done strongly support strategy execution as a critical leadership role, making three clear statements:

1. Execution is a discipline, and integral to strategy.
2. Execution is the major job of the business leader.
3. Execution must be a core element of an organization’s culture

However, “Strategy Execution” appears to be a real challenge:
The difficulties with “Strategy Execution”Professor Lawrence G. Hrebiniak, Wharton Business School, recently identified the following issues. All four of the problems mentioned below are people-related issues:

* Managers are trained to plan, not execute.
* Some top executives do not see themselves as responsible for implementation of the strategies they formulate.
* Strategy execution happens over a much longer time frame than strategy formulation.
* Strategy implementation involves more people than strategy formulation.

Professor Lawrence Hbrebiniak at Wharton. Making Strategy Work: Leading Effective Execution and Change by Lawrence G. Hrebiniak, Wharton School Publishing. New Jersey, 2005.
Strategy Execution issues are mainly about People AlignmentThe execution of a strategy very often fails because leaders do not focus on the critical issue of aligning the people to the strategy and the processes.“The People Process is more important than either the strategy or operations processes. After all, it’s the people of an organization who make judgments about how markets are changing, create strategies based on those judgments, and translate the strategies into operational realities. If you don’t get the people processes right, you will never fulfill the potential of your business”. Larry Bossidy and Ram Charan in Execution.
Measuring People Alignment: You should measure and monitor how well your organisation or division actively supports and is aligned to your strategy, and – if required – uncover the reasons why this may not be the case.“If you can’t measure it, you can’t manage it”
Aligning Your People to Execute the StrategyHave a clear strategy and understand its implications throughout your companyIt is well understood that a company or a division or business unit has to formulate its strategy based on a clear Customer Value Proposition for a particular target market or segment. Each strategy is special, but most can be categorised broadly into one of three categories:

* Price/ no frills (value brand)
* Product plus (provide the most valuable product/service or combination)
* Specific customer solution (designed around a client’s needs).

Leaders, however, often underestimate that different strategies require different organisational behaviours – and therefore different leadership. This is particularly true in the following situations:

* Companies or divisions that are in the process of a strategy change. Change management efforts often fail because the strategy has changed and perhaps been communicated, but leadership behaviours and many people processes remain the same.
* Companies whose activities cover more than one strategy type. Different business units playing in different strategies need to have specific people processes that support the execution of their chosen strategy.

Clearly, leadership has to take a very different approach for each of the strategies mentioned above. But what, specifically, do leaders do to align their people to execute the strategy? Communicate the strategy and get buy-inRobert Kaplan and David Norton of Harvard Business School conducted research which found that a staggering 95% of employees in a company are either unaware of, or do not understand the strategy.

o Too often, strategy is formulated in a vacuum, and then centrally broadcast as a “done deal”. The communication is either too vague or too detailed for anyone to understand what it really means. No effort is made to check for understanding or measure the effectiveness of communication in terms of buy-in translated into action.

o The more people are involved in helping to shape the strategy, and/ or shape the execution plan, the more they feel part of the process and are likely to support it. Also, the more knowledge leaders can get from the front line of the organisation, the more effective their strategies and execution will be.

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