Anam Pervaiz

Iffat Kamal

Mahum Afaf

Numerah Zafar

Usman Saleem

The Secrets to Successful Strategy Execution

When organizations and companies find it very difficult for themselves to execute strategy and
often failed then the first thought which came in mind is to withdraw or restructure the whole
organization functions. Then it would be possible that companies achieve effectiveness by
clarifying the right decisions in order to improve the flow the information within the organization
and across the organization. Then the right organization structure and motivators will best fit in
the organization.

The single utmost common characteristic of such corporations is that their workforces are clear
about which choices to be made and for which actions they are accountable for. As a result,
decisions are hardly anticipated, and precise competitive information rapidly finds its way up the
ladder and across organizational limitations. Managers transfer the key drivers of success, so
frontline workers have the information they need to understand the impact of their day-to-day
actions.

Performance is the outcome of thousands of choices to be made every day by employee’s stand-
in according to the data they have and their own self-regard. There are four important building
blocks that managers can practice to power their activities. These are

1. Clarifying decision rights

2. Designing information flows
3. Aligning motivators
4. Making changes to structure

The Elements of Strong Execution

In order to recognize the activities that were most factual in qualifying an organization to
implement a strategic plan. There are many ways that are considered important i.e. restructuring,
motivating, improving information flows, and clarifying decision rights. Among all of them
which factor is most important in order to know this, researchers draw up a list of 17 traits, each
conforming to one or more of the four building blocks mentioned above could qualify effective
implementation. Authors develop an online profiler that permits individuals to measure the
performance competences of their organizations.

People in strong and efficient organizations know that they have idea about decisions and actions
because they are responsible for them. But on the other hand, weak organizations with bad
executions of plans and decisions do not response to this statement about responsibility of
knowing decisions. Figure drops from 71% to 32% as response moves form good companies to
weak companies. As company grows, decision making becomes more decentralized. Because
they get busier in making decision for each other and in small corporations, everybody knows
what other subordinate is supposed to do. In large companies it becomes so difficult to
understand where accountability clashes starts among two individuals. A company found that it’s
hard to identify who is accountable for profits below the CEO level. If its alignment is done in
detail it will increase overhead cost. If focus on low cost is reduced but on profitability is
increased, it means that CEO has designating the accountability to divisions.

Smooth flow of information about competitive environment occurs to get to headquarters easily.
Again difference in acceptance of this statement occurs in term of number of people agreeing to
which is 77% from strong organizations to 45% in weak organizations. Usually headquarters are
dong such kind of research in identifying patterns and best practices to run around the
department.

Caterpillar is so successful now but a generation ago, it was threatened because operations were
not perfectly aligned to each other. Best way to align decisions is that they should be
decentralized too down to organization and by delegating authority to people who are actually
working closest to actions.

The organization suffered a loss in over 60 years due to having a strategy that did not take in to
account what was happening in the industry. It was focused on looking at its own costs and
drawing up pricing lists from there. This resulted in Caterpillar facing a loss of over a $ 100
million in the year 1984. This resulted from the fact that no one wanted to be the bearer of bad
news and tell the CEO what the actual issue was and rather tell him what he wanted to hear.
Surprisingly to make sure the flow of information was improved they handed over accountability
for operational activities to members lower down; reorganizing their company to create business
units to allow decentralization of the decision making unit and thus accountability for each
section. This also freed the higher ups to focus on the global strategy formation.

Another element that they brought was a form of trust where the allocation of tasks is something
that was looked for. To be able to trust your subordinate with day to day tasks, such as
administration; this leads to the rechecking and lack of trust thus the executive who second
guesses the work cannot in effect do his own job. This why entrustment of jobs to people who
work for you is of very high importance as opposed to intensive personal proprietorship.

It is of the utmost importance that managers within an organization are able to facilitate the flow
of information not just within in their own business unit or to their immediate executive but
rather across the chart to. This encourages inclusion and allows for the training of the employees
to have an understanding of the organization as one unit rather than different functions working
by themselves. Companies who excel in the horizontal flow of information also are able to
collaborate better and with today’s markets experiencing hyper competition from one another
and zero sum profit it is integral to their survival that they are able to work together.

Employees are only able to perform according to what they know; this is why it is important to
make sure that every employee of your company has a clear idea of what he is doing and not just
that but rather also what his contribution to the effort is adding to the company. What is the goal
he is supposed to achieve and what are the factors or the key performance indicators he needs to
work on to improve his overall performance. This can only happen when managers trust their
subordinates with the information and that by providing them with the information it will allow
them to make the right decision.

There are 4 integral things that managers need to include in their processes to ensure the success
of their employees and thus the company. This is to allow for decentralization and empower the
subordinates to make their own decisions, give them access to the facts available and motivate
the each employee to feel a part of the organization and thus encouraging them to take
responsibility for it.
The importance of identifying and then eradicating the barriers to the formation of a successful
strategy execution culture can also be understood through the Goodwards Insurance example. In
order to identify the possible barriers, Goodwards Insurance gave a diagnostic survey to all of its
7000 plus employees and then compared the obtained results to the 17 traits found in the strong
execution companies. The quantitative results obtained helped make the situation much clearer
and highlighted the fact that the middle management was a lot more pessimistic in their
assessment of the execution ability of the organization as compared to the top management.

The three major issues recognized were; the inability of information to flow freely across
organizational boundaries and the practice of putting the blame on other groups instead of
coming forward and accepting responsibility; slow transference of information from the lower
management to the upper management including heavy filtration of the information and inability
of employees to speak up about possible failures and issues in front of the top management; and
lastly a lack of knowledge among the employees about the decision and actions for which they
were responsible coupled with their inability regarding who to ask for clarification. In addition to
this, since 55% of employees felt that their decisions were constantly being second guessed, they
did not actively participate in company’s matters.

The company decided to counter this by launching a change initiative aimed at building a culture
of openness. One symbolic change was a rearrangement of the seating at the management
meetings. The upper management no longer sat separately but now sat among other employees
encouraging them to intermingle. Seating arrangements were also carefully choreographed at
company events. Moreover, some senior managers also accessed their own informal networks in
order to understand how people making key decisions got their information and identified gaps.
Based on these they made new frameworks which clearly identified who owns each decision,
who must provide input, who is accountable for the results and how the results would be defined.
Other initiatives included; decentralization of decision making to better align the information
with the decision, highlighting and eradicating duplication in committees, focusing on why the
problem occurred instead of who caused it by introducing scorecard and other metrics at the
group level, making planning process more inclusive, and highlighting the importance of lateral
moves in the organization for advancement in career.
All of these measures led to an improvement in the company’s execution culture, slowly but
surely. in addition to this, employees are not only beginning to feel more satisfied, as suggested
by the surveys, but have also started to reach across boundaries for better understanding. This
was a huge jump from the culture of blaming other departments and groups for the failure of a
plan.

Some companies also believe in test driving the organization’s transformations through
simulations instead of actually making changes right away. Such simulations include a
diagnostic survey based on which a baseline is created. The user can then select 5 out of 28
actions which usually attack the weakest links. The simulator also offers insights regarding the
effects of the actions on organization’s elements and then processes and evaluates your
decisions. These are then compared with the empirical relationships obtained from 31 companies
representing around 26000 data observations. Once you’re done with this exercise you have a
better understanding of the possible actions and their consequences on the organization and this
knowledge could be leveraged into making better real life decisions regarding strategy execution.

It is no secret that successful execution stands as a continuing challenge but what is most
important in the face of this challenge is the resilience to not only find a solution through
structural changes or motivational initiatives, but to look deeper and find the root cause and then
to work towards finding a solution for that cause.