StratEx by Lyonsdown

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November 2013 | business-reporter.co.uk

Ten years on…

strategy execution

Australia 17 England 20 …now that’s the way to execute a strategy How Clive Woodward turned to business to land the biggest prize in world rugby Pages 6-7

Winning ways: Sir Clive Woodward hoists the William Webb Ellis trophy in 2003

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Business Reporter · November 2013

an independent report from lyonsdown, distributed with the sunday telegraph

Strategy execution

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Opening shots René Carayol Most business leaders in the C-Suite still focus on setting a strategy that is elegant, clear and sophisticated, based upon strong and solid analysis of historical data and building sustainable processes that will deliver the long-term business success necessary. It’s delivered with flawless logic and appears straightforward, but it’s at arm’s length from the rigours of the day-to-day business. Senior executives tend to buy into the plan, despite its academic nature, confident that its clarity will maintain the business’s strategic advantage. So far so good. But now we get into the ugly business of execution. This is usually delegated deep down into the organisation and perhaps a little too far down the hierarchy. Things usually start to become a little hairy as priorities clash, projects compete for resources and timescales start to slip. Decisions are then delayed and eventually, and I do mean eventually, the bad news is escalated back into the C-Suite, and the whole process starts again. A recent survey by The Economist Intelligence Unit (EIU) brings into focus the growing chasm between st r ateg y for mu lat ion a nd it s day-to - day implementation. While 88 per cent of survey respondents say executing strategic initiatives successfully will be essential for their organisation’s competitiveness, 61 per cent also acknowledge that their firms struggle to bridge the gap between the strategy and its execution. Instructively, in the last three years an average of just 56 per cent of strategic initiatives have been successfully delivered. Unsurprisingly, companies poorly aligned with strategy post weaker financial results than their peers. The real issue here is that strategy and execution are

Inspirational battle cries of the field commanders still need to be heard many worlds apart, and the elegance of the strategy bears little resemblance to the ugliness of the execution. When things start to fall apart we get into the predictable finger pointing and everything seizes up. In these inevitable situations the C-Suite, again exemplifying their remoteness, suggest better process solutions, better project management, much tighter operating policies and procedures and clearer rules of engagement. It sounds ideal, but is hardly the realism necessary at ground level, we’ve all been there before. This rarely resolves the real-time implementation issues that occur when situations become stressed, stretched and highly charged. A tougher and much more powerful way forward is to focus on the culture, which is obviously standing in the way of the fusing together of strategy and execution. At this stage, it is imperative to remove the limitations of hierarchy and status, and get out onto the floor where the execution actually happens, thus ensuring there are no second-class citizens and pulling everyone together. What’s really required are those pragmatic leaders,

who are close to their people and are gifted in inspiring and empowering teams to deliver – especially against the odds. Far too many of t hose in t he C-Suite are there because they are intelligent, analytical, process-driven and rational – but the world of execution requires those with ‘dirt under the fingernails’, with a view from the ground that can be very different from the strategic view up on high in the C-Suite. There is no universal solution for making strategy actually happen, but the EIU survey highlights that much more focused involvement from the C-suite, much better and more honest feedback mechanisms and better leadership resourcing are usually the main factors influencing success. No strategy, however elegant, ever survives the reality of execution without the intervention of the battle-hardened field commanders with their inspirational battle cries.

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Business Reporter · November 2013

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Strategy execution

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Business strategy must dare to win Strategies, like many things, will change with the circumstances. In business this is always the case. A chief executive leading a company in a thriving economy is more likely to push new ideas than someone facing a major recession. Years into a downturn which only now shows signs of abating, bosses would be forgiven for playing it safe. And even as the economy begins to look healthier, persuading them to take a more ambitious approach could be difficult. Richard Brown, managing partner at Cognosis, a business strategy consultancy, believes that while many firms have taken

sensible strategies in hard times, they now need to show more courage and do what it takes to achieve growth. “Strategy has become a bit more safe and, understandably, more risk-averse,” he says. “We detect a more short-term focus and a shift to more of an internal focus over the last couple of years. “There has been a focus on innovation and making operations more efficient and effective. But this isn’t radical stuff.” He argues that, though CEOs have been prudent, they need to become more outwardlooking and focus on innovating and engaging better with customers.

He says: “The strategy agenda needs to be much more accommodating and driven by innovation. Companies have to put in place a new series of initiatives to better understand their customers and consumers. “That implies a raising of the game in the marketing area and the acquisition of new skills, particularly in using social media. “The influence of IT people should also increase, and social media can bring you huge sets of data which, if analysed in the right way, can gain a new level of customers. “There’s a lot of talk about big data in the management press, but my impression is that its time is only just now coming.”

But breaking a cautious attitude reinforced by years of difficulty may be tough. Brown says: “As we moved into that downturn, there was a call for leadership. There has been a lot of blather in the media about the opportunity for changing leadership patterns. But we see the dominant pattern has been to introvert to safer, more risk-averse strategies. You have got to ask – have leaders lost their nerve? “But there may be a new generation of leaders. And as times go by we expect to become increasingly collaborative – so the few executives running a company will have less control.”

Technology is in danger of widening the employeremployee gap, claims expert By Dave Baxter

Above: Bath University’s School of Management Right: Professor Veronica Hope Hailey

Bosses should resist the temptation to hide behind technology when they have bad news to share, an expert has warned. Professor Veronica Hope Hailey, the dean of Bath U n i v e r s i t y ’s S c h o o l o f Management, says managing and leading in organisations based across several locations has been made possible by innovations such as podcasts and teleconferencing. But she argues bad news, about redundancies or other organisational changes, needs to be given in person. “You can keep people up to date with podcasts and web-based technology. That can do fantastic things, and that’s great,” she says. “If you have offices in Dallas but 90 per cent of your work force is in the UK, that technology is much more

important. Good news can come over podcasts and conference calls. “But if it’s negative, then you want to have it from leaders who look us in the eyes, face to face. That’s where the middle manager is really important.” Technology has certainly revolutionised how companies interact. Employees can use their own devices in the office and use these to work from home. At the same time, messaging services and online communications mean people can stay in touch across various locations. But Professor Hope Hailey says those in charge need to remember the value of human contact, if at all possible. And she a r g ue s t h at , a s a n organisation becomes larger, it is more important to have middle managers who can prov ide t his contact for employees. She says: “If you are in an organisation where you can access senior management, that makes it very easy. You see them in the corridor, and you

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might have far less need for middle managers. “But if you are geographically distanced like banks or multinational companies, your senior management can’t be as visible and they can’t get round the different levels as easily. “Then your middle managers are very important.” She says some organisations are easy to keep together. “If you take us as a university, we are a campus university,”

she says. “We have our senior team nearby, and I will see the vice chancellor and other senior managers on a daily basis, so that I know them when they come out with a new strategy. “They can easily hold town hall meetings regularly for faculties. It’s not difficult to keep in touch. “But when the situation is different, the role of middle managers and technology can become much more significant.”

Business Reporter · November 2013

Strategy execution

ExpertInsight

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Communication is the most vital factor in delivering change successfully INDUSTRY VIEW

interested audience groups and then tailoring the timing and content of the message to each target group. Poor communications will lead to mistrust and lack of cohesion in delivery, whereas strong communication should help enforce the change to be incorporated quickly and effectively.

Why is change management important? Recent volatile economic conditions have meant businesses have had to adapt their strategies in order to survive, which can mean significant change. In a downturn, the businesses hit hardest are those not willing or able to adapt. In order to survive, firms have had to modify and in some cases completely review their business strategy. Successful change management begins with recognising the need for change, ensuring the direction of change is in line with emerging market trends and being willing to let go of what used to work in the past. Cries of “But this is the way we have always done it!” will not help the business survive, let alone grow.

What areas of change management should be focused on? Once the direction of change has been agreed, the key to successful change management is to act quickly. The change in strategy needs to be decisive, ensuring the impact on the entire business is well understood. Staff need to understand why the change is required, what is going to happen, how that is going to be phased in and to what timescales. If the business takes too long to agree organisational changes and

ExpertInsight

Some C-level execs want to focus on strategy and don’t believe they are responsible for execution. Are they?

hence prolonging uncertainty in job security then many of the best staff will leave. Strong delivery management is essential, especially when change involves complex technological improvements or has a significant impact on the business operating model. Robust management throughout the end-to-end delivery from study, design, build and test to implementation is a must. Without solid programme management there is a risk of gaps in the study and design, overall delivery could be delayed or there could be material compromises on quality, not to mention delivering to budget. That said, the single most important factor to delivering change successfully is communication. A clear and consistent communication strategy should begin by identifying the impacted and

There are C-level executives who are extremely successful with a pure strategy focus, however their success is dependent on the wider team being able to interpret and execute their ideas. Successful businesses ensure they have a team of C-level executives with complementary skills, from idea generation through to execution and management insight. All successful executives know their areas of expertise and play to their strengths. They know successful delivery hinges on a good management team. C-level executive sponsors of change are absolutely accountable for delivery, though not directly responsible for execution. Their focus should be ensuring there is sufficient challenge on the design, costs and quality of delivery and steer the work in a decisive and timely manner. Heidi Kharbhih (left) is a management consultant at Optimise Your Business 0845 519 3940 www.optimiseyourbusiness.com

Strategy deployment is the catalyst for effective execution Monthly reviews showed phenomenal progress INDUSTRY VIEW

trategy deployment enables leaders to prioritise actions for breakthrough improvement. It is an iterative approach that enables tight alignment between corporate strategy and breakthrough objectives to transform the enterprise to unparalleled performance levels. Quantifiable benefits include: • Tight focus around critical business imperatives • Ensuring that continuous improvement is tied to strategy and impacts bottom-line results • Ownership and accountability for removing the causes of problems Catalyst Consulting works closely with leadership

teams, functional leaders and project teams to cascade strategic objectives, create cultural alignment and enhance employee engagement using this disciplined yet flexible approach. Catalyst customer Brendan McNulty (inset), vice president and general manager for UK and Ireland, Johnson Controls, Building Efficiency, talks about his experiences.

What was your goal in implementing strategy deployment (SD)? To identify new ways to continue Johnson Controls’ leadership in delivering building technologies and services by setting priorities, focus energies and resources, strengthen operations and engaging our employees towards achieving common goals.

What were the problems to be overcome? The business had seen continuous change and as such our employee engagement and customer focus needed improvement. In addition, roles and responsibilities were unclear and we lacked visibility of the talent within

the organisation, all of which created challenges with business performance.

What did you do next? During the first year we focused on fundamentals. We complemented our existing talent with fresh talent at the leadership level and focused on the specific challenges of each business. In year two, having built the foundations, we focused on growth, we implemented a robust process that enabled us to drive strategy bottom-up within the organisation – a change from the previous top-down approach.

How did you approach strategy deployment? SD workshops were initiated at the European level and breakthroughs were defined and aligned the leadership team. A further SD workshop was held with subject matter experts and their programme teams across the businesses. The training provided a practical approach, which enabled people to think differently about the business.

What benefits have been achieved from SD? We focused on organisation, roles and

responsibilities and metrics and stabilised the business in year one with an 8 per cent improvement in customer retention rates and significant improvement in the business profitability, with utilisation also improving by 8 per cent. Our second year saw top-line growth increase by 5 per cent and the bottom line by 30 per cent. We also saw a 7 per cent improvement in our employee engagement scores.

What lessons have you learned in implementing SD? SD is not easy and initially teams struggled to think in a logical processorientated way. Traditionally, we worked on many strategic initiatives with low levels of traction; concentrating on doing a few things well proved beneficial. Monthly reviews showed the phenomenal progress we made. The culture had changed, with team members demonstrating passion, creativity and the will to succeed. That shift-change in the engagement of people sold me on the SD framework and process. Call +44 (0) 845 345 2282 or join our SD webinar at 2pm on November 15 to learn more www.catalyst-biz.com/sd

Business Reporter · November 2013

an independent report from lyonsdown, distributed with the sunday telegraph

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Hapless David Brents or unsung office saviours? If expanding organisations want to get things done, middle managers ought to be listened to… By Dave Baxter Bosses must recognise the “pivotal leadership role” played by middle managers if they want to run large organisations well, an expert has claimed. Professor Veronica Hope Hailey, dean of Bath University’s School of Management, says middle managers play a crucial role in implementing strategies, but senior staff members are failing to bring them on-side. “My research would suggest that middle managers are more important than they have ever been,” she says. “As organisations grow through mergers and acquisitions and develop more size or geographical distance on a national or international basis, leadership has passed down to these middle managers. “I think senior managers’ mistake is not appreciating the pivotal leadership role that middle managers play in large locations or geographically distanced organisations. Senior managers can delude themselves that all staff have huge levels of commitment to them. In large organisations, levels of trust have declined, in part because of the financial crisis. But middle managers are still trusted. “There’s no doubt that senior managers are responsible for strategy formulation. But middle managers The David Brent image of middle management is outdated and unhelpful

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The

middle

By Dave Baxter

d n u o Gr are critical to getting that strategy implemented.” She argues that, as middle managers are important for implementing plans, they need to be consulted on this implementation as a way of getting their support. “What we see is senior managers failing to consult and involve middle managers in how the strategy should be implemented,” she says. “Because of this, some middle managers are saying, ‘If I had my way I wouldn’t be doing that.’ They say that because they have worked somewhere for 20 or 30 years, and nobody has asked them what they think. But if you involve them in how the strategy is implemented, they are expected to respect that plan and fall in line, rather than jumping into the trenches.” Professor David Buchanan, who specialises in organisational behaviour at Cranfield University School of Management, argues that middle managers need an “enabling environment” involving up-to-date IT systems, adequate resources, good communication with senior staff and a

level of autonomy in their jobs. But he also thinks they are suffering from an image problem. “There is a book from the 1950s called The Organization Man, and that’s where the stereotype [of middle managers] comes from,” he says. “That image has survived. You have the idea of characters like David Brent from The Office, and of excessive bureaucracy. “But in the NHS, for example, many of the middle managers are nurses or doctors, so they play a hybrid role. So when our political masters say ‘Let’s cut managers’ it’s not that simple. That would apply in a lot of professional organisations, such as IT, research development and architecture.” Mohini Venkatesh, senior director for public policy at the National Council for Behavioral Health, an American organisation which runs management training programmes for healthcare workers, says more could be done to

Strategy execution recognise good managers. She says: “There is the idea that middle managers are stuck on the professional ladder and want to move into senior management. “But when we speak to middle management, there are people who want to excel at that for the entirety of their career. “A good manager is somebody who has the capacity to be flexible and have an even temperament and learn how to advise and champion the things they are passionate about. “In many ways, middle managers aren’t appreciated for how important they are in an organisation and the unique position they are in. They have the great benefit of exposure to everyone above and below them. “But a lot of the time, they don’t have control over what they do.” Others believe that removing the hierarchy associated with management could empower workers. At Haier, the Chinese fridge-maker which has become an international success, a workforce which formerly consisted of departments has been broken up into small, autonomous teams. The idea behind this is to put workers in more direct contact with clients, and to make them responsible for achieving the company’s goals. Ilya Pozin, founder and CEO of Open Me, a social greeting and gifts firm, split his staff into small, self-reliant teams around two and a half years ago to give employees “ownership” of their work, and says it has paid off. “The problem with answering to a manager is it’s all about pleasing people rather than a goal,” he says. “We used to have project managers who would tell people what to do, but if employees had any feedback they would keep their mouths shut because they had been told to do it. “In small teams, they are working directly with the clients and focused on a goal. I’m not trying to be wishy washy – this is a real thing. Our improvements in terms of productivity and client satisfaction have been insane.” But Pozin admits that some companies may find the transition from a traditional hierarchy to small teams harder to deal with. He says: “I think in a major company it’s hard to go backwards to this. To change is very difficult. When we changed, we lost probably 25 per cent of the staff.” From managers to team members, senior staff will continue to rely on others to implement their plans. They might need to forget about David Brent.

Upgrading your IT systems the smart way By Matt Smith How does a business go about designing and implementing a plan to transform its IT infrastructure? For Simon Clayden, chief business architect at AXA, the key was in identifying what was working well and what could be upgraded. “I conducted interviews with key people across the business, and we spoke to customers and got their feedback on dealing with AXA,” he says. “So for each stage of the journey we could see what we were good at and what customers said we needed to improve.” Understanding this was key in ensuring changes were focused on improving the customer proposition. Once his team had a list of changes to make, the next step in the plan involved a prioritisation process to decide which ideas should be implemented first. “Opportunities to improve sales went right to the top of the list. We looked at what our competitors were doing and what we could do better,” Clayden says. “Then we brainstormed for ideas for these solutions. All we had to do was focus on the problems for us, generate lots of ideas, and see which ones we could take forward.” He says that while some businesses discover “shiny new software” and try to ma ke it f it w it h t heir operations, AXA worked on practical solutions to existing problems. Integral to the realisation of Clayden’s strategy was the philosophy that IT departments should work alongside the rest of the business. “Traditionally, the business sits back and says, ‘IT, we have an idea – go away and implement it,’” he says. “We are finding that if you engage the business and work alongside them then you get something that better fits the business, gets completed faster, and brings the cost down.” Hear Simon Clayden speak and find out how your business can build and implement an effective digitalisation strategy at IT Transformation 2013. www. it-transformation.co.uk

Business Reporter · November 2013

an independent report from lyonsdown, distributed with the sunday telegraph

Strategy execution

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How Sir Clive Woodward the World Cup his main Nothing was left to chance as boardroom thinking came onto the rugby pitch. By Brendan Gallagher

EN years ago this month England stunned a nation by winning the Rugby World Cup in Australia. Of course blood, sweat and tears played their part, but innovative business techniques and thinking lay behind England’s success. And the man behind that approach was head coach Sir Clive Woodward. Woodward set his stall out from day one when he arrived unannounced at Twickenham in September 1997 and asked to be shown to his office. An embarrassed silence ensued; there was no desk allocated, let alone an office. Remaining polite, Woodward insisted he would need his own office, computer, phone and a secretary and, until that was forthcoming, he would work from the reception area. He then hung up his jacket, unlocked his briefcase and started zapping his mobile phone. Woodward had established his own company – Sales, Finance and Leasing – from his garage s o t h i s w a s n’ t ne w te r r itor y. Unsurprisingly, an office of sorts was found for him later that day. Woodward had a degree in sports science from Loughborough University and had coached Henley and London Irish, but his background was as much business-based as rugby. For ten years, including the period when he played for England, he was a salesman and team leader at Xerox, both in Britain and Australia, and then when he returned from Australia he set up SFL. His methods and daily routine belonged to the business world – not sport – and he knew that being good simply wasn’t enough. Unless you are the best in the business, no return can be guaranteed. “It’s no secret that business has always had a fascination with sport but, having been involved with both business and rugby in England at the highest level, my mindset was totally different,” explained Woodward in his book Winning. “I felt sport should have a huge fascination with business. When I started as England coach I was determined to run the England team like a business. In finding out what would work best for England rugby I brought together hundreds of business concepts in a totally new way. “Xerox had mastered the art of bringing competition into the workplace. Walk into any of their offices and the first thing you would see is a large league table with the sales rankings of every sales person in the company. Your name was there and your results posted daily. You

always knew how you were performing. The environment surrounding international rugby was tame by comparison.” Woodward was particularly impressed with a presentation by businessman Humphrey Walters, who ran training company MaST International. Wa lter s ta l ked about h is experience of helping one crew of 11 yachts entered in the BT Global challenge – an event in which identical yachts were raced by amateur crews under the guidance of a professional skipper. With none of the 11 teams having any advantage in terms of equipment, technology and manpower, Walters argued that the winning team would be that crew which executed 100 tasks and

processes 1 per cent better than any of the others. T h i s c h i me d loud ly w it h Woodward as a basic philosophy, but the difference was that he was allowed to recruit additional expert help. Having won over RFU CEO Francis Baron, Woodward’s budget was increased so he could bring in a succession of specialist coaches or experts – rugby-based, medical, conditioning and nutritional – to finetune every conceivable aspect of the process. Amid much scepticism he even hired a sight coach, Sherylle Calder, who runs a company called EyeGym, in an attempt to

improve the visual awareness and co-ordination skills of England’s players. A QC, Richard Smith, was also hired to oversee the increasing number of disciplinary hearings and to analyse tournament rules closely. Walters ran a number of business workshops for Woodward, with the coaches and players. First, the exact goal had to be identified and, secondly, the ground rules for how management communicated with each other and the team a mong t he m s e lve s. T h i rd c a me t he identification of an individual’s precise role and the output expected from them and, finally, the question of reward or motivation. If you wanted a much-improved level of performance from a workforce that you only controlled for 50-60 days of the year (the English clubs were their primary employers), there had to be valid reasons apart from patriotism for an England player to commit totally. The money for massive wage hikes did not exist.

Business Reporter · November 2013

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Strategy execution

Ensuring optimum results

made winning business…

Woodward’s answer was to treat those involved like highly salaried executives and surround them with a culture of excellence. He took England away from their traditional but dated Bisham Abbey base and installed them in the five-star comfort of Pennyhill Park Hotel in Surrey for training. He abolished room-sharing and all travel was to be business class. England were on business, treat them accordingly. He asked a personal business contact, Michael Spiro at Elonex Computers, to supply 60 laptops for the entire squad and staff and to provide suitable training so that communication could never be an issue, or an excuse. A rugby pitch was installed at Pennyhill and, as the World Cup approached and with his enlarged budget nearly exhausted, Woodward, a great networker, persuaded the hotel owner Danny Pecorelli to help fund an upgrade to make it international standard. Equally, Pecorelli was prevailed upon to lay a temporary concrete base

Above: The England rugby team celebrate their historic victory; Inset: Jonny Wilkinson, who kicked the winning drop goal; Top right: Sir Clive during the 2012 Olympic Games

close to the pitch after which Woodward did a deal with GL Events’ Owen Brown to erect a temporary pavilion, which was transformed into a fully equipped gym for the duration of the summer. To help achieve the massive change in mindset needed to implement all this, Woodward devised what he called 6F thinking, the willingness to look at every aspect of the business of winning rugby matches afresh. To illustrate this Woodward always quotes the following test. Ask any group to briefly examine the following statement and to say how many times the letter f appears. FINISHED FILES ARE THE RESULT OF MANY YEARS OF SCIENTIFIC STUDY COMBINED WITH THE EXPERIENCE OF MANY YEARS When he did this with the England squad former carpenter Jason Leonard was the only

INDUSTRY VIEW

player to come up with the correct answer of six – everybody else made it three. The moral, of course, being, don’t accept the perceived wisdom of what everybody else sees. From that moment onward, 6F thinking became an internal mantra every time England looked at either game tactics or the logistics of running the squad. The result of this and much more were all there to see on November 22, 2003, never more so than in the final tense seconds of extra time when England executed supremely well to work Jonny Wilkinson into a position to drop kick the winning goal. TCUP – Thinking Correctly Under Pressure – had been another business mantra for the years leading up that triumph. And now, when the deal needed to be sealed, that’s exactly what England did. By design, not by accident. Winning by Clive Woodward and Fletcher Potanin, is published by Hodder and Stoughton

Senior-level succession planning is an essential element in ensuring that an organisation remains stable and successful over time. So it is surprising that many boards devote so little attention to this process, often delaying the succession-planning dialogue until it is too late and unforeseen circumstances force a rushed or unplanned transition at the top. There are many reasons why boards delay or overlook this process, but none justify the failure to act. Directors may be intimidated by their CEOs or may fear the complexity of the succession-planning process. In other cases, boards fail to appreciate the risks of being ill-prepared for unexpected leadership transitions or forced to choose from limited options. According to Deirdre Kenny, London-based managing partner for global search firm CTPartners, a far better approach is to put in place a timely, thoughtful and comprehensive CEO succession-planning process which involves a best-in-class field of internal and external candidates. “This needs full alignment between the board, the current CEO and the chief HR officer regarding the future CEO success drivers. Once the right potential candidates have been identified, he or she can be prepared for the future role,” Kenny advises. Board discussions should focus on major sources of long-term growth and value-creation, optimal timing for the next leadership transition and meaningful criteria with which to evaluate potential candidates and define future CEO success. As such, the objective should be to craft and orchestrate a succession plan that is custom-built, results-oriented and transparent. Only the right discipline and preparation will produced the optimum result. 020 7901 0400 www.ctnet.com

Business Reporter · November 2013

an independent report from lyonsdown, distributed with the sunday telegraph

Strategy execution

Strategy is social INDUSTRY VIEW Put simply, strategy development is about groups of people reaching quality decisions in such a way that they can, and will, act on those decisions to deliver valuable and lasting results. The text books on strategy nearly always focus on the models and techniques for analysis – for assessing the market, for understanding competitive position, for segmenting, for identifying synergies, and so on. And yet, while analysis is necessary to underpin the choices that must be made, in our experience the hardest part of strategy is to achieve ownership – to ensure that the key players who need to execute the strategy are squarely behind the proposals. Sometimes your strategic choices may have significant personal implications – an executive may need to change their role, or to relocate. Sometimes they may just involve a subtle refocusing of effort or shift in behaviours. But whatever the extent of the change, to make it actually happen requires ownership of the ideas – an understanding not just of the conclusion but of how it was reached. Otherwise, as we all know, and have probably experienced, the execution will fail because of the power of “not invented here” syndrome. So if you want to develop a good strategy that will be successfully executed, think first about your people – who needs to be involved and how – and only second about the analysis required. Charles Scott (below) is a partner at The Berkeley Partnership 020 7643 5800 www.berkeleypartnership.com

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Messing about on the river ...but not just any river. And when academic Mark de Rond rowed the entire 2,077 miles of the Amazon, it gave him a new insight into teamwork and organisation

By Dave Baxter “There is a silver lining,” he tells me. “You realise there’s something quite beautiful to the human habit of saying ‘It sounds quite good’ in the pub. But it was much harder than I expected. It was hell.” Mark de Rond, an academic, has worked with elite rowers, improvisational comics and surgeons to monitor how teams and individuals behave in unusual circumstances. But he decided to become the subject of his own research in September, by rowing the entire 2,077-mile length of the Amazon with a partner, and analysing the consequences. De Rond, who specialises in strategy and organisation at the University of Cambridge Judge Business School, has spent years watching teams in tough scenarios, from elite rowers to war doctors. But his own feat of endurance, which took a month and won the duo a Guinness World Record, pushed him further, physically and mentally, than he could have anticipated. De Rond, who completed the journey into

northern Brazil with Clare College rowing chief Anton Wright, endured sleep deprivation, the onslaught of tropical storms and even a serious infection in the pursuit of his goal. “We started as a team of three and became two after two weeks,” he says. “I would like to say it was romantic, but it was hell. “We would sleep a couple of hours and then work a couple of hours. There’s a whole section of the river referred to as ‘pirate alley’ because of the danger of being taken hostage, and we had to constantly row through the night. “I came back with an infection – it’s an interesting anecdote. I was infected on my right butt cheek, because I was sitting all the time. “It got so badly infected that my team mate had to lance it with a surgical knife. They were on the phone to a doctor in the UK. I was sat there with a towel in my mouth because there was no anaesthetic, and he was cutting it out, trying to squeeze the pus out.” Despite all this, de Rond believes the ordeal has helped him to investigate the link between the levels of social harmony within teams and how well they actually

Far right: Cambridge rower Anton Wright; Inset above left: Mark and Anton are awarded the Guinness World Record

perform. He argues that while companies place great importance on promoting harmony between their employees through team-building exercises and other methods, this could be less closely linked to productivity than firms think. “Much emphasis is placed on making sure people get along, with companies organising paint balling or whatever,” he says. “Performance is hugely importance for effective work, but I think teams will work themselves out, provided they are performing well. “Teams can be dysfunctional and quite effective. On the Amazon row, we would have our problems, but if we found out we had rowed more miles than we needed to on a particular day, everything would come together. “The problem in corporate life is that performance is harder to assess. The challenge is being creative so performance can be accurately and objectively assessed, and more obviously shown.” De Rond argues that if harmony is actually a product of good performance rather than its cause, firms may have to make the difficult choice between employing people who are more likeable and those who are, in fact,

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Strategy execution

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A bite of the Apple How will ex-Burberry CEO Angela Ahrendts fare at the technology giant, asks Dave Baxter

Main image: Mark de Rond en route on the Amazon; Left: Mark unwinds with a swig of water; Above: the boat is investigated; Below: fishing for dinner

more productive. And for those bosses looking to get the most out of staff, he warns of a major threat to productivity and morale: boredom. T hough he ex per ienced f i rst-ha nd the demoralising nature of tedious work while sitting for days on end in a boat, de Rond learned more about boredom in 2011 when observing surgeons at work on casualties of the Afghanistan war. He joined teams of surgeons, watching how they worked with the victims of explosives and gunshot wounds, and claims it to be the best team work he has witnessed. “The hardest thing on a daily basis was that, with the most terrible injuries in the UK, they are mainly blunt injuries,” he says. “But in Afghanistan it’s explosions or gunshot wounds. “Half of the people treated are Afghans, but they can only be treated within certain protocols so you can only treat them to an extent. And lots of the wounded are children, which seems grossly unfair. “One time, we had nine [injured] people in about 30 minutes, and five were children who had been shot by us. The surgeons have to act very, very quickly in making decisions on how to treat them.

“Watching them work is beautiful, because they are so good at what they do.” With such severe injuries in war zones, several surgeons are needed simultaneously and at once to save a person’s life. But with a large staff, quiet periods can lead to a “destabilising” sense of boredom, de Rond argues. He says: “The problem in a war zone is it’s not always busy. The surgeons have nothing else to do – there is a gym but it’s very busy, and it’s very hot outside. “Boredom can be very destabilising for teams. These teams can become acerbic and difficult to deal with. One recommendation I made (to tackle this) was to slash the team by 20 per cent,

but the problem is you need the resources in place for when something happens. “More generally, the most effective teams are the ones that are too small and under-resourced. Most people want to be over-resourced, but it’s a curse.” De Rond’s final observation is on the need for staff to feel “psychologically safe” in order to perform at their best. “In the Amazon, when there were three of us, one of us was very intimidating,” he admits. “We needed him on board because he kept us safe from pirates. He was a former soldier and not afraid of anything in the world. He was a character. “The problem was, he was very intimidating and we felt psychologically unsafe around him. When he left, the sense of safety returned. “That’s important, because you don’t want an environment where people self-censor and where there’s stuff you need to know but they can’t tell you.” When de Rond talks to me, he still sounds slightly fatigued from his epic row, and he tells me he is unsure if he would do anything so difficult again. But his next research project is unlikely to be boring.

he turned an underperforming heritage retailer into one of the world’s iconic fashion brands and commanded a pay package worth nearly £17m last year, making her the FTSE 100’s best-paid CEO. But after nearly eight years, Angela Ahrendts will turn her back on both Burberry and the world of fashion. In a characteristically digital-centric move, Burberry released a video in October of Ahrendts discussing her plans to leave the company by mid-2014 with her successor-to-be, Christopher Bailey. She has been poached by Apple and will work in a new role overseeing the tech giant’s online and retail stores. Apple’s gain is Burberry’s loss. Taking over at the fashion retailer in 2006, she identified what she saw as its problems and began implementing a strategy to turn the company around. Writing for Harvard Business Review, Ahrendts noted that, though luxury retail was one of the fastest-growing sectors in the world, the Burberry brand was struggling to capitalise on its iconic image. She realised not even the company’s top managers were wearing its trademark trenchcoats, and that global expansion meant Burberry had inconsistent product ranges around the world. Ahrendts set about changing this by appointing one global design director, while focusing on making Burberry digitally savvy. At a time when other luxury retailers were cautious of e-commerce, Ahrendts focused on the need to grow Burberry’s website, as well as placing iPads in stores, taking on new software to reduce costs and streaming Burberry fashion shows live on its site. In interviews, she has stressed the need to use her senior managers as a team, employ “digital natives” who can communicate with younger audiences, put out a consistent message and link employees by circulating content such as webcasts and previews of advertising campaigns. Her work has been impressive. Burberry has risen in value by around 300 per cent since she took over, and company shares plummeted on the announcement of her move. Sp e a k i ng ab out he r d e p a r t u r e , B u r b e r r y ’s chairman Sir John Peace praised her leadership in transforming the retailer. “I want to thank Angela personally for building a great culture and leading the company through the incredible transformation over the last eight years,” he said.

Business Reporter · November 2013

Strategy execution

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Lost in translation – why good strategies can fail to deliver INDUSTRY VIEW

hen good strategies get lost in translation, it’s seldom because there’s anything fundamentally wrong with the ideas. Instead, execution falls victim to a predictable series of leadership stumbles. After all, it’s easy to think that just because the board and executives signed off a new strategy that they must be aligned with it. Voting in favour is one thing. Understanding the full implications and being able to lead and communicate important changes consistently is quite another. This happens more often than you’d expect – around three quarters of the time even the most cleverly articulated and neatly drawn strategies perish once they hit the shop floor. For leaders, thinking the hard work is over just because the strategy has been created is another man-trap. If you thought strategy creation was intense and occasionally painful, just wait for the execution. The complex changes demanded by today’s competitive market require a “one company” approach. This requires decision making that cuts across functional silos, engagement of the whole organisation and leaders that take accountability for end-to-end solutions. This is uncomfortable, as it challenges traditional paradigms around autonomy, requires real teamwork and co-ordination across the entire business and demands more leadership time. By delegating too early, or oversimplifying the challenges, senior executives fail to engage with the reality of implementation, complex problems are delegated to a level where they simply cannot be resolved, and execution grinds to a halt.

So, how to avoid the pitfalls? To start with, there must be a deliberate rational and psychological journey of translation sitting between the strategy-creation phase and implementation. Otherwise the leadership team and organisation will not be properly aligned or committed and they will all fail. Effective translation is not a linear process – leaders must embrace iterative decisionmaking to ensure that the right choices are made about what should be done and how to execute. Strong leadership comes from having a deep understanding of the relevance of the new approach – the strategic “so what” ensuring a clear view of how the business will work post-implementation, how it will get there and how long that journey will take. Underestimating what it takes to achieve effective translation is an all-toocommon mistake. Effective implementation is all about focus. Quick wins are good, but myriad disparate projects and a dozen workstreams are not. Ruthless prioritisation and a less-ismore approach are essential for translating strategy into action and avoiding “initiativeitus”. Address the tough decisions early – too many organisations shy away from them. Leaving difficult issues to be resolved in the implementation phase has scuppered many good strategies. Tackle problems by getting the right people in the right place in good time. Ultimately, successful transformation requires getting the psychology right too. Plans always change, but ensuring everyone understands why change must happen is invaluable. This takes a strong and visible leadership which actively rewards the right

INDUSTRY VIEW

behaviours while debunking old ways of working. It all comes down to walking the talk – consistently and for a long time. Chris Wakerley (above) is MD of Boxwood 020 3170 5897 www.boxwood.com

Put people first to implement strategy well Graham Scrivener on executing strategy through people INDUSTRY VIEW

mplementing a change initiative swiftly and successfully is not just important for driving your business forward, the results will impact your bottom line. Our research with hundreds of leaders from around the world – the basis for our book Strategic Speed: Mobilise People, Accelerate Execution – shows a link between speed and business results. We found that on average faster companies had 40 per

cent higher sales growth and 52 per cent higher operating profit. However, our research also uncovered a big mistake some leaders make: they operate faster only because they manipulate processes to become more efficient. While this is helpful, focusing on efficiency alone does not create speed. In fact, our research showed that leaders achieve strategic speed when they focus on people. Here are our top tips on how to implement strategy well: 1. Communicate the strategic direction or intent 2. Seek each person’s buy-in and

If you’re big enough, you should be good enough

ask for his or her commitment to making the strategy work 3. Educate people on external and internal business conditions and their implications for decisions 4. Define and communicate objectives, roles and action plans for executing the strategy 5. Coach people to see how their job, skills or behaviours contribute to overall success 6. Stay involved in important initiatives and projects and help people adjust their plans 7. Arrange opportunities for dialogue on the organisation’s strategy and people’s role in it

8. Encourage and reward collaboration 9. Award greater flexibility in making decisions and pursuing objectives 10. Create time and settings for reflection 11. Provide each person with opportunities to offer insights 12. Implement practices to help people learn from experience and apply this to emerging problems Graham Scrivener (left) is managing director, EMEA at Forum emea@forum.com www.forumemea.co.uk

CIO Plus has an enviable record of improving efficiency and profitability by delivering commercially focused technology underpinned by solid experience and common sense. We believe that, if you have sufficient critical mass, then you can obtain the best value from sourcing by doing it for yourself, avoiding additional premiums and a loss of control that outsourcing can entail. We have developed two specific products to help organisations reduce cost and improve performance when they are unhappy with their current sourcing arrangements and have not retained the in-house skills to extricate themselves. First, if an existing outsourcing deal is not delivering value, we will organise an independent relationship review of the deal and use our experience to ensure that the promised value is delivered. We have many successful examples of this, ranging from small contract adjustments to full-scale re-insourcing. Secondly, CIO Plus specialises in setting up client-owned offshore Indian IT & BPO facilities that can deliver substantial cost and performance benefits. Typical benefits include: six months’ set-up; running costs reduced by 66 per cent; SLA improvements up to 25 per cent; increased flexibility and scalability; payback within 12 months. Because we are experts, we can rapidly construct and validate the business case that you will need to convince your board that this is the right direction for you. Rest assured we can supplement your existing skills base to project manage the assured delivery of any of our recommendations. If you want to discover if this is the right path for you, contact us for a noobligation initial discussion and free outline assessment. +44 (0) 1926 857 601 john.berney @cioplus.co.uk

Business Reporter · November 2013

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Strategy execution

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Inspector Dogberry C

orporations have millions of employees, but it isn’t always obvious in their publicity. Celebs and characters like Richard Branson have come to represent the world’s biggest firms. Workers may feel underrepresented. With large companies dominated by boards and shareholders, they may also feel rather powerless if they want to influence how businesses are run. But, according

to one organisation, giving workers a say at the top could improve performance. The Trades Union Congress (TUC) claims that letting workers sit on company boards, where the big decisions are made, would keep executive pay at reasonable levels as well as encouraging the long-term success of the business. It references two of its recent reports, one looking at European companies and

No matter how good a business plan is, employees will make little progress if they feel too stressed to get anything done. With this in mind, bosses located near the Bank of England may be heaving a sigh of relief at possible plans to move loud, chaotic traffic, likely to do nothing for their workers’ nerves, out of the area. The plans, known as the Bank Area Strategy, are being considered by the City of London Corporation after a public consultation found respondents complaining about road works and inadequate provision for pedestrians. If implemented, the plans could improve safety for cyclists, reduce congestion and make the area slightly less stressful for City workers. If they are lucky, the air may

one focused on the UK, which argue that short-termist strategies have led to poor productivity, low investment and falling wages. TUC general secretary Frances O’ Grady said: “Seats for the workforce on company boards would help inject a much-needed dose of reality into boardrooms and put the brakes on the multi-million pay and bonus packages which are fast becoming the norm in corporate Britain.” Strategy formulation is unlikely to move down from the board quickly. But workers could still shift the balance.

By Matt Smith, web administrator

u Editor’s pick BTS Strategy Execution Blog www.bts.com/news-insights/ strategy-execution-blog.aspx For posts, podcasts, and infographics on strategy execution, look no further than specialist BTS’s blog. The site’s contributors tackle issues ranging from whether talent or practice is more important to success, to the way in which existing leadership models affect an organisation’s ability to execute strategies.

Back from the dogs? Strategy execution often involves major changes within businesses, sometimes when they are bouncing back from harder times. For Dogberry, who always roots for a good comeback, this is heart-warming to see. So it was a delight to hear that, seven months after it was bought out of administration, troubled retailer HMV has been busy revamping its digital strategy. This started with the launch of a free smartphone app in October. The app will mean shoppers can easily buy or listen to snippets of music by scanning posters, adverts and CD covers. Users will then be able to pick out songs from HMV’s digital catalogue or store

email dogberry@lyonsdown.co.uk

ExpertInsight

What’s the secret to running a company well? Dogberry is keen to get his nose stuck into Eric Schmidt’s book No Adult Supervision: How To Build Successful 21st Century Companies, scheduled to come out next year. For those eager to know what makes good companies tick, Schmidt, who ran web giant Google from 2001 to 2011, could be a useful read. The company has dominated the online search market, is ploughing deep into other industries, and has even established its name as a functioning verb. Looking back on Google’s early days, Dogberry has one question: will Schmidt write much about that old slogan, “Don’t be evil”?

them to play on their phones later. Is Dogberry’s favourite canine mascot back?

Change Whisperer

Jeroen De Flander

http://gailseverini.com/category/ strategy-execution

http://jeroen-de-flander.com

Conner Partners’ Gail Severini offers her thoughts on change and strategy execution on this neat blog. Among the posts is an interesting three-part series on why it can be better in the long run to work more slowly and thoughtfully, rather than rushing forward with new strategies.

Jeroen De Flander has helped managers in 30 countries to execute strategies, so his “nononsense blog” is a good place to look for tips. There’s even a free e-book on how to identify common hurdles that businesses face, and how your firm can combat them.

Master Sun Group http://strategy-execution. blogspot.co.uk

Strategy Architect (Free – iOS)

StrategyBlocks (Free 30-day trial – iOS)

This handy app for business leaders simplifies strategies into clear roadmaps, making them easier for you to put into action.

StrategyBlocks offers an interface that serves as a clear indicator of your progress towards your goals.

Not only does strategy execution specialists Master Sun Group’s blog feature modern, smooth animation, it also offers interesting thoughts on carrying out plans within your business. There are also presentations to help you organise and implement new strategies.

Employee engagement crucial to strategy execution INDUSTRY VIEW

ffective strategy execution requires 1 per cent strategy formulation and 99 per cent alignment. Alignment efforts depend upon company culture – how leaders engage employees in organisational processes. The keys to great strategy execution include evolving your strategy based on previous executions and an engaged employee organisational culture.

Lessons on leveraging employee engagement to drive strategy execution: • Ensure executive leadership commits to employee engagement behaviours • Generate executive sponsorship and organisational strategic alignment • Define the business case for action/change • Build change agent capacity at all levels

• Build capability for employee engagement at the local level • Embed engagement behaviours through change agents and executive leaders Successful strategy execution involves “making the strategy real” for employees by translating it into meaningful language and actions. Typically strategy is formulated by a small group driving for competitive advantage and translated into language/actions to engage those building implementation momentum. The next step often overlooked is vital: embedding the strategy into the organisation. This involves helping employees develop understanding of how the strategy fits into their local world.

Fivequestionstohelpensuregreateremployee engagement in strategic execution 1. How have people been prepared for success in the strategy implementation?

2. How have middle organisational leaders been involved in the strategy formulation? 3. Is execution based on tell, sell or collaboration with the organisation’s middle and front line leaders? 4. How have middle org-leaders probed for gaps, generated insight to address strategic challenges or explored operational efficiencies? 5. How have you incorporated the captured learning from previous strategy executions? Todd.Heskett@watermarq.co.uk www.Watermarq-Consulting.com

12 | Business Reporter · November 2013

an independent report from lyonsdown, distributed with the SUNDAY telegraph

Business

NEWS...VIEWS...INSIGHTS...OPINION...REPORTS...NEWS...VIEWS...INSIGHTS...OPINION...REPORTS...NEWS...VIEWS Strategy execution

Video bonus

Getting Strategy Execution Right – Harvard Business Review http://youtu.be/nCo6WN_Q2GU INSEAD professor Michael Jarrett on the most important imperative for your business.

Africa

China

Companies working in Africa should continuously focus on risks in their business strategy, according to a report. The 2013 Ernst and Young report, Doing Business In Africa: From Strategy To Execution, warns firms to avoid making risk assessment a “one-time process” before carrying out a business strategy. Major problems facing businesses in Africa include infrastructure gaps, complicated bureaucracy, and what the report describes as “undeveloped consumer demand”. The report reads: “It is axiomatic that Africa’s complexities and challenges, combined with increasing competition to access its many opportunities, put a premium on both planning in the strategy formulation phase and flexibility during implementation. “Continuously monitoring and evaluating one’s strategy and planning for contingencies

A charity claims Britain must develop a “more ambitious and tailored strategy” in order to benefit from its links to China. Nesta, which wants to increase Britain’s capacity for innovation through policy, research and networking, has released a report describing China as an “absorptive state” which increasingly attracts and profits from global knowledge and innovation. The report, China’s Absorptive State: Innovation And Research In China, claims the Asian giant is accelerating its shift to a more innovative economy, and that Britain is now one of its main research partners. But it also calls for a more strategic approach to boost China-UK collaboration. The countries have collaborated on areas including smart grids, carbon capture and storage and electric vehicles. The report praises the amount of joint

is particularly crucial.” The report also argues that companies must “learn to live with complexity” and unpredictability, partly because of a lack of reliable, accurate official data from many African nations.

research carried out between the two countries, particularly by universities, but also outlines a number of steps the UK should take to encourage further collaboration. These include developing a fiveyear strategy for China-UK research and innovation co-operation, using more sophisticated met hods to identify and measure co-operation, expanding dialogue between the two countries and enhancing the presence of British researchers in China. The report reads: “It is vital to continue investing in the process of gathering ‘innovation intelligence’ on the ground in China, by ensuring we have suf f icient representatives who can liaise

Creating

positive impact on leadership and

business performance At Mannaz our focus is executive and organisation development. Renowned for our collaborative approach, we help organisations to create enduring capabilities through our co-design and co-delivery methodologies. We support organisations in many ways, including: • Customised executive development • Executing strategy through leader development • In-role development • Enabling organisation change Please visit our website www.mannaz.com to learn more or contact us directly at London@mannaz.com Mannaz is an international frontrunner in leadership development. Every year we design and deliver programmes for more than 10,000 executives, project leaders and specialists. Using our innovative and efficient learning methods, we empower people and organisations to improve performance and business results. With offices in Copenhagen, London and Hong Kong and an international network of experts and facilitators, we work with clients across the world.

and identity potential Chinese partners, within and beyond the obvious centres of Beijing, Shanghai, Guangzhou and Shenzhen. “The density and diversity of connections is crucial – successful collaboration strategies need to operate in an integrated way across the academic, research, commercial, trade and cultural spheres.” The report comes at a time when British politicians such as George Osborne and Boris Johnson have been emphasising their enthusiasm for trade and collaboration. On a recent visit to China, the two welcomed the prospect of Chinese business and investment in the UK. As Nesta argues, the British strategy towards China is shrewd, but more could be done.

November 2013 · Business Reporter | 13

an independent report from lyonsdown, distributed with the sunday telegraph

World

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offering them help. It is not alone. According to reports, tech giant Apple hosted a recruitment drive at a hotel in Waterloo, Ontario, not far from Blac k Ber r y ’s headqua r ters. Black Berr y employees were allegedly sent invitations via LinkedIn.

Canada

ExpertInsight

Troubled phone-manufacturer BlackBerry’s strategy of cutting staff to survive could greatly benefit tech start-ups in Canada. As part of a new strategy to cope with its financial woes, BlackBerry has been dramatically downsizing. In September it announced plans to c ut a rou nd 4, 50 0 job s, bringing its overall numbers down to around 7,000. This may be painful for both BlackBerry and its employees, but Canadian tech start-ups are likely to benefit from the release of valuable talent and experience. Communitech, a recruitment agenc y in t he count r y, has issued a press release pointing out these benefits. It reads: “Aside from fuelling innovation, BlackBerry has been a main contributor to the talent pool, which makes the community attractive to other entrepreneurs. Mid- to large-sized companies that

India

plan on expanding could benefit from the pool of experienced people.” The agency has even been trying to actively court former BlackBerry staff, with a notice on its website offering them job search support, workshops, career counselling and access to an online community

There h ave a l s o been reports of Intel holding an “information session” for t hose laid of f by BlackBerry at a hotel in the area, with employees being emailed beforehand. Later in September, BlackBerry announced it had a signed a letter of intent agreeing to its sale, with shareholders receiving $9 per share. Due diligence on the deal, which would see a consortium led by Fairfax Financial Holdings buy the company, was expected to be complete in early November.

Coca-Cola India has made a number of changes to its senior leadership structure in the hope of greater success in the country. The changes, which came into effect last month, included focusing more on the company’s operations unit, and reflect the Coca-Cola group’s desire to make India one of its top five markets by 2020. Last year the Coca-Cola system, which consists of the company as well as some of its partners, announced it would invest a total of $5million in India between 2012 and 2020. Muhtar Kent, Coca-Cola’s chairman and CEO, said: “Achieving continued sustainable, responsible growth in India is core to achieving our 2020 vision of doubling system revenues in this decade. “Our ongoing investment in India is focused on delivering innovation, partnerships and a portfolio that enhances the consumer experience, ensures product affordability and builds brand loyalty to deliver long-term growth.” The company says India’s demographics and economy are “huge drivers of growth” and will help increase its presence. Sanjeev Aggarwal, managing director at Moon Beverages, one of the company’s partners in India, said: “Coca-Cola’s business in India has been growing at a robust rate over the last six years and our goal is to continue this momentum.”

The 20 per cent opportunity gap Beware the failure of operational execution INDUSTRY VIEW

nce, business improvement was about incremental change: small steps making up a longer journey towards excellence. But in today’s business climate, that’s rarely enough. Instead, a step-change in performance is required, calling for more strategic initiatives. The trouble is, such initiatives often fail. Indeed, says Jean Baron-Mazloumian, managing director for Europe at operational consultancy Alexander Proudfoot, surveys frequently confirm that a significant majority of such initiatives fail. Only rarely does that failure occur because the strategic vision itself was flawed, he adds. Instead, it’s a failure of operational execution. “The difficulty in executing a strategy properly is that top management have a ‘helicopter’ view of the business, and can’t see clearly how their assets and people are performing,” he says. The result: opportunities missed to slash cycle times, cut waste, improve throughput, boost equipment utilisation, and increase productivity. And from this lack of operational visibility, he adds, two conclusions logically follow. The first is that strategic initiatives themselves may be misdirected. Targeting major strategic moves through sweeping change, they overlook the sizeable improvements in performance that are already waiting to be tapped, out there in

the business today. “Operations isn’t seen as glamorous – but if you don’t actually walk the floor at 2am, you don’t see the problems: waste, misaligned shift changeovers, duplication of effort, and low utilisation of people, equipment and material,” says Baron-Mazloumian. The simple message: big initiatives are all very well, but simply eliminating the gap between best-demonstrated performance and operational reality could deliver in the region of 20 per cent more profit, and faster. As a result, it allows the company to finance many more strategic opportunities with that additional revenue. And Baron-Mazloumian’s second conclusion is just as sobering. Why do strategic initiatives fail? It often boils down to a lack of execution discipline – the very bedrock upon which, as the world’s foremost operational improvement firm, Alexander Proudfoot’s own operational prowess rests. “Execution isn’t sexy either,” he admits. “But it’s very important. The devil is in the detail, and you need to embrace it. Look at the plans underpinning many strategic initiatives, and what you see is marching orders and hope. Not rigour, and regular checkpoints and reviews to see if progress is being made, and if things are headed in the right direction.” Alexander Proudfoot, he says, is a firm believer in rigour, and he ticks off on his fingers the founding principles of the firm’s approach to implementation: “Make sure the right processes and procedures are in place – that’s important. Then make sure that the right metrics and key

performance indicators are also in place. And finally, recognise that training and coaching will help people move in the right direction.” Proof is provided by some recent Alexander Proudfoot success stories, ranging from a financial services firm realising annualised benefits of $4.5million in seven months, a mining company £17.8million in weeks and a building materials distributor €50million in under a year. “At Alexander Proudfoot,” says BaronMazloumian, “we know how to deliver initiatives that work.” Jean Baron-Mazloumian (below left) is managing director at Alexander Proudfoot 020 7710 5168 www.alexanderproudfoot.com

Business Reporter · November 2013

Strategy execution – Industry view

Business Zone

an independent report from lyonsdown, distributed with the sunday telegraph

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The future

Execution, execution “However beautiful the strategy, you should occasionally look at the results” – Winston Churchill

A definitive roadmap to help you INDUSTRY VIEW

good strategy is important but business failures – whether missed opportunities, failed initiatives, flat-footed response to market change or leaking revenue – are more often down to bad implementation than bad strategy. In a recent EIU survey only 40 per cent of executives rated their company as successful in execution. I have spent the last 20 years improving the execution of business-critical strategies in large organisations. It can be done but it requires a sea-change in the way a company looks at its challenges. In essence it has to see them as a series of projects, where delivery is the be-all and end-all. So building organisational capability in the disciplines of project management is crucial. My view, however, is that building formal hard skills is only half the story. Before my business career I served in the army. There is a lot the business world can still learn from the way the military delivers its strategies. The military approach is certainly underpinned by a rigorous attitude to planning and project management. But that is not enough on its own. The key success factor is effective leadership. By leadership I do not mean the grand design, the big hand across

Paul Heugh, CEO of Skarbek, at Camp 4, Mount Everest the map or chairing the board meeting. Rather a chain of leadership which runs through every level, which ensures that each member of every team – down to the most junior – understands their role, their responsibilities and how they will contribute. Leadership which motivates and engages, which builds confidence that the difficult can be done. Such leadership relies on behaviours such as trust, dedication, accountability, resilience, communication and emotional intelligence. These behaviours can be embedded into the DNA of an organisation. But this may require a radical overhaul – of both senior management attitudes and approaches to promotion, training and recruitment. My three key messages to companies

facing challenge and change are: •S trategy is important, but delivery is more important • Build an engine-room of delivery capability at the heart of your company • Develop a cadre of strong and experienced leaders at all levels, starting at the most junior level – then trust them to deliver Paul Heugh was vice-president for strategic projects at GlaxoSmithKline and is now founder and CEO of Skarbek Associates, which specialises in strategy execution, programme and project management and capability building. In his spare time, he climbs mountains. 020 3178 5208 www.skarbekassociates.com

In focus: External strategy links are key Bill Hewlett, founder, Hewlett-Packard

“

Show competitors what you are doing. They will learn soon enough anyway. Just don’t tell them what you are thinking.

“I

n preparing for battle I have always found that plans are useless, but planning is indispensable.” Dwight D Eisenhower’s words are a reminder of both the benefits and dangers of thinking ahead. So how do companies create and execute strategy effectively when faced with an unpredictable future? Stephen Day (right), chief executive of Entrusted Group, has significant experience of both turning around struggling businesses and future-proofing successful ones. He believes the key is an integrated financial, operational and growth

strategy, which is resilient but also flexible enough to evolve as the market demands. “In tough times the question I’m usually asked is: ‘how do we cut costs?’,” says Day. “Then, as the market improves , this becomes: ‘how do we create growth?’ A robust strategy should control costs without limiting opportunity, and create maximum growth with minimum upfront investment.” The first step is to carry out an appraisal of your capabilities and market position, using this to define your objectives and shape your strategy. “Create

efficiencies which free up financial resources to support organic growth, but also consider acquisitions which enhance capability and provide access to new markets,” adds Day. “You should also look at strategic diversification.” Developing an effective ongoing relationship with an external strategy partner avoids quick fixes and provides valuable perspective, allowing ingrained assumptions and approaches to be constructively challenged. But most importantly, it ensures not only that your strategy is

carried through but that it evolves with your situation, because, to paraphrase Charles Darwin, it is not the strongest that survives, nor the most intelligent, but the most adaptable to change. 0161 605 0812 info@entrustedgroup.com

Strategy is key to success in any company, and a sharp execution should lie at the heart of its business operations. A clear realistic strategy and its effective execution at every level is vital to creating high performance in your company. Putting it into practice is what matters to realise your business goals. Ascend Twentyone can help create a definitive roadmap that points your

A clear, realistic strategy and its effective execution at every level is vital to creating high performance company in a positive direction. And we can help to achieve your goals, whatever your business. We can help set in motion a continuum of management and monitoring processes to ensure precision in executing your strategy, achieving business efficiency, high performance, profitability and growth. We’ll ensure communication of your vision throughout your organisation, putting responsibilities right in the hands of your people. Strategy execution turns companies into high-performance businesses. And we can help with yours. Why not benefit from our service? 0808 208 2388 www.ascendtwentyone. com

Business Reporter · November 2013

an independent report from lyonsdown, distributed with the sunday telegraph

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Strategy execution – Industry view

Find us online: business-reporter.co.uk

The debate

Why do strategies fail? Mark Allison Managing director Digital Opinion

Nik Askaroff CEO EMC Management Consultants Ltd

Heidi Kharbhih Management consultant Optimise Your Business

Jo Moffatt Managing director Woodreed

Stephen Grant Managing director and founder Cititec

It’s often said strategy is relatively easy to formulate but notoriously difficult to execute well. Clearly there are lots of reasons for that. One of them is a lack of employee engagement. Effective strategy execution requires employee buy-in and sustained commitment over time. For some employees it’s about feeling part of something big and worthwhile; for others it’s about pride and championing a cause. These sentiments are also some of the key ingredients of engagement. When employees are not engaged:

In those circumstances strategies often fail, so it’s not surprising that engagement is increasingly being seen as a prerequisite of success and effective strategy execution. How engaged are your people?

It’s not usually strategies that fail, but people. Even the best-laid plan will come unstuck if the right people aren’t in the right place at the right time to execute it. Our multi-disciplined “mobile boardroom” of senior finance, marketing, sales, IT and production professionals has spent 25 years helping firms deliver elements of their strategic plans that fall outside their internal competencies or where the amount of work is too much for the management team. A successful strategy will combine vision, culture, structure and resources. If any of these are missing it could create internal frustration, a confused management and dysfunctional delivery. The strategy needs to be supported by a detailed action plan with a clear allocation of responsibility and timetable for delivery. Involve your teams and ensure you have the right people and resources in place. Otherwise, get help. If the plan is clear and you have expert support around you, your chances of success are significantly increased.

Strategies with poor definition are guaranteed to fail. The underlying cause is a lack of understanding – this could be due to insufficient customer insight via incorrect interpretation of customer behaviour, or relying on inadequate management information and flawed customer research. An unsound strategy could also be caused by misinterpretation of market conditions, little regard to environmental factors or inaccurate assumptions about competitor activity. Understanding the customer base and the market is key in determining a successful business strategy. A less obvious reason for strategies failing is poor strategy execution, which could be down to deficient planning or poor delivery management with insufficient progress performance tracking. Lack of experience or capability is also a key driver of failure, as well as poor communication. Both strong planning and communication will ensure delivery of the defined strategy. Successful business strategies require both robust strategy definition and strong delivery execution.

Rather than asking why strategy fails, I want to argue what makes strategy succeed. The answer is brand. Much more than a logo, and based on truth, a brand is an organisational blueprint for growth. Brand shapes and maintains a healthy company culture that works to achieve corporate and strategic objectives. It’s a rallying cry to engage a workforce, a blueprint for the way everyone behaves. Authentic brands build trust inside organisations. Build trust and you’ll build engagement. Engaged employees are happy to work, happy to stay. Engaged employees are receptive, they take ownership. They understand what needs to happen to make the difference. People engage with brands emotionally; emotional engagement is four times more powerful than rational in driving behaviour. Strategy succeeds when internal communication is given a human, brand-hearted, voice. You’ll then have a motivated internal audience open to change and willing to take responsibility for making things happen. Then strategy succeeds.

We have to look to people. After all, they’re responsible for putting strategy into practice and determining its success. But it’s not about blaming people for poor execution. If they’re not enthused, engaged, inspired, and motivated, what more can we expect? Naturally, businesses look to motivate employees when they’re about to put a new strategy into practice. That’s too late. Instead, I believe successful strategy and execution is largely determined at the recruitment stage. In recruitment, our initial goal is to match expertise with clients. But we don’t just provide skillsets, we provide people. Find the right people early, that can enhance your culture and be driven to implement strategy, and the rest takes care of itself. What about the people who represent your customer base? What about the truly intelligent people? What about the creative ones? These are the candidates you miss if you never take the time to find them and, ultimately, they’re the ones who will make your strategy better to execute. Strategies fail when recruitment fails, and succeed when recruitment does.

020 8546 7243 www.digitalopinion.co.uk

nik.askaroff@emcltd.co.uk www.emcltd.co.uk

0845 519 3940 www.optimiseyourbusiness.com

01892 515025 www.woodreed.com

020 7608 5858 www.cititec.com

ExpertInsight

• They don’t feel part of a cohesive team united by a common, clearly defined goal • There’s no real sense of ownership or responsibility • There’s no shared belief in the goal and how its achievement would benefit the broader organisation.

Driving productivity through design When it comes to the built environment, thinking with the end in mind can make organisations more effective INDUSTRY VIEW

ue to the large investment involved, delivering physical assets “on time, on budget” is often seen as an end in itself. Organisations can be more effective by viewing their assets as enablers to overall performance, and factoring end-use perspective into upfront design. For example, the benefits of delivering a new scientific research facility are only realised if scientists and research staff are able to deliver state-of-the-art services once complete. A new hospital could cost more than £500million to build, but if nurses, doctors and support

staff spend 10 per cent less time travelling around the building, the savings and service benefits can be significant over the life of the asset. Nicola Gillen, director for Strategy+, the global workplace consultancy at AECOM, says: “We use design and the physical environment as a catalyst for organisational development. People come to us if they are going through a change – for example, a merger, increasing creativity or simply cutting costs.” Assets designed to support the needs of the

organisation, its staff and clients will enable productivity. Laura Doughty, AECOM’s head of global strategy and operations consulting, says: “We derive solutions through research, evidence-based methodologies, and listening to our clients.” In practice, this spans strategy, process mapping, organisational design and spatial concepts, through to operational readiness, change support, training and knowledge management. This approach draws on different experts. Gillen says: “We work across our disciplines, to test thought leadership through design delivery.” Doughty adds: “We do not deal with change in the abstract, we provide pragmatic advice and make sure there is robust science behind our projects.” Organisations want to work efficiently, and expect their staff to achieve this. By understanding business needs, and using them to influence design choices, organisations can have the same expectations for their facilities. nicola.gillen@aecom.com laura.doughty@aecom.com

SMART DECISIONS DRIVEN BY DATA

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