PICKING THE RIGHT PONY OR SELECTING, ENABLING, AND GUIDING THE RIGHT JOCKEY?
By Sal Mistry, Ph.D.
In other words, is it more important for executives to choose the “right” business strategy or is it more important to focus on how to execute on the chosen strategy? The answer: both.
Based on my academic research, consulting experiences, and thoughts expressed by my students, I find nearly everyone places an inordinate amount of importance of picking the “right” pony – often at the expense of selecting, training, coordinating, and guiding the individuals and teams to implement the strategy. This is especially true of inexperienced executives.
Obviously, the quality of the formulated strategy matters to the success of an organization. However, Bossidy and Charan offered a reason for executives’ obsession with formulating strategy in their best-selling book: Execution: The Discipline of Getting Things Done.
“It’s a pleasant way to view leadership: you stand on the mountaintop, thinking strategically and attempting to inspire your people with visions, while managers do the grunt work. This idea creates a lot of aspirations for leadership, naturally. Who wouldn’t want to have all the fun and glory while keeping their hands clean?”
This quote illustrates an important point: executives often emphasize formulating strategy because of the perception that picking the “right” pony is more meaningful while implementing the strategy is more menial. However, executive involvement is anything but menial or unimportant. Evidence suggests that between 70 and 90 percent of formulated strategies are never fully executed, and executive teams are often held culpable for these failures.
This makes sense since ignoring the vital role executives have in strategy implementation unleashes a storm of uncertainty for organizational members. For example, establishing goals is considered by many to be a function of strategy formulation, versus strategy implementation. However both carry their own unique set of goals. A defender strategy, which is a type of formulated strategy, wards off competitors by maintaining market share and relying on existing products and services. This goal, however, does not consider what organizational members must do within the firm to fulfill the goal or formulated strategy.
In other words, merely stating that organizational members should perform a defender strategy is not sufficient because it is too ambiguous. Instead executive teams need to perform a set of actions to create a shared purpose not only within but also throughout the organizations they lead. These actions are encapsulated in three specific discrete activities.
Executive teams are unique from all other teams, primarily because they formulate and implement strategies impacting entire organizations. However, even this team can be the greatest blessing and, the greatest curse to an organization. Successful teams have three distinct traits: (1) relying on individual expertise to complete shared tasks, (2) the ability to get along, and (3) a concrete shared purpose.
When interviewing executive teams, members say they are mostly rewarded on completing shared or organizational goals such as profitability (reliance, check). I also hear that they are working toward getting along better (getting along, check).
What’s missing is the most important element: a concrete shared purpose the entire team focuses on daily. This proved to be RadioShack’s demise. Sure, executive team members said they knew the organization’s strategy or that profitability was important; but, in their view, these were distant and abstract, things that didn’t help them have a concrete, daily purpose.
As a result, they spent a majority of their time on their own purpose; guiding and leading the departments for which they were in charge in hopes that their efforts on their own pieces of the organization would eventually translate to higher profitability for the organization.
What can help executive teams have a shared purpose? Two words: strategy implementation. Based on my recent research, here are four recommendations that can help CEOs to evoke a concrete shared purpose through strategy implementation:
- Specify the strategy implementation goals. Each member must then identify specific tasks the team must perform to ensure successful strategy implementation. This process will also allow members to fully understand the strategy implementation goals.
- Track progress. Consistently tracking progress ensures all members clearly understand each other’s role in the implementation effort, making it easy to understand how well (or not so well) the organization’s members are doing at implementing the strategy.
- Monitor roadblocks. Monitoring roadblocks requires examining obstacles, both within and outside of the organization that are hindering the implementation effort. I once heard an employee of VMWare say that during a product launch, company executives asked the company’s accounting and sales teams to provide honest feedback on factors that are inhibiting the implementation effort.
- Adjust the implementation effort or goals. Adjusting the implementation effort, in response to changing circumstance, is more of a fine-tuning process. In the example I gave about the new product launch, the executive team was able to streamline internal processes, which, in the end, helped the launch, and, in turn increased their revenue.
Picking the “right” pony is important. Equally important, however, is performing a set of executive actions to ensure the formulated strategy is properly executed. If the executive team is partially operating, there is hope. The good news is the solution might be as simple as developing a concrete shared purpose through the implementation of the organization’s strategy. The next question should be: what implementation effort will prompt the executive team to have a shared purpose?
Sal Mistry, PhD, teaches Management and Organizations at the Cox School of Business at Southern Methodist University in Dallas. email@example.com