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Executive Interviews: Interview with Charles Spinosa on Strategy Execution
September 2008
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By Dr. Nagendra V Chowdary
Tom Davenport recently argued
that strategy execution has for too
long lurched between two extremes.
One camp, which he calls "strategic
engineering," envisions strategy execution
as an engineering exercise
and views employees as cogs in a
machine well-oiled by computers.
The other extreme, which he labels
"strategic anarchy," encourages executives
simply to get out of the way
of their employees' entrepreneurial
and innovative energies. Neither extreme,
of course, is very useful for
organizations attempting to perform
well in difficult and changing business
environments. What according
to you should be the right approach?
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In most companies that my colleagues
and I have researched or
worked with, the general approach
to strategy execution has been what
Tom Davenport calls "strategic engineering."
The hallmark of this approach
to execution is that it is understood
mostly as implementing
new processes, systems, measures,
and human resources with emphasis
on processes, systems, and measures.
This form of strategic execution
pays little attention to the relationships
a new strategy disrupts. It
does not look at the implicit recurrent
promises of the organization
and how they need to change. It
pays little attention to making the strategy attractive by simplifying processes.
It pays little attention to personal
transformation. Worse, no one promises that the
customers or shareholders will embrace
the new proposition. It gets
implemented but remains wooden.
For instance, one retail bank changed
its strategy from innovative products
to service. The hallmark of the strategic
change was that all accounts were
to be opened in 24 hours or less. The
bank implemented the processes to
do this and announced it. Employees
dutifully adopted the new processes
and opened accounts quickly. But no
one spoke directly to customers about
the change in strategy and the new
promise. No one took the opportunity
to create a new service relationship.
Customers accepted the bank's account
opening schedule with no enthusiasm.
Needless to say, the change
did not produce the result the bank's
senior retail manager sought. On the side of Davenport's "strategic
anarchy," we have seen various
unit managers in investment banking
engage in trying one selling one package
of derivatives after another in, say,
Eastern Europe, or some other emerging
market. As soon as one catches
fire, they try to ramp volume up. But
they get stuck because they do not
have systems that can track the risk or
even produce the products with the
volume increase. By deploying the new agile, opportunistic
strategy-formation process
and by executing it with promise-
basedmanagement, seniormanagers
can create a situation where the
customer-centric, entrepreneurial instincts
of their managers can be honored
and successfully executed. We
advise senior managers to:
- Take responsibility for creating a
highly flexible infrastructure that
can handle both testing and fast
scaling
- Take ownership for the culture
and distinctive values of the company:
they should vigorously reflect
in their actions and in their
aspirations the culture of the company,
and
- Lead a weekly peer assist meeting
of all the empowered managers
where managers brainstorm
breakdowns with senior management
facilitation.
Thus, senior managers track the
offerings that their managers are
making to the customers and
shareholders and do so by tracking
the promises they aremaking to each
and then intervening when
promises become misaligned. Many
senior managers already find
themselves spending more time
aligning the various propositions to
customers and shareholders. That is
surely an emerging trend. So long as
these managers develop structured,
attentive practices for managing
alignment, they can succeed and
stretch the entrepreneurial and
opportunistic capacity of their
businesses. When leaders want to unleash the
opportunistic, entrepreneurial
spirits of their managers, their
cultural responsibility cannot be
overestimated. It is every bit as
important as the infrastructure, so
important that we advise them to go
so far as to compete on culture the
way Southwest Airlines, John
Lewis, Starbucks, Whole Foods
Market, UPS, and Google do.
Customers and shareholders want
the products and services of such
companies in part because they like
associating with members of the
organization. They like talking to
them. They like being seen with
them. They like their values, and
they like their style. When a
company's cultural style attracts
people, recruitment becomes easier.
Leaders of such cultures are not just
aligners, they are chief cultural
experience officers. What is the role of leadership in
making strategy work? What kind of
communication systems, do you
think are vital to successful strategy
execution?
To succeed, any strategy has to
reflect the interests, concerns,
values, sensitivities, and
dispositions of the leader whether
the leader is the business-line leader
or the Chief Executive. No strategy
gets executed successfully unless
managers and staff see it as an
embodiment of the leader's character
and the culture the leader is
advancing. If a leader is introducing
a new strategy he or she should
show his or her personal
transformation and announce the
new ultimate goals for the company.
There are a number of practices
leaders can engage in to
communicate the new strategy. We
advise two in particular. First,
leaders can actively and publicly
through blogs, town-hall meetings,
and webinars ask managers about
their promises and show themselves
aligning those promises to the new
strategy and the culture. When a
chief executive displays his or her
active management, employees take
note.
1.
Business Strategy Case Studies
2. ICMR
Case Collection
3.
Case Study Volumes
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