HWZ-Darden Konferenz: Strategy Execution

HWZ-Darden Konferenz: Strategy Execution

• 1.
  Scott Snell E. ThayerBigelow Research Chair Darden School of Business University of Virginia USA snells@darden.virginia.edu STRATEGY EXECUTION The 4A Framework Scott Snell Darden School of Business University of Virginia snells@darden.virginia.edu Leadership in the Face of New Technology
• 2.
  “A recent surveyof more than 400 global CEOs found that executional excellence was the number one challenge facing corporate leaders in Asia, Europe, and the United States, heading a list of some 80 issues, including innovation, geopolitical instability, and top-line growth.” -- Sull, Homkes, & Sull, (2015) In Search of Execution “Strategy did not differentiate top vs. bottom quartile firms.” • Minimal strategic differentiation between companies. • Competitive advantages were transitory. • Execution was the key...
• 3.
  "Five percent ofthe challenge is strategy. Ninety-five percent is execution.” --Carlos Ghosn, CEO Groupe Renault Why is execution such a challenge?
• 4.
  70% Strategic initiatives FAILED dueto poor EXECUTION John Kotter, HBR, 2012 37% Companies that are GOOD when it comes to EXECUTION HBR Survey 2010 of 1000 Executives Key Questions: • Why is strategy execution so difficult? What gets in the way? • Why do executives (need to) spend so much time on it? • What is required to execute well? What factors matter most? Source: University of Chicago 75% SENIOR LEADERS spend 75% of their time on execution capability. “Ninety percent of firms consistently FAIL TO EXECUTE strategies effectively.” Morgan, Levitt, and Malek, HBS, 2007 90% Most firms acknowledge they do not execute well. Executives spend a preponderance of time on execution. What’s the problem?
• 5.
  People believe thatthey understand execution—it’s about getting stuff done. But when you ask them how to get things done, the dialogue goes rapidly downhill. Larry Bossidy, CEO of Honeywell How can we do it better? “E=f(GSD)” “We have many useful frameworks for formulating business strategy, i.e., devising theory of how to compete. Frameworks for strategy execution are comparatively fragmented and idiosyncratic.” James Richardson (2008)
• 6.
  Abbott Accenture Ally Financial American Express BAESystems Blackstone Group BloominBrands Boeing Broadridge Financial Carter's CDW Chick Fil-A ChangAn Motors Citigroup Coca-Cola Delta Airlines Equifax McDonalds McGraw-Hill Companies McKesson Moody's Corporation Motorola Munich RE Newell Rubbermaid Northern Trust Pfizer Safe-Guard Products Sears SunTrust Symantec UPS U.S. Army Vail Resorts Workday Ericsson General Dynamics General Electric Gilead Hewlett Packard Hyatt Hotels IBM Intel ITW Kaiser Permanente Kelly Services Laureate LinkedIn Lockheed Martin Marriott Maximus Microsoft • Business challenge – what are your priorities for execution? • Drivers -- what are the critical drivers of execution capability (Pareto)? • Priorities -- how do you determine which elements matter most? Executive Roundtables
• 7.
  It is absolutelycritical, but… • Complexity. Goes beyond implementing a plan to include culture, organizational design, processes, technology, and HRM. • Time. Continuous and unending process—not a discrete event— manifested in a series of integrated decisions and actions. • Dynamism. Execution in the contemporary setting inevitably leads to discussions of disruption, adaptation, and innovation. What did they tell us?
• 8.
  ALIGNMENT  Clear strategicintent and accountability ABILITY  Human capital and collaborative capability ARCHITECTURE  Infrastructure and supporting systems HumanOrganizational PotentialKinetic TYPE OF RESOURCE TYPEOFENERGY The 4A Framework AGILITY  Rapid learning and responsiveness
• 9.
  Key Factors:  Connectexternally continuously  Lower the center of gravity  Learn fast, share widely  Strengthen the core AGILITY “Execution in high velocity industries is not simply a big ‘curtain up’ event. It has as much to do with principles of lean start up, experimentation, and rapid learning.” EPIC PASS • Data-driven marketing: CRM • Predictive analytics • Test and respond: personalize • Embed best practice Challenge: Transformation: Rapid learning and responsiveness
• 10.
  Behavior Demo Psych Usage Predictive Analysis Segmentation Personalize Learn
• 11.
  Key Factors:  Simplifystructures  Streamline to optimize processes  Real-time info/decision support ARCHITECTURE “Complexity is the enemy of execution. We’re not talking boxes and arrows. We’re focused on clarifying decision rights, and information flows to the right people.” ORION • Algorithmic “coaching” • Customer delight • Time, Miles, Cost • Sustainability - environment Challenge: B2B/B2C: Route optimization and decision support
• 12.
  Annual Savings Miles: 100m Fuel: 10mgallons CO2: 100mt Opex: $400m Architecture B2C vs. B2B Miles, fuel, emissions Package detail Custom maps Fleet telematics Algorithms
• 13.
  Key Factors:  Developa robust leadership team  Collaborative capability  Talent pipeline (talent syndrome) ABILITY “Key talent in the most critical jobs. I mean, we spend a lot of time on that.” DIFFERENTIATED TALENT • Pivotal jobs: the future of Microsoft • Talent talks • “The best development is a new job” • LinkedIn Learning Challenge: Agility & growth mindset: “learn it all”
• 14.
  • World-class content:Online library of 9,000+ digital courses (Lynda.com) • Data-driven personalization: Recommendations based on intelligence from your LinkedIn network, relevant multi-course learning paths and analytics. • Anytime, anywhere convenience: Bite-sized segments on any device, on or offline.
• 15.
  Key Factors:  Articulateclear strategic intent  Shared high expectations (culture)  Mutual accountability (data  learning) ALIGNMENT “Achieving alignment is the most important thing. It has to come first, and without it nothing much else matters.” PLATFORM • Online integration hub, information repository • Success Pages • Leader buttons – consistency of communication • Collaboration Portal • Pulse surveys – 2-way communication Challenge: Cultivate one integrated enterprise.
• 16.
  • ASSESS: Identifystrengths and gaps in your own execution profile. The process of self assessment often leads to frank discussion and discovery. • PRIORITIZE: Determine areas to focus on first. If there are areas of disqualification, they need to be addressed immediately. Other areas are compensatory. Alignment is the sine qua non for execution. • DEVELOP AND DEPLOY: Give people tools and resources they need, engage and empower them to identify and implement solutions. What’s Next?
• 17.
  Clear strategic intent Sharedperformance expectation/culture Accountability for results Disqualified Qualified Exceptional Talent capacity Engagement/Empower Collaborative capability Simplified structures System and technology utilization Streamlined processes External connection Strengthen the core Organizational learning 3.93 1.18 3.13 4.46 Execution Capability Profile
• 18.
  Further Consideration Strategy inand of itself may not be the best predictor of performance (same strategy different results). Execution is an intuitive idea. Surprisingly few organizations have a systematic approach or methodology. Strategy execution is more than implementing a plan. It requires a combination of agility, architecture, ability, and alignment. Technology is both a disrupter and key enabler. Its impact is operational, relational, and transformational. Checkpoint