Strategy-In-Action
Message
Most organizations have a strategy. Many strategies fail. Why? Strategies are seldom implemented properly because a suitable framework is missing – an architecture that reaches from strategy conception to strategy implementation and sustainability.
The topic of strategy implementation, in contrast to strategy design, has been largely absent from the strategy literature. A dichotomy seems to prevail in the field. On the one hand, articles on leadership alone fail to provide the link to strategy implementation. While Ghosal and Bartlett (HBR, November-December 1994) come close to the topic, their thrust is not strategy implementation but the role of top management in managing change. On the other hand, articles on strategy or effectiveness alone ignore the human factor. A valiant exception is Hamel’s “Strategy as Revolution” (HBR, July-August 1996), which offers the right principles, but neither a model nor a process.
What is missing is an approach that can bridge the gulf between strategy formulation and strategy implementation. From our combined experience of 40 years as practitioners in the fields of strategy and leadership development, we have developed a methodology that we call “strategy-in-action.” Linking a dynamic strategic process with leadership and people behavior, strategy-in-action has been called “the most systematic, scientific and comprehensive in its approach”[1] to strategy. We believe that its continuous dialectic of strategy and organizational action outperforms traditional, top-down methodologies significantly.
Implications / “So what?”
Although still dominating our thinking and actions, traditional approaches to strategy and tactics are no longer sufficient in today’s complex global markets. The world has moved on. On the threshold of the 21st century, perhaps for the first time in human history, geopolitical and ideological issues are receding into the background, while human issues are becoming a top priority. Leaders are emerging in all walks of life and in all societies and require a new style of empowerment. We can no longer manage in the mental models of command-and-control that we have inherited from the industrial revolution and from military operations (not even the military can afford to). However, the practice of management has not caught up to these fundamental changes in the global landscape, and has failed to capitalize on them. It seems as though our behaviors were still dictated by old myths – and the opportunity costs are enormous.
It is commonplace to say that successful implementation of strategy comes down to people. Many experts of social change talk about empowerment. But saying it is one thing – facilitating it is quite another. Can human creativity really be unleashed at every level of the organization? Our experience shows that it can be done. By turning the traditional sequence – planning followed by action – on its head, strategy-in-action has helped both top and middle managers in a vast array of both business and non-business organizations to maximize ownership of strategy, transform resistance to change into high flexibility of the entire workforce, and produce productivity breakthroughs.
Audience
The proposed article is relevant to a wide range of executives. Top managers and leaders; organizational strategists and administrators; HR, sales and marketing managers; team leaders; change agents and change catalysts in organizations ranging from the private sector to not-for-profits and governments – they all must know how to unleash the creativity of their people without sacrificing control of their strategy.
Research and examples
We base our findings on case studies in which we were involved, both at AT&T[2] and The Hunger Project in India Bangladesh
The first AT&T case is an unpublished paper by Morton Bahr, President of the Communications Workers of America, and William K. Ketchum, Vice President Labor Relations at AT&T, whose organizations undertook a revolutionary effort in 1992 to cooperate in creating a “Workplace of the Future.”[6] The second AT&T case describes an organizational transformation, involving employee creativity and continuous interplay between strategy and action, at AT&T Power Systems in Dallas US Japan
The Hunger Project, in collaboration with the Planning Commission of India and the Government of Bangladesh, pioneered an innovative approach to strategic planning. The approach aligned all relevant sectors of India Bangladesh
Authority and expertise
Tapas K. Sen, Swiss Consulting Group advisor, recently retired from AT&T as the Human Resources Director for Workplace of the Future & High Performance Center of Excellence. With 25 years of experience in corporate strategy, HR and labor strategy, and culture change, Dr. Sen has first-hand experience of why strategies succeed or fail. tks@swissconsultinggroup.com.
Thomas D. Zweifel, Chief Executive Officer of Swiss Consulting Group (www.swissconsultinggroup.com), is a leadership coach whose work since 1984 has enabled hundreds of people in dozens of organizations worldwide to implement bold strategies. Dr. Zweifel teaches leadership in international and public affairs at Columbia University and is the author of several books on leadership and democracy, most recently Democratic Deficit?, Culture Clash, and Communicate or Die. tdz@swissconsultinggroup.com.
Outline
...three-fourths of the things on which action in war is based
lie hidden in the fog of uncertainty.
Clausewitz
The traditional approach to strategy
Traditional planning is often riddled by multiple shortcomings:
· Traditional planning precedes action and remains static, regardless of the changing entrepreneurial landscape created by that action. Planners expect their fixed blueprint to be realized by the lower echelons. This works well with capital development projects, such as bridges, pipelines, or the canalization for Bombay
· Traditional planning is top-down, reducing people to recipients or objects of the strategy – or both. We should be suspicious of buzzwords like “cascading, buying into…” which reveal that people are the buyers, not the co-authors, of strategy. Top-down planning kills off the most precious asset of organizations in today’s knowledge society: ideas and creativity.
· Traditional planning compartmentalizes organizational functions and ignores both gaps and opportunities. This separation can result in bottlenecks, massive sunk costs, or failed execution.
· Traditional planning results in a linear input/output ratio, producing only limited output and failing to exploit the possibilities of nonlinear outputs.
· Traditional planning focuses on expansion of a heavy, slow-moving, and costly infrastructure. It sacrifices the ability to turn on a dime and to take entrepreneurial leaps.
· Traditional planning attacks isolated problems with a fix-it approach. It fails to uncover the systemic roots of problems and to create comprehensive solutions derived from the active involvement of all stakeholders.
Myths of traditional strategy
Why does strategy fail so often to live up to the high expectations placed on it by strategic planners? We believe things go wrong when planners fall prey to unrecognized and unexamined biases and assumptions – “blind-spots” which filter out critical information and thereby damage the creativity and productivity that lie hidden in organizations. We have observed the following biases as roadblocks to successful strategy implementation.
· Reification bias: “Strategy is a thing.” Planners tend to think that strategy is a blueprint, a book, or a product that is finished and fixed once it is done. But strategy does not deserve the name unless it is evolutionary and highly adaptive.
· Control bias: “I am in charge – whatever I say is implemented.” Overconfident planners may think that the strategic process can be unilaterally controlled from the top. But yes-men around the top often filter out vital information that flows from the bottom up. Even if they don’t, In today’s highly complex environment, control is illusory and actually counter-productive because it stifles local leadership and creativity of front-line people.
· Linearity bias: “Strategy can be broken down into mini-tasks and performed predictably.” Planners believe that strategy is a step-by-step, linear process. It is not. Strategy is like life: complex, unpredictable, and messy. Like whitewater rafting, it requires being in control while being out of control.
· Commodity bias: “People are expendable or exchangeable.” Planners think, perhaps unwittingly, that people are a commodity – “human capital” in the very sense of that term. But, unlike technology, human ingenuity cannot be copied or reproduced. Far from it: if enabled to contribute to the whole, people bring a competitive edge.
· Hard/soft bias: “People issues are soft issues. Only hard issues are critical. We cannot afford to empower people.” But there is nothing soft about human issues. They are among the hardest to deal with – often harder than so-called “hard” issues.
· Business bias: “Business culture is fundamentally different from other organizational cultures.” Planners think that business is unique – that the strategic logic that applies to government bureaucracies or not-for-profit organizations does not apply to business entities. But from the vantage point of strategy and people, business is no different from other social organisms.
· Insularity bias: “Management’s job is to run the business, not to focus on what is happening outside the business.” Planners fail to understand the forces of the environment and their impact on the organization. But organizational success and failure are driven largely by the entrepreneurial ecology around them.
· National bias: “National borders define strategy because our business is mostly domestic.” But national boundaries are increasingly meaningless in the face of global flows of goods, services, capital, people, and information. There is no such thing as a “domestic market”: even street vendors understand that their produce and their customers are subject to global market conditions.
The difference of strategy-in-action
Traditional planning Strategy-in-action
Stable, static Dynamic
Linear Nonlinear
Strategic and functional fit Strategic tension between now and future
People as objects or recipients People as agents and co-authors
Linear Nonlinear
Strategic and functional fit Strategic tension between now and future
People as objects or recipients People as agents and co-authors
Focus on structure Focus on ideas and perceptions
Structural development People-centered development
Cognitive Both cognitive and intuitive
Competitive/adversarial Competitive/self-improving
Either / or Contextual
Mechanical Organic
Separating, isolating Integrative, comprehensive
Either / or Contextual
Mechanical Organic
Separating, isolating Integrative, comprehensive
· Strategy-in-action is dynamic – a continuous, evolutionary process of aligning people on a goal, getting and analyzing results, and connecting it all back to strategy formulation. The outcomes of strategy implementation are fed back into the strategy to galvanize further strategic action.
· This approach to strategy improves organizational vitality and performance. It focuses on both present and future organizational health. Its goal is to optimize the performance of the entire system.
· Strategy-in-action is versatile enough to work in various organizational settings, in business as well as in societal contexts.
People power
· Strategy succeeds only when people make it happen and help the organization build a sustaining competitive advantage. But we have failed to invest in educating people on strategy or in unleashing their creativity. People power has been constrained, discounted, disparaged, dismissed, and ignored. People’s creativity and their ultimate potential is not recognized, let alone harnessed for success.
· This absence of true empowerment, masked by all the right buzzwords of “leadership development,” “human resources” and yes, “empowerment,” has led not only to huge productivity losses in organizations, but also to enormous suffering in many struggling societies. Although the world is changing fast, vast iniquities between rich and poor, between advanced and backward regions persist. The same is true inside organizations, where vast differences in competency and accomplishments separate advanced from stagnating departments.
· Tremendous untapped potential is buried in people. Leaders throughout human history understood how to mobilize this invisible potential. Moses led his people out of Egypt British Empire with the human spirit by engaging countless common people in the strategic intent of national independence.
Strategy-in-action: Critical success factors
· If one single organ does not function properly, our entire body is in harm’s way. Similarly, the success factors below work as a comprehensive package. Our experience teaches us that managers cannot heed only some and discard others. No matter how good a strategy, sustained success is impossible without juggling all success factors at once – much like a master juggler who keeps all the plates in the air.
· Ongoing monitoring of all these success factors is critical in sustaining success. Benchmarks and displays can be used to monitor them ongoingly, much like traditional performance displays, and can serve as early-warning systems for leaders and managers at multiple levels.
· Value. Leaders must always maximize value to customers and end-users, shareholders, employees, and business.
· Catalyst. Leaders must generate change proactively, not merely react to change. Commit to the strategic intent and to playing a catalytic, strategic role, while being flexible about the means and pathways to achieving the strategic intent. Experiment with catalytic projects at low cost and low risk. Use breakdowns as catalysts for breakthroughs. No outcome is final: every outcome becomes a catalyst for further initiatives.
· Action. Leaders must use continuous feedback from operational successes and failures to reshape the strategy. Strategy must be a dialectic evolution of strategy-action-strategy-action-strategy.
· Leadership. Leaders must involve themselves in strategy, develop competencies continuously in all fields and at all levels, and energize the organization toward goal attainment. A change agent (an organizational leader) is in charge and may need to change him- or herself to accomplish the needed change, while a change catalyst (an outside expert or consultant) remains unchanged and therefore objective during the process.
· Partnership. Leaders must maintain open communication and mutual trust between themselves and implementers, between labor and management. Promptly address rumors and fears in the organization.
· People. Leaders must unleash human – and often local or seemingly peripheral – creativity and ingenuity. The structure must serve people’s strategy, not the other way around.
· Ownership. Leaders must enable ownership of, and commitment to, the strategy by all stakeholders. They must ensure continuous input to the strategy both top-down – from senior executives – and bottom-up – from implementers and end-users. For example, imagine a CEO who is expected to control the work done by a 7-level hierarchical organization of some 4,000 employees. Assuming that each individual has to filter out at least one-half of the information he or she reports, the CEO will know less than 2 percent of the information available in the organization at any given time. And who knows whether managers pass the right half of their information to superiors?[7] Unless the CEO creates shared understanding and alignment, he or she will make decisions in the dark. The fact that leaders are accountable for strategy should not be belittled; but all must own it. Strategy is not for strategic planning departments alone.
· Learning. Leaders must take risks and innovate. Celebrate successes, and address failures as learning opportunities. Hold the track record as “so what.” Focus on what is missing, on the obstacles, and on opportunities for integration.
· Framework. Leaders must be sense-makers. Make sense of confusion by constantly adjusting the strategic framework as new circumstances develop. Integrate the parts, and work on the system as a whole.
7 phases of strategy-in-action
Sustaining momentum
Catalytic action
Leadership
Strategic intent
Shared understanding
Fig. 1: Pyramids of strategy-in-action over time.
Shared understanding is essential at all levels.
Phase 1. Shared understanding
· Strategy-in-action begins with a group of typically 15-25 of the right thinkers and leaders – key stakeholders from all sectors of the organization that come together to reach a shared understanding of the current situation and the key elements that the strategy must address.
· Stakeholders include not only top management, but also middle management, selected front-line people, and perhaps board members, representatives of suppliers, shareholders, and customers. The group must be small enough to be intimate and effective, and large enough to include all relevant views. The very people ignored by top management are often the ones who should attend the strategic analysis session.
· Before the first strategy session, a background paper is written, often by an independent expert or a team, to maximize objectivity. The background paper seeks to establish the underpinnings of a common understanding.
· The first session serves to project the results of continuing business-as-usual, and
reveals what is missing, the obstacles, and the opportunities for synergy and convergence.
reveals what is missing, the obstacles, and the opportunities for synergy and convergence.
· Example: In the AT&T Workplace of the Future case, both union and management leaders spent several weeks informally discussing the business environment and competitive landscape, the need for front-line employees to develop more competencies and be empowered to solve customer problems. Business unit managers began to understand that the union was committed not only to its members, but also to AT&T as a competitive business and to the professionalism of the AT&T workforce. The union-management contract was signed only after both parties agreed on all issues and on a shared strategy for addressing these issues.
· Example: When The Hunger Project and the Planning Commission of India co-hosted a national strategy session on ending chronic hunger, every relevant sector was represented in creating a consensus: government, non-governmental organizations (NGOs), business, academia, women’s organizations, village leaders. Mutual accusations raged. When government representatives spoke, they accused NGO-leaders of not seeing the big picture and not listening to the government. When NGO-leaders spoke, they accused the government of living in an ivory tower and ignoring daily reality in the villages. Those of us from The Hunger Project listened in despair, ready to pack our bags and concede failure. Finally, the late industrialist Ramkrishna Bajaj, son of Jamnalal Bajaj, the main financier of Gandhi’s movement to free India India India
· The ground rules are essential. Participants must listen and learn before jumping to conclusions. They must be honest and talk straight. They must appreciate and acknowledge – without depending on appreciation by others. They must trust other participants. They must communicate potently – without judgment or justification or excuses. They must not make decisions until there is alignment. Finally, they must be vigilant of their own beliefs and biases.
· Shared understanding must be continuously created. As strategy is implemented, obstacles and details come up, and it is easy for misunderstanding, conflict and discord to arise. In every phase of the process, shared understanding is needed newly to build the strength and confidence for implementation and continuous evolution.
Phase 2. Strategic intent
· Long-term vision serves as a stabilizer under uncertainty. Vision is defined as a statement of what is possible to achieve, is worth achieving, and represents a new quality of life for all concerned.
· The strategic intent is a magnet, a force field that pulls the present to the future. The strategic intent must be big enough to provide vision, and yet short-term enough for each participant to wrap his or her arms around it and to be energized.
· Example: The strategic intent proposed by Hunger Project experts – to “end chronic, persistent hunger in India Delhi India
· Example: In the Dallas
· The ground rules for mastering the art of the strategic intent are again crucial. Participants must stand in the future accomplishment and work “back from the future,” as it were, rather than working from the present toward the future. They must embrace a new relationship to failure and risk. They must show flexibility instead of being wedded to existing structures. Finally, they must be obsessed with achieving the strategic intent.
Phase 3. Indicators of success
· Indicators of success measure the achievement of the strategic intent. The indicators that are chosen are bound to run people’s lives; therefore they must be chosen diligently.
· Example: At India
· Example: The Dallas
· The ground rules for indicators of success are that, first, they must be designed to force the desired behaviors. For example, how can leadership, risk-taking and innovation, or the unleashing of local creativity, be measured and monitored? The pitfall is that managers will measure the past instead of the achievement of the future. Second, all members of the organization must understand and commit to the indicators and to their targets.
Phase 4. Strategic objectives
· Strategic objectives are typically 3-5 drivers of the strategy. Each strategic objective is a major thrust that provides what is missing for achieving the strategic intent. Strategic objectives afford new vantage points and pathways.
· Strategic objectives are not merely milestones along a linear path to the goal. Each strategic objective stands on its own, yet works synergistically with the other objectives.
· Example: In the Saturn case, the joint union-management committees developed a set of strategic objectives with regard to how Saturn wanted to be recognized as a leader in both quality and customer service. Several training courses were created to facilitate goal attainment.
· Example: In India
· The ground rule for working with strategic objectives is intentionality, defined as the utilization of all our faculties without or after consideration.
Phase 5. Leadership
· The establishment and empowerment of leadership usually takes the longest. Two types of leadership must be distinguished: the leaders and the background empowerment.
· A body of committed leaders is established, consisting of individuals capable of leading by example at all levels of the organization; unyielding about the goal but flexible about the means; willing to tolerate uncertainty and not knowing the answer; and ready to respect divergent viewpoints.
· While the background of empowerment is invisible, its role of empowering the leadership body is as important as that body itself in maintaining the momentum and coherence of the strategy process. The empowerment group must possess the research and administrative capacity to facilitate the action and communication; synthesize divergent opinions into consensus; and be egoless – that is, willing to facilitate the process without getting credit at the expense of the “true owners” of the strategy.
· Example: Several bodies of leadership were essential for the success of the Workplace of the Future project. A Human Resource Board was created to leverage best practices in leadership styles, employee involvement, joint training, self-directed teams, and reward processes worldwide. The HR Board committed itself to address the needs of employees and treat them as “whole persons,” i.e. as members of families, communities, and unions. The first Business Unit/Division Planning Council was created in AT&T’s Data Communications Services business unit in 1992. Six other Councils, representing over 50 percent of AT&T’s unionized employees, quickly succeeded it. A Joint Training Advisory Board developed a “tool box” of training modules to develop AT&T’s future leadership capacity.
· Example: In India
· The ground rules for leadership and empowerment are simple but not necessarily easy to follow. Relationship is everything: the broader the foundation of relationship and partnership, the higher the accomplishment that can be built. Participants must demonstrate utmost integrity. They must check their egos – but not their commitment to collective success – at the door. They must give each other permission for coaching. They must cultivate an enabling environment.
Phase 6. Catalytic actions
· Catalytic actions act as a pressure-cooker to alter the landscape of what is possible. The new landscape of possibility informs – and transforms – the strategic process by providing rapid feedback to the strategy.
· Catalytic actions typically focus on filling gaps in existing programs or services, to eliminate duplication of efforts and to save resources; on achieving convergence of existing initiatives; and on opportunities for synergy to spark further improvements.
· Catalytic actions are of two types. Ground-breaking projects explore innovative ways of achieving the objectives. “Proof-of-principle” projects demonstrate, with sufficient authority, that successful innovations can be up-scaled or can serve as the basis for strategic decisions.
· Example: In India
· Example: Once the plant united behind the Quick JIT team, a front-line team at the Dallas Works empowered to reveal and solve problems, new ideas and requests were coming in so fast that team members had to keep a pad handy to jot them all down. The team built a growing sense at the Works that change was possible and that things could and should improve. By getting the involvement of the employees, the “Quick Jitters” catalyzed breakthroughs in productivity and inventory turns, while the vendor base, the floor space, and the cost of quality were reduced significantly.
· The ground rules for catalytic actions are simple. Participants must pick easy actions first; this builds and strengthens the sense of accomplishment and confidence. They must ask the question, “What could go wrong?” to anticipate and prevent future breakdowns. And they must catalyze rapid-fire successes, usually through bold promises and requests.
Phase 7. Sustaining momentum
· How can success be sustained? In strategy-in-action participants constantly take stock, learn from innovations elsewhere, engage others, and enrich their strategy for the next round of the process.
· Communication is paramount in this phase. Systematically communicating successes – and, yes, failures – is as important as producing those successes and failures is. Visual displays can be used to keep all participants informed.
· Breakdowns can be allies of accomplishment if they are not viewed as problems but as opportunities for innovation and learning. Every breakdown can reveal a pathway to a breakthrough.
· Example: Quick JIT team members at the Dallas Works found they were routinely working ten-hour days, seven days a week. The team met informally each morning to check what each member planned to do, to agree on priorities, and to assign work flexibly. Team members continuously scanned issues, communicated with managers and employees, and at times got the job done when trades people were not available. Their efforts helped the factory to win the coveted Deming Prize.
· Example: Public reviews of the strategy process in India India
· The ground rules for this phase are that participants must focus on extending the process of empowerment – not on merely replicating a solution. What worked yesterday may not work today; what worked there may not work here. They must return people to their vision if the vision is buried in the concerns of the day. They must not be wedded to any structure that is not given by the strategy. And they must remember that in the heat of the action, things are unlikely to ever be balanced. It is this very imbalance that leads to the next creative leap.
Success-Sustainability Matrix
High Added Value
Tree: Mid-term sustainability | Bull: Long-term sustainability |
Flower: Minimal sustainability | Fly: Short-term sustainability |
Low Added Value
The ultimate test of effective strategy lies in the ability it affords to sustain organizational success. To maximize sustainability, an organization must focus on two critical questions: (1) Is the strategy dynamic rather than static? (2) Does the strategy add value?
The Success-Sustainability matrix above shows four organizational types in terms of their success. In the lower left quadrant of minimal sustainability, organizations are “Flowers” that perish quickly because they use a static strategy while adding low value to their goals. Laker Airways is an example. Laker adopted a commodity approach to a service business and competed on price alone. When competitors lowered their fares as well, in addition to their service approach, Laker was soon out of business.
In the lower-right quadrant of short-term sustainability, organizations are “Flies”: they ar short-lived because although their strategy is dynamic, they add relatively low value to their customers. AMD is an example. For years now, AMD has shown responsiveness to market shifts and demands, but compared to Intel, its main competitor, AMD’s strategy has been low price more than adding high value (although most recently company strategy appears to be changing).
In the upper left quadrant of mid-term sustainability, organizations are stable but fixed “Trees” characterized by high-value-added contribution but a fixed, rigid strategy. Digital Equipment Corporation is an example. Digital’s mini-computers added high value to customers, but when the micro-computing revolution started, Digital stayed on its path and was eventually absorbed by Compaq – a micro-computer company.
Organizations that can hold their position in the upper right quadrant of long-term sustainability are powerful “Bulls” well known for their dynamic, nimble, and highly adaptive strategy, combined with their ability to add high value to their customers and shareowners. Intel and Dell are two prominent examples in this category.
Why is strategy-in-action rarely used?
There are several possible reasons why managers are reluctant to harness the power of the strategy-in-action approach:
· We have inherited a mechanistic paradigm from Newton
· Managers may experience fear of empowerment; sharing power or sensitive information with others may seem tantamount to chaos and anarchy. One of our clients once asked: “So you want me to empower my people? What if they become more powerful than me? Why should I give up power to empower them?” If executives think of empowerment as control, they will experience loss of power through empowerment of others. If they think of empowerment as the power to perform, then those who are empowered will feed power back to them – in the form of profits and performance.
· Let us admit it: whatever the ultimate benefits – working with others is a pain. If managers could produce peak results alone, by simply pushing keys at their computers, most of them would gladly do so. The only reason for teaming up in organizations is the opportunity to produce outcomes that lie far beyond the scope of any individual alone. And in today’s highly competitive world, survival demands such breakthrough outcomes.
Strategy-in-Action Matrix
Unleashing Human
Creativity
Warm: Nice, non-competitive | Steam: Innovative, competitive |
Ice: Bureaucratic, stagnant | Cold: Competitive, burnout |
Stifled
creativity
The success of the strategy-in-action model depends on the interaction between two critical dimensions: (1) To what extent is the strategy dynamic (the same question as in the Success-Sustainability matrix earlier)? And (2) To what extent is human creativity unleashed at all levels of the organization? The Strategy-in-Action matrix above shows four basic types of organizations derived from these two dimensions. In the lower left quadrant (“Ice”), organizations are frozen, functioning with static strategies and virtually without emphasis on human creativity. Companies involved in major capital construction projects to build roads, bridges or pipelines, and many government agencies fall into this category.
The lower right quadrant (“Cold”) represents organizations that demonstrate dynamism and sensitivity to market changes, but suffer from a disconnect between strategy and people creativity. Many of the best employees in this cold environment burn out or leave the organization. Ford Motor Co. went through this stage for a number of years, prior to introducing its Taurus model, which integrated human ingenuity and strategy formulation.
In the upper left quadrant (“Warm”), organizations encourage human creativity at all levels but remain fixated on static strategies. In the early 1980s, many of the then Bell System companies introduced a people empowerment process called Quality of Working Life (QWL). While QWL encouraged and even inspired many workers to innovate their practices, workers lacked an opportunity to provide input to their organization’s strategy. As a result, while working conditions improved, the Bell
Finally, in the upper right corner (“Steam”), organizations constantly create the institutional capacity to enable people creativity and learning from the experience of strategy implementation, and to feed that information back into strategy. Although we have yet to see a company keep its position in the upper right quadrant over time, business organizations such as General Electric, Intel, AT&T’s Dallas Works (now Lucent) and Saturn; The Hunger Project or Amnesty International in the not-for-profit sector; and the government of Namibia in the public sector, have laid claim to the quadrant of innovation-cum-competitiveness at one time or another.
Tests of superior strategy implementation
Matching the quality of strategy design with that of strategy implementation presents a formidable challenge to most organizations. Here are some questions that managers can ask as they mine for possible gaps in strategy implementation:
· Can employees decide quickly, and on their own, which opportunities lie not directly on the purpose-line of the organization’s strategic mission?
· Do managers know what threats might lead to the failure of the organization?
· Is vision present in day-to-day action?
· Do people experience the future as a personal, compelling opportunity?
· Can top and middle managers readily remember the organization’s status in all key indicators of success?
· Do all employees watch the same indicators as their superiors do?
· Are project teams and divisions transparent (rather than ridden by turf wars and power plays) so that all one sees is their actions and results?
· Do all participants at meetings offer ideas? Are innovative ideas supported?
· Are employees free of excessive paperwork cluttering the path of progress?
· Do promises and requests (rather than excuses, explanations or complaints) dominate discussions?
Added value of ‘Strategy-in-Action’
As breakthroughs in technology and communications continue to make the world a global village, proximity to success builds intensive competition and rising expectations in all societies. To deal with these challenges, leaders of organizations need dynamic and nimble learning systems that help them meet the rising demands of customers, shareowners and employees. Based on our experience, we believe that the strategy-in-action methodology provides the guidelines leaders need to manage their strategic goals and objectives successfully.
Because strategy-in-action works on people’s competence, confidence and commitment as the implementers of strategy, it adds value to the organization in several important ways.
· First, it leads to a well-informed learning organization where every member of the organization shares a common understanding of the strategic intent and goals of the organization.
· Second, implementers continuously share their learning with the strategy formulators, which leads to real-time improvements of the strategy based on first-hand knowledge of market or environmental conditions. The more often the implementers have a chance to do this, the more confident they become in carrying out the essential imperatives of the strategic goals of the organization.
· Third, the success of implementation often leads to other entrepreneurial activities within the organization. For example, because of their success in managing solid waste in Bangladesh
In sum, strategy-in-action requires investment, yes – but those who invest get a great return on investment. The so-called “soft” human factor has tremendous impact on the so-called “hard” bottom line:
· Instead of a lengthy, expensive strategy session that stifles action, catalytic actions produce both immediate and lasting results, and allow the immediate test of strategy against reality.
· Strategic criteria filter out unnecessary action. Wrong strategies are naturally eliminated, and much money is saved.
· Alignment permits ownership of difficult choices that must be made. Decisions are based on broad consensus. Even those who must sacrifice are likely to stay in the game.
· Full communication and co-creation deepens the kind of partnership that makes outstanding accomplishment possible. Shared, intrinsic commitment generates greater results than extrinsic rewards or threats.
· Vision brings clarity and meaning to day-to-day activities, and deepens employee loyalty.
· Synergy, convergence, and focus eliminate redundancies and enable big time savings – not to speak of nerves, people, and money.
· Ownership enhances individual initiative and an entrepreneurial spirit throughout the organization. The resulting leverage can create miracle output-over-input ratios of 100:1 or more.
Introduction
The conventional approach to planning, with its rigid time frames, its breakdown
of planning tasks into sectors and regions, and its centralized and technocratic perspective on plan formulation and implementation
is most unlikely to be effective in an increasingly turbulent environment.
Francisco R. Sagasti[8]
Most corporations have a strategy. Many strategies fail. Why? Strategies are seldom implemented properly because a suitable framework is missing – an architecture that reaches from strategy conception to strategy implementation and sustainability.
Whenever we walk into an organization and ask employees what the strategic intent is, all too often we hear the answer: “Uh… Let me just look in the files for a minute…” If employees or, worse, managers cannot readily and compellingly convey their organization’s strategy, we can be reasonably sure that strategy implementation is insufficient or failing altogether.
It is sobering to see how frequently brilliant – and expensive – organizational strategies end up either in the drawer of the executive suite or, worse, in the bin, often simply for two reasons. First, people and their most precious asset, human ingenuity, were ignored. Second, the strategy was too inflexible to adapt to a constantly changing entrepreneurial landscape.
Many executives do not clearly understand that strategy design is not synonymous with strategy implementation. They conflate the decision on a strategy or policy with its implementation, and this conflation has deleterious consequences for organizational health and performance.
What is missing is an approach that can bridge the gulf between strategy formulation and strategy implementation. From our combined experience of 40 years as practitioners in the fields of strategy and leadership development, we have developed a methodology that we call “strategy-in-action.” Linking a dynamic strategic process with leadership and people behavior, strategy-in-action and its continuous dialectic of strategy and organizational action outperform traditional, top-down methodologies significantly.
…
[1] Kishore Jobalia, Past Rotary International District Governor, Bombay , India
[2] Susan Rosegrant and Phillip Holland, “AT&T: The Dallas Harvard Business School
[3] The Hunger Project, “Planning-in-Action: An innovative approach to human development.” New York
[4] Saul Rubenstein, Michael Bennett and Thomas Kochan, “The Saturn Partnership: Co-Management and the Re-invention of the Local Union ,” Work in America Institute, Policy Study, Part II, 1994.
[5] Marshall H. Campbell, “The Magma Copper Experience: A New Future for Union-Management Relations,” Work in America Institute, Policy Study, Part II, 1994.
[6] Morton Bahr and William K. Ketchum, “Workplace of the Future.” Unpublished Manuscript 1995.
[7] S.L. Sutherland, “Independent review and political accountability: should democracy be on autopilot?” Optimum: The Journal of Public Sector Management, vol. 24-2, Autumn 1993. 27.
[8] Francisco R. Sagasti, “National Development Planning in Turbulent Times: New Approaches and Criteria for Institutional Design,” World Development, vol.16, no.4, 1988. 438.
No comments:
Post a Comment