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To cite this article: James M. Higgins (2005): The Eight ‘S’s of successful strategy execution, Journal of Change Management,
5:1, 3-13
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Journal of Change
Management Vol. 5, No. 1, 3–
13, March 2005
JAMES M. HIGGINS
Roy E. Crummer Graduate School of Business, Rollins College, FL, USA
ABSTRACT As the business environment becomes more complex and more changeful, the need to
reformulate strategy and/or to adjust elements of the existing strategy becomes more frequent. As a
resultseniorexecutivesfindthemselvesconfrontedwiththeneedtointegrateanumberofchangesin
the execution of the new or revised strategy. This dissemination and integrationof
execution actions is especially difficult across cross-functional activities. The ‘8 “S”s of Strategy
Execution’ is a heuristic that enables senior management to more readily enact, monitor, and
assess the cross functional execution of strategies, new or revised. The 8 ‘S’s model is a revision
of the original McKinsey 7 ‘S’s model. The most significant change comes in the deletion of
skills from the McKinsey model and the addition of reSources in its place. Furthermore, Strategic
Performance has been added to the model to help focus the strategy execution effort.
Correspondence Address: James M. Higgins, Harriet and George D. Cornell Professor of Innovation
ManageJ ment, Roy E. Crummer Graduate School of Business, Rollins College, 1000 Holt Avenue,
Winter Park, FL 32789, USA. Fax: þ1 (407) 647 5575; Tel: þ1 (407) 740 8974; Email:
jhiggins@rollins.edu 1469-7017 Print=1479-1811 Online=05=010003–11 # 2005 Taylor &
Francis Group Ltd
DOI: 10.1080=14697010500036064
4 J. M. Higgins
1. ReSources has replaced Skills as one of the 7 Contextual ‘S’s. The original
7 ‘S’s model did not contain an ‘S’ devoted to resources, other than the ‘S’
for staff. An organization cannot successfully execute strategy without
marshalling additional resources such as money, information, technology,
and the time
The Eight ‘S’s of Successful Strategy Execution 5
Table 1. The eight ‘S’s of strategy execution defined
Unsuccessful Alignment
In contrast to the successful alignment at Intuit, consider the
unsuccessful execution efforts of Durk Jager as CEO of Procter &
Gamble. Jager took control of the reins of the company on January 1,
1999, but was forced into retirement by July 1, 2000. Jager’s demise was
clearly an execution problem. The strategy chosen appeared by all accounts
to be just what the company needed, but Jager made errors both in his
choice of how to align the other Ss and in the timing of his actions.
Furthermore he did a poor job of selling his new initiative.
In September of 1999, P&G announced that Jager, already head of several major
P&G divisions, would become CEO. At this same time CEO and Chairman John
Pepper also announced a sweeping reorganization of the company that would
support what senior leadership knew was going to be Jager’s strategy. If
we analyze the primary actions taken by Jager with regards to the 8 ‘S’s, they
10 J. M. Higgins
1. Strategy: The business strategy for all major business units was fast new
product development accompanied by timely acquisitions in growth
markets where the company had no real presence. On the surface, this strategy
appeared to be just what was needed for the stodgy old company that had
a number of older brands that were beginning to lose their growth
potential or their market share.
2. Structure: Two major structural initiatives were chosen to carry out this
strategy. The first was the one announced in September 1998, entitled,
‘Organization 2005’. It had five major components, three aimed at improving
product development capabilities, while the other two were aimed primarily
at cutting costs. The former included the creation of 7 Global Business
Units (GBUs) based on product lines rather than the current 4 global
business units which were based on geography. Another such action was
the creation of 8 Market Development Organizations (MDOs) which
would control the development and marketing of products in local markets.
In aligning structure with strategy, there is always a question as to which
is better, geographicw or product line-based divisions. Under Jager, the
company sought both. The GBUs gave the company a product
perspective; the MDOs gave the company a geographic perspective. In
the fall of 2003, the company had
4 GBUs and 7 MDOs.
The cost cutting group of actions included the development of a Global
Business Services (GBS) Division into which all of the support units would
be grouped, thus eliminating redundancies at the division levels. It was also
planned that many people would be shifted from Corporate Offices to the
GBUs, MDOs, or GBS.
One problem with both of these sets of changes was that they were so
sweeping that employees pushed back. This sweeping reorganization resulted
in numerous mini-reorganizations that left many employees at a loss with
respect to what their roles were and who they reported to. Many of the
actions required a large number of physical moves from one location to
another.
Shortly after Jager assumed the role of CEO, he also announced that 15,000
jobs would be cut from the company’s 110,000 positions world wide, further
compounding the problem. As of the fall of 2003, P&G had 98,000 employees.
When you analyze what eventually took place, it appears that the structural
changes were appropriate, but too much too soon.
3. Systems and Processes: Reward systems were modified to encourage inno3
vation. In addition, Jager pushed the Internet as the communication
medium for the company, a company long known for its memos. Jager’s
alignment of systems and processes are appropriate, but the how of the
change resulted in push back on the Internet part of his actions.
4. Leadership Style: Jager apparently did not make an attempt to align the
management style of the rest of the organization’s leaders to fit the needs of
the strategy. But more importantly, his own style was abrasive to many, thus
The Eight ‘S’s of Successful Strategy Execution 11
negating most of his efforts at promoting change. When one examines the
overall impact of his leadership style on the ultimate lack of execution, it
becomes apparent that his style was one of his primary execution failures.
He failed to provide the kind of leadership style that was appropriate. He
tried to order change rather than sell it and provide a mandate for change.
When you examine successful change leaders, you find that they: communiW
cate the why and how of innovation over and over; encourage risk raking;
reward and celebrate innovation successes; empower employees to be
creative; exhibit a positive attitude about the change; focus on organizational
purpose; understand their employees’ emotions, help them work through
those that lead to resistance to change, and use the positive emotions of
employees surrounding change related issues such as beating the competition
and improving customer satisfaction, to build a mandate for change; and
construct relationships with others in the firm that are vital to achieving
success. With the exception of rewarding and celebrating innovation, Jager
apparently performed none of the other prerequisite leadership actions.
5. Staff: Some training and development programs were to be changed to
accom5 modate the new strategy. Other than these actions, it is not clear
from Jager’s strategy or actions how he intended to align staff with
strategy, other than through the structural realignments already noted.
One misstep is clear however, he failed to anticipate the impact on the
staff of all of the sweeping changes he was making, and hence his initiatives
suffered a series of setbacks.
6. reSources: Jager did set aside funds for the restructuring, and presumably
he anticipated that the results of the cost cutting efforts would be used to
help fund the new strategy. However the company did have a debt level
which could be seen as detrimental to strategy execution. It is important
to note that the company’s cost reduction efforts have been successful.
7. Shared Values: The greatest challenge Jager faced in realignment was to
change the culture to match the strategy, but Jager failed to recognize just
how difficult this would be and he did not really attempt to change the
culture in the right way. As noted previously, Jager tried to order change to
come about, rather than leading it. P&G’s culture is famous for its ability to
engrain an employee mind set. And this culture has survived for 166
years. It wasn’t going into the night easily. Had Jager moved to create a
more organic culture, he might have been successful. But just how he
envisioned the eventual culture is unclear. When you examine Figure 1 in
this article, you will note that shared values—culture—are at the hub of the
model. Jager missed this point of centrality.
Furthermore, when you ask employees to make a 90 degree turn in organizF
ational culture, you have to communicate over and over and over why this
has to be done, and how; and you have to involve the employees in the
changes if you want them to be successful. Finally, research also shows
that change is most easily processed by people if it appears to be less change
than it really is. If the 90 degree change can be seen as a 30 degree change,
and better yet as a modification of past actions, then it is easier for the
change to be accepted by employees. Jager declared a wholesale change was
in store which made everyone uncomfortable (Huy, 1999).
12 J. M. Higgins
8. Strategic Performance: The strategic objectives set by Jager were challenging,
but unfulfilled. It was after the third profit warning that he was forced
into retirement.
Jager’s failure was partly caused by moving too quickly to try to do too much
too soon; it was partly a failure to align the ‘S’s; especially his leadership
style and culture; and finally it was after all a failure to communicate. It would
appear that Jager aligned structure, many systems, part of staff and resources
appropriately. For any CEO or other strategic leader to be successful, they must
ask themselves what each of the ‘S’s should be like in order for strategy to
succeed. In some cases Jager did this, and in some he apparently did not.
A.G. Lafley, who followed Jager as CEO, also believed in the need for making
major radical changes in the organization. In fact he and Jager agreed on many
if not most of the changes Jager made. But Lafley had a leadership style that
focused not on what was wrong with P&G and what was wrong with the employf
ees at P&G (as did Jager) but rather on how the company could beat the
competition and better satisfy the customer. He also understood just how far he
could move the culture and worked for change within the existing culture at a
level of change that employees felt comfortable with. Furthermore, he worked
tirelessly to communicate the need for change and to sell the change program.
Ironically under Lafley P&G has experienced tremendous success developing
the kinds of new products that Jager had hoped to produce although Lafley
de-emphasized product development and focused on brand management. Lafley
suggests that part of this success can be attributed to asking employees to do
what they do best, brand management, and integrating product development in
that setting rather than as an end all function unto itself. Finally, his financial
results have been only slightly short of spectacular (Berner, 2003; Brooker, 2002).
The major lesson here is that mis-alignments can lead to failure, especially
mis-alignments of leadership style and culture. And we must not forget that a
failure to communicate is really a failure of leadership. One of the leader’s key
skills is communication. While most of Jager’s alignment actions were sound,
those related to leadership and shared values were not. And those critical
deficiencies were enough to forestall success. Lafley complemented Jager’s
realignment actions with appropriate style and cultural realignments, thus
leading to success.
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