"The Eight Challenges of Strategic Implementation", Alan Brache, Nov. 21, 2002, 8:45 a.m.

Alan Brache, Partner and Executive Vice-President, Kepner-Tregoe, at "Strategy on the Edge: Charting the course in turbulent times", Strategic Leadership Forum, at the Design Exchange, Toronto, Nov. 21, 2002, 8:45 a.m.

These participant's notes were created in real-time during the meeting, based on the speaker's presentation(s) and comments from the audience. These should not be viewed as official transcripts of the meeting, but only as an interpretation by a single individual. Lapses, grammatical errors, and typing mistakes may not have been corrected. Questions about content should be directed to the originator. These notes have been contributed by David Ing (daviding@systemicbusiness.org) at the IBM Advanced Business Institute ( http://www.ibm.com/abi).

[Introduction]

Alan Brache

• From Missouri, loves the Ozarks
• From Kepner-Tregoe, then moved on to own consulting firm.
• After 11 years, retired, and then got bored.
• Returned to Kepner-Tregoe.
• As a strategic thinker:  "I never think beyond next Thursday"

[Alan Brache]

Clarification, when thinking about his career, not beyond next Thursday, but does think beyond.

Focus not on strategy formation, but on strategy implementation.

Session objectives:

• A framework of strategic implementation components
  • Would be surprised if any of these are new to any one.
  • More of shopping mall approach -- make things more accessible.
• Engage your organization in this dialogue on implementation.
  • Some self-assessment, diagnosis, questioning that enhances the learning.

The enterprise model

• A holistic view of the piece parts of business performance, and strategy and strategy implementation.
• At the center:  the business -- from the enterprise, down to a department.
• Outside the box
  • Customers, and customers' customers.
  • Upstream, to suppliers
  • Competitors
  • Shareholders
  • Resource providers
  • Influencers and stakeholders:  government, economy, society and community (do we provide jobs), and parent corporation (if there is one).
• Focus will be on populating inside the box, in the business

Nine levers of performance.

1. Start from strategy:

• Make complexity as simple as possible
• Two dimensions:  strategy and strategy implementation

2. Within strategy, need to put the right business processes into place

• Not only customer-facing, but also internal.
• This is the cornerstone of strategy formation.

3. Goals and measurements. (below, first of 5 boxes)

• A set of what we are measuring, and what needs to be measuring, e.g. balanced scorecard

4. Human capabilities: (second of 5 boxes)

• Skills and knowledge of people, contributing to processes, contributing to strategy

5. Information or knowledge management: (third of 5 boxes)

• More to it than just computers.
• What do we need to know, and how can we make sure?

6. Organizational structure:  (fourth of boxes in a row)

• Boxes on the org chart, who gets clustered together, and how reports to who.
• A lever that gets pulled too often in North America.
• Most organizational structure changes don't get the intended effects.

7. Culture: (fifth of 5 boxes in a row)

8:  Above strategy, leadership

• An umbrella
• Have learned a lot about what leaders do, as opposed to what managers do.

9.  At bottom, issue resolution:

• They way in which we as individuals and groups, go about solving problems.
• In an uncertain world, don't know what the problems will be, but we can be good problem solvers.

Thus, strategy, plus eight strategy implementation boxes.

• Recently, have been calling implementation execution.

Frustration:  organizations tend to take medication, without diagnosis.

• e.g. balanced scorecard, six sigma.
• They work, if it's the right disease.

Second frustration:  involved a lot in change programs that don't reach their potential.

• Cause:  tend to pull one or two of the levers, and ignore the others of the nine.
• Can't just pull one lever, the world is more complex than that.

Finding a component view of the world

• Human body:  have a brain, digestive system, ..., all components in an engine.
• If I manage the components, I'll be better off:  heart this year, brain next year, ...
• Can do this, but they're all part of a system.
• Need to take a holistic view of how things fit together
• Concern with medical profession, where everyone is a specialist.
  • Issue in the medical profession is side effects
• Only when you bring things together are things useful.

Strategy, off in the corner, for the leader; people taken care of by HR; information by IT, ...

• Who's bringing these pieces together, particularly in strategy implementation.

A strategy formulation and implementation process

Phase 1:  Strategic Intelligence Gathering and Analysis

• About competitors, economies, regulators, customers
• What assumptions are we going to make in the future?

Phase 2:  Strategy formulation

Phase 3:  Planning

Phase 4:  Strategy Implementaiton

Phase 5:  Evergreening

There are a lot more good strategies poorly implemented, than weak strategies weakly implemented.

In each of the nine components, some questions to think and assess who much your organization is aligned.

Strategy:  a framework, a context, about choices.

• Shouldn't be left as vision, values
• Who we are, where are we going:  not about pricing, structure, outsourcing
• Do we have a strategy worth implementing?
  • Specific enough to ...
    • external environment?
      • Do we have a trigger to reopen the strategy if something changes?
    • markets you will and will not serve?
    • services and/or products you will and will not offer?
    • emphases on products and markets?
    • how you will win?  competitive advantage
    • capabilities you need to succeed?
    • financial and non-financial metrics?
      • Including leading and lagging indicators.
  • Need strategy, because we don't have unlimited resources
• Strategy needs to have currency, specificity and consensus.
• Any no answers to the above suggests that you may need to work on or refine.

Business process is central, a cornerstone of strategy implementation.

• Define as the flow of steps.
• Have you identifed the processes, key to strategy, supporting competitive advantage?
  • Priorities.
• Does your strategy implementation include appropriate actions?
• Are processes driving ...
  • information systems (or is the tail wagging the dog)?
  • human capability development?
  • organizational structure?

Goals and measurement

• How to measure performance?
• Companies spend a lot of time setting goals -- putting up a dashboard, but there's no wires behind.
  • What if one of the gauges goes into the red?  What do you do?
• Does your strategy implementation cascade into ...
  • business process goals?
    • The one that is missing the most, as the way business gets done.
    • Should be measured first, with the next levels down as subordinate.
  • department goals?
  • team / individual goals?
• Measurement system with information to the right people at the right time.

Human capabilities

• Meaning skills, knowledge and personal values
• Have you identified the positions key to your strategy?
• Skills, knowledge, values?
• Development of capabilities?

Information / knowledge management:

• Internal and external?
• Using it intelligently?

Organizational structure and roles:

• Supports, or gets in the way of strategy?

Culture:

• Incentivizes results and rewards?

Issue Resolution:

• How are we are resolving ...
  • problems
  • issues
  • ...

Right leadership?

• Towards the ends of strategy.

There are additional types of strategy implementation projects

• Communications projects -- how to drive deeper.
• Acquisitions, mergers
• Market research
• Outsourcing

Questions

Spend some time on issue resolution?

• Set of questions around key challenges that must be faced to execute the strategy successfully.
• Many operational questions:
  • How to fill executive vacancies
• Then towards the future

Challenges of business processes and organizational change?  Business process first, and then organizational change second.

• Business process improvement is an example of organizational change.
• Business process should proceed the organizational change.
• Need to determine work first, and then structure and IT as enablers.
• Challenge:  people drill down to often before the processes are in place.