The Language of Strategy 2 Execution

Better Execution: Stick to Your Strategy? [Part 2]1
ronald.lamb posted in Execution of Strategy, Challenges, Performance Improvement, Improving S2E (Strategy to Execution), Guiding Principles, Life Lessons & Execution, Strategy, The Language of Strategy to Execution on September 21st, 2006

Part 2
Yesterday I started with Part 1 of a response to a posting by Rob May of BusinessPundit.com.

“Does Change Help Link Strategy and Execution?”

He’s curious about how companies can improve the link between the two.

Today I’m going to respond to Rob’s second question:

“[Do] companies that stick with a similar strategy for too long wind up with employees that are complacent about execution? Perhaps they have executed the same strategy for so many years they have mastered it.”

Here are my observations about firms that have a strategy that hasn’t been changed in a long time.

1. We don’t have a strategy: Companies that don’t refresh their strategy for long periods have employees who typically say that they don’t have a strategy. Things change that affect any strategy. Strategies are based on internal goals, external opportunities and constraints. A change to any of these requires an adjustment or re-confirmation of the legitimacy of the strategy. What more often occurs is that change occurs and the famous strategy binder that originally was seen as the holy-grail for the firm is hence forth seen as obsolete.
2. We go off-site once a year to develop our strategy: How wonderful it would be if we could organize all the internal and external changes that have a major impact on our firm to occur just before our annual off-site strategy exercise. We could deal with all of them at once at set our strategic course for the next year. We could then revise our strategy at some nice location each year about the same time.
   “Wait a minute now, that’s what we do now! But we haven’t sorted out how to ensure the only significant change happens before our strategy session.” Employees don’t become complacent with a stale strategy, they ignore it as irrelevant based on accumulated change since it was created and communicated.
3. You can’t master a strategy: As explained above, there is no such thing as “mastery of a strategy”. You can’t go on auto-pilot thinking that you’ve mastered your strategy. Think of how disruptive e-commerce was to the retail industry or personal financial services. Companies like Sears and Merrill Lynch who might have seemed to have ‘mastered’ their strategy had some very hard lessons to learn from Amazon and e-Trade.
4. Complacency comes from believing in your own hype: Yes employees can become complacent in execution. As Jim Collins suggests, it comes from a failure to face the brutal facts. Some organizations breed and work on sustaining an incredible story about their capabilities and success. They loose any real ability to tell when they’re dead wrong. When the imagined reality varies from the real situation, it seems to be the time to hold on to the myth even harder than before. Believing in the myth of being successful in execution allows you to ignore change around you. It allows you to avoid figuring out what you need to change to remain successful.
   
   The worst case of it I ever experienced was with DEC (Digital Equipment Corp). They were the most famous mini-computer vendor in the 1970’s and 80’s. In the early 1990’s as head of sales for a division of Westinghouse, I brought them in as a partner during a negotiation for a $100 million outsourcing deal. We were selected and were going through contract negotiation and a detailed examination of the deal. The client had a number of concerns that they wanted addressed by very senior DEC executives with DEC’s commitments put into the contract. The DEC executives were so insulted by the questioning of their capabilities, that they treated the client and their questions with unhidden contempt. To my shock, one senior DEC even resorted to calling one of the clients a @#@$&! idiot to their face for asking some questions about their ability to deliver their services. Needless to say the client ultimately broke off negotiations. The DEC executive point of view was that the clients were idiots for not taking the deal. Their own hype about their capabilities was much more real and important to them than examining the client’s sense of risk. Needless to say my experience wasn’t unique. DEC ended up breaking up their organization into parts and selling it off bit by bit until it was gone.

• What is success, if you continuously change your strategy?
• What is successful execution when you don’t get to complete projects and achieve targeted outcomes?
• What is success when you don’t update your strategy?

My short definition of execution is: Leveraging the assets that you have available, to achieve targeted outcomes.
Successful execution is: meeting expectations in the execution of targeted outcomes. In order to execute a strategy you translate it into targeted outcomes.

Summary of Suggested Rules:

1. A strategy that changes too often puts initiatives and execution in disarray.
2. A strategy that changes too infrequently becomes irrelevant. The targeted outcomes and their associated initiatives are relevant by chance rather than by design.
3. Few organizations can change their strategy at the speed of change. Most strategies reside in binders and PowerPoint presentations. They are not easily altered, and rarely read.
4. Organizations can translate their strategy into targeted outcomes. It allows the organization to modify these targeted outcomes and their associated initiatives at the speed of change. Execution stays relevant.
5. Strategy as translated into targeted outcomes can exist at any level of an organization. Targeted outcomes are the object of successful execution. The above rules apply to execution at any level of an organization.
Challenges Execution of Strategy Guiding Principles Improving S2E (Strategy to Execution) Life Lessons & Execution performance improvement strategy The Language of Strategy to Execution

Better Execution: Change Your Strategy? [Part 1]0
ronald.lamb posted in Execution of Strategy, Challenges, Performance Improvement, Organization Change, Expectations, Improving S2E (Strategy to Execution), Life Lessons & Execution, Strategy on September 20th, 2006

Rob May of BusinessPundit.com, poses a really interesting question in a Blog posting.

““Does Change Help Link Strategy and Execution?”

He’s curious about how companies can improve the link between the two. The key question he poses is:
By consistently changing your strategy, do employees become more focused on the execution of it? Do changes in strategy lead to better execution?
I’m going to give my response to his interesting question in three parts.

Part 1:

• Too frequent change in strategy hurts execution success.

Part 2:

• Employees don’t become complacent about execution due to infrequent change in strategy.
• You can’t master a strategy.

Part 3:

• A famous Harvard University study, known as the Hawthorne Effect, may actually suggest that you can get better execution if you change strategy often.

Part 1

“By consistently changing your strategy, do employees become more focused on the execution of it? Do changes in strategy lead to better execution?”

This is a great question. It may seem like the answer is straight forward, but there is an interesting wrinkle based on a famous, Harvard University study. I’ll return to this study after reviewing the obvious response. I think most people would immediately answer that changing the strategy frequently will lead to poor execution. Here’s are some reasons why:

1. Uses up key Resources: Creating a coherent strategy is management intensive work. It eats up leadership time and focus. Refinement of a strategy is fine since it supports existing momentum. Changing strategy requires serious analysis, building of the end state and all the efforts necessary to gain agreement, communicate it, and build the plans to achieve it. Execution suffers due to management focus on the strategy rather than execution.
2. Wait and See: Critical work and decisions get delayed during strategy formulation work, as employees “wait and see which way the strategy goes”. “There is no reason to start some critical initiatives if they are associated with the new strategy, is there?” Execution gets delayed.
3. More Project Start-up Time: In many organizations a large majority is project oriented and doesn’t know what the strategy is. What they want is a good definition of the project they’re supposed to accomplish. Changing strategy means changing requirements. Execution suffers as projects associated with the former strategy have to get turned off and project resources released. New projects take time to get started as resources become available. Value isn’t achieved until the project team is providing deliverables that combine with other projects to create value. Execution suffers.
4. Feeling that You’re Delivering Value is Destroyed: Teams like to accomplish their project scope, on-time, on-budget. It’s what they get rewarded for. Changing people’s projects regularly doesn’t let them accomplish much. It is hard to be proud of being part of continuously partially completed projects. Execution suffers as team member’s sense of the value of accomplishment is destroyed.
5. This Too Shall Pass: When strategy changes frequently, it is tough to measure people and the value they are delivering. They start to understand that they’re not measurable. They realize that management has no ‘stick-to-it-ness’. People nod at all the right places when asked to change, but then do nothing. No one will check and they believe any change won’t be sustained anyway. It will go back to business as usual. “This too will pass” becomes the reaction to requests to change.

Part 2 Continues tomorrow.

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7 Steps to Eliminate Your Organizations’ Sacred Cows0
ronald.lamb posted in Execution of Strategy, Business Transformation, Challenges, Organization Change, Getting Everyone on the Same Page, Improving S2E (Strategy to Execution), The Language of Strategy to Execution on September 12th, 2006

The University of Michigan, surveyed 308 executives during 2005 on the variables that were most likely to derail their strategy. The variable chosen most frequently, by 38% of the respondents was, was “their Company’s Past / Habits”. That seems to suggest either an unwillingness or lack of a capability to address these habits. In many organizations these are also called the sacred cows or “the elephant in the room that no one wants to talk about’’.

Jim Collins has it right in his best seller “Good to Great”. One of the most important habits for a great company is to “Face the Brutal Facts”. One set of facts that few mature organizations face is the entrenched habits that hold them back from high achievement.

It is absolutely possible to change deeply entrenched organizational habits. I worked with a business unit of a large firm that needed to address this issue head-on. They were given five years to achieve a production target well above their historic ability, or risk being sold. They desperately needed to depart from their past, from the habits that had held them back.
They were going to need everyone’s maximum effort to achieve the target. That meant ensuring that everyone was on the same page, committed to the same objectives. We decided to identify to the whole management team what we believed were the problem habits and how they were directly linked to achieving the targeted outcomes. We then showed the actions we wanted people in the organization to take. In many cases this meant changes to deeply rooted leadership practices. The top leadership team had to lead by example. The process gave license to all of the team to ‘correct’ their peers when they were using behaviors that propped up the old habits.

They also embraced a reporting mechanism that would provide the full organization with visibility on progress. It showed that the leadership was serious about change.

The result was a great success. It was especially rewarding to hear the team formally declare when any of the ‘bad’ habits was sufficiently eliminated. It was then removed as a risk to success on the execution roadmap.

The method can work for any sized organization. To achieve the same result here are seven steps to follow;

1. Identify the habits you’d like to change (free flowing interviews using a trusted third-party works best),
2. Identify the root cause of the habits (to ensure you don’t just end up hiding the symptoms),
3. Put in place outcomes and associated initiatives to remove the cause of those habits.
4. Structure a logical diagram to communicate the links between the main program’s targeted outcomes, the habits you want to remove and the root causes.
5. Put in place a way to track change efforts on the root causes. A modified cause/effect diagram also known as a fishbone diagram works well.
6. Start by coloring the text for all the identified ‘bad’ habits and route-causes in red. When you start working on improving any of them, change the appropriate text colors to orange. When you agree that the cause / or symptom is sufficiently removed, color the text in green. It should also allow you to identify reduction in the visible symptoms that the organization has for so long associated with those habits.
7. This should provide a real sense of accomplishment. Celebrate successes. You should notice fewer grumblings about ‘we’ll never be able to get it done’. It shows the organization;
   • you understand what the barriers are,
   • that they are true impediments to success,
   • that actions are in place and
   • you recognize when there is real improvement.

Feel free to contact me if you’d like further information by using the comment link on this posting.

Business Transformation Challenges change execution Execution of Strategy failure Getting Everyone on the Same Page Improving S2E (Strategy to Execution) organization Organization Change performance performance improvement process project strategy success The Language of Strategy to Execution

Did You Just Volunteer for Some Work?0
ronald.lamb posted in Execution of Strategy, Challenges, Resource Management, Relative Importance, Getting Everyone on the Same Page, Improving S2E (Strategy to Execution), Life Lessons & Execution, Strategy on September 7th, 2006

We don’t generally think of corporations and government organizations as volunteer organizations, but stop and think about it. How much of where you allocate your own time is influenced by what you choose to do. Probably more than you’d like to admit. We seek to get on projects that interest us. In that way we are volunteering our time.
As a leader, you’re much more likely to get people to voluntarily contribute their time, skills and money if they can sign up to help achieve a targeted outcome rather than sign up to execute a project.

I’ve recently had the opportunity to speak to, and in some cases work with, the leaders of organizations that rely on volunteers to achieve their strategic goals. They’ve ranged in size from a single leader and advisory board for a professional services community (PSVillage), to a large open source application development group (Wordpress), to the Department of Energy and a number of America’s largest energy firms. In each case we talked about what their goals were and how they were going about achieving them. In most cases they identified a series of projects that they wanted to get done. They also all had limited resources for the size of their targeted objectives. None of them had any way to ensure long-term commitment from participants. It would be huge value to them to be able to increase the level of volunteerism and sustained commitment to the targeted objectives.

Volunteers start with high energy and high estimates of the time and resources they commit to. Lack of progress, frustration and lack of control over their ability to achieve success cause their commitment to wither. As a result execution success is unpredictable. Leaders have to be ever optimistic and to some degree charismatic to continue to attract and retain volunteers. On the other hand, they also have to be realistic and level-headed to continuously deal with the logistics and disappointment of incomplete or missed commitments and execution failure.

What none of them had figured out was how to effectively connect willing contributors with what needs to be done. They had no effective way to connect resources to work, other than through identified projects. This isn’t very different than what occurs in any organization. The only difference is that in traditional organizations, managers direct their people to work. They too had been directed by higher-level managers and their performance objectives. The larger the organization, the more layers are involved. In volunteer or membership based organizations, the link between work and resources is mostly one to one. Each volunteer can decide for themselves where they’d like to participate.

The approaches taken by the organizations I spoke to were each project based. The leaders had defined the projects they felt were necessary. They identified them to their pool of potential volunteers in the hope that they would be taken up by a volunteer or member. I was able to work with the Department of Energy and the energy firms to shift their thinking first to outcomes and only then to projects. They were able to create a roadmap that all understood. There was a renewed commitment to a high-level targeted outcome. They developed a logical process for aligning volunteer activity to the most important interim outcomes. For the others, they will get great value if they can start to identify targeted outcomes and their linkage to higher level targeted outcomes.
This will provide volunteers and their organization with the ability to:

• Understand which are the most important outcomes.
• Choose or influence their participation in the outcomes that they are most attracted to and can achieve.
• Understand how that contribution supports the highest level outcome of the organization.
• Understand wider context through being aware of the surrounding targeted outcomes, and so cooperate on their achievement.
• Use their own skills to design the project / actions necessary to achieve a targeted outcome.
• Provide an opportunity for greater emotional investment and sense of achievement in reaching a targeted outcome.
• Provide sustained commitment, to achieve various projects necessary to achieve a targeted outcome.

For volunteer organizations, corporations, and governments you can increase the success level of execution by getting greater commitment to the most important outcomes and attract sustained participation. These are invaluable in all of these ‘volunteer’ organizations, just like the one you’re in.

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The Office of Strategy Management: A Good Idea or Not?0
ronald.lamb posted in Execution of Strategy, Improving S2E (Strategy to Execution), Strategy on September 4th, 2006

There is some disagreement around the value of the creation of an Office of Strategy Management. Some years ago I suggested that there was a needed successor to the Program Manager role, that is, the Chief Benefits Officer. (Not meaning HR Benefits) That role, or in a larger organization the Strategy Management Office, is to be responsible for maximizing the potential from execution of any strategy. Since organizations fail at an alarming rate, the role would be to identify and remove barriers to success and continuously work to elevate Strategy 2 Execution capabilities. Note, I use Strategy 2 Execution (S2E), when I am referring to strategy to execution as a single integrated process, rather than the sum of its parts.

So why is a Strategy Management Office a good idea?

Strategy and its execution happen everywhere within an organization. But, no one can directly execute a strategy. This is especially true when it is embedded in a thick binder or PowerPoint presentation. A strategy needs to be translated into a set of high-level targeted outcomes. Outcomes achieved equal strategy achieved.

With this approach it is possible to identify the interim outcomes necessary to achieve the next highest one. Accountability can be moved to the local level by identifying coordinators for each interim outcome. It allows people at all levels of the organization to get enrolled in both the strategy and execution of an outcome.

You can think of an outcome and all the interim outcomes necessary to achieve it as an enterprise. We participate in various enterprises across the organization and have different types of roles in each one. You effectively have Strategy / Execution “Offices” for each outcome, over-seeing strategy and execution at a much more localized level. The Office of Strategy Management can assist these ad hoc Strategy / Execution “Offices” when they run into typical organizational road-blocks to success.

I’d claim that there are only a handful of people who go home at night worried about Corporate Performance Management. People all over the organization go home thinking about the performance of their specific outcome. It is the sum total of their execution that creates Corporate Performance. An Office of Strategy Management can help these enterprises be more successful in S2E.

There are some risks in setting up an Office of Strategy Management. You run the risk of having the weight of strategy management shift from the local levels where strategy and execution really connect, to some corner office with a great view, and best color printer in the building. The Office of Strategy Management is a great idea if its focus is on ensuring that S2E is improving execution success on an ever increasing basis.

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