Professional Documents
Culture Documents
(2003),"Translating strategy into effective implementation: dispelling the myths and highlighting what works", Strategy & Leadership,
Vol. 31 Iss 3 pp. 27-34 http://dx.doi.org/10.1108/10878570310472737
(2001),"Implementing a strategy successfully", Measuring Business Excellence, Vol. 5 Iss 4 pp. 4-6 http://
dx.doi.org/10.1108/13683040110411223
Access to this document was granted through an Emerald subscription provided by emerald-srm:235887 []
For Authors
If you would like to write for this, or any other Emerald publication, then please use our Emerald for Authors service information about
how to choose which publication to write for and submission guidelines are available for all. Please visit www.emeraldinsight.com/
authors for more information.
About Emerald www.emeraldinsight.com
Emerald is a global publisher linking research and practice to the benefit of society. The company manages a portfolio of more than
290 journals and over 2,350 books and book series volumes, as well as providing an extensive range of online products and additional
customer resources and services.
Emerald is both COUNTER 4 and TRANSFER compliant. The organization is a partner of the Committee on Publication Ethics (COPE) and
also works with Portico and the LOCKSS initiative for digital archive preservation.
Joseph F. Michlitsch
Joseph Michlitsch is an associate professor of management at Southern Illinois University Edwardsville, where he
teaches strategic management. Dr Michlitsch consults in the areas of strategy formulation and strategy implementation
for businesses and not-for-profit organizations.
Abstract Strategy implementation is best accomplished through benefit. However, this conclusion assumes that the
high-performing people. Every organization must develop and retain overarching strategy is being well implemented.
its high-performing employees who are focused on giving target Herein lies a dilemma. While a company's leaders
customers what they want. Key performance factors are explored may devise the strategy, it is employees ± all of them ±
including clear mission and strategy, selection and training, who will implement the strategy. It is ironic that, even
corporate culture, communications and information, and rewards.
though more people now agree that employees are
important, company leadership continues to focus on
Keywords Strategy, High-fliers, Employee relations, only some of its employees ± the managers. There still is
Corporate Culture, Loyalty
a wide separation between managers and the rest of the
employees, reinforcing an ``us and them'' attitude.
I
Managers often have private dining rooms; employees
t is obvious that every company needs a mission
do not. Managers sometimes get stock options;
and strategy that are right for its customers and its
employees do not. Managers get bonuses; employees do
owners/stockholders. By identifying target not. Successful implementation of strategy requires a
customers and giving them what they want, the company
rethinking of this dichotomous paradigm.
will be successful in the long run, and owners will
S t r a t e g y & L e a d e r s h i p 2 8 , 6 2 0 0 0 , p p . 2 8 - 3 3 , # M C B U n i v e r s i t y P r e s s , 1 0 8 7 - 8 5 7 2
2 8
The importance of high-performing, loyal employees companies for as little as 10 percent more pay. More
Chief executive officers like Herb Kelleher at Southwest than 50 percent would leave if they could earn a 20
Airlines and Fred Smith at Federal Express have been percent increase. These data indicate all-time lows in
quoted as saying something like, ``Our people come first, company loyalty, which is mostly attributable to people
even before our customers.'' They can hold this belief believing that they are working more but enjoying it less.
because they know their employees take care of An America@Work study from 1995 to 1998 found
customers in the ``right way'' ± they understand what that[4]:
customers want and deliver it. This completes the circle. ^ the percentage of employees working more than 50
A company must develop long-term relationships that hours per week doubled, rising from 13 percent to
are profitable for both the customers and the company. 26 percent;
It is essential that employees be able and willing to foster ^ the percentage of employees reporting burnout rose
these relationships over time. from 39 percent to 53 percent;
Employees who do this are valuable and, hopefully, ^ the average number of workdays lost to job-related
loyal. They like their jobs and plan to stay with the stress rose by 36 percent, from 1.1 to 1.5 days per
company. Some turnover is desirable, of course, as it year; and
removes those who are not able or willing to serve ^ over the past three years, workdays lost to care for
customers as the strategy requires. For example, Cisco children or elderly people because daycare was not
Systems trims the bottom 5 percent of its employees each available rose from 3.5 to 4.6 days.
year. The ones who go are those who do not add value In light of these data, how can you build a workforce that
Downloaded by University of Wollongong At 11:51 29 April 2016 (PT)
(based on objective performance measures) or do not fit is valuable and loyal? There are many factors, strategies,
the culture. At Southwest Airlines and Nucor Steel, tools and behaviors that interact to create high-
people who do not perform well or do not fit the culture performing, loyal employees. Key among them are:
leave either voluntarily or are forced out by peer pressure. mission and strategy, selection and training, company
Cultivating loyal employees who serve customers well culture, communication and information, and rewards.
is financially sound. Studies have shown that companies With the right mix of these factors, you can develop a
that emphasize developing and retaining employees have workforce that has the skills and commitment to help
better results than companies that do not. They have your company succeed (see Exhibit 1).
higher stock price to book value ratios, market values per
employee that are $41,000 higher, five-year annual
Mission and strategy
returns of 27.5 percent compared to 17.3 percent, and a
In his book, The Loyalty Effect, Frederick Reichheld
higher five-year survival rate of initial public
makes a compelling argument for the indispensable
offerings[1,2].
There is other evidence that loyal employees add to
the value of a company. Attracting and retaining the very
best people is one of the eight most important things that Exhibit 1 Ð Developing high-performance loyal
investors use when judging the value of a company, employees
according to research by Ernst & Young. Looking at it
from the other side, over 50 percent of the respondents
in a Mercer Management Consulting study said that
poor customer service and lost customers are the result
of not being able to attract and retain the right people.
From a broader perspective, Andersen Consulting found
that three-fourths of the executives it surveyed listed
human performance as more important strategically
than productivity and technology. Attracting and
retaining people will be the No. 1 issue in strategy by
2010, according to 80 percent of these managers.
Internet companies say that attracting and retaining the
right people is the primary issue for them already[3].
Contributing to the increasing importance of, and
difficulty in, attracting and retaining the right people is
the decreasing loyalty and commitment of employees in
every age, income group, job classification, and industry.
Loyalty, or commitment to the company, has been
decreasing through the 1990s. In a 1998 study, 25
percent of US workers said they would leave their
S t r a t e g y & L e a d e r s h i p 2 8 , 6 2 0 0 0
2 9
interaction among loyal customers, loyal employees, and developing them over time. But the first step is to define
loyal investors/owners[5]. The foundation for these what ``right'' people means for a given company.
interactions is creating value for customers ± selecting a Companies like Southwest Airlines, Dell Computer,
good target market and turning that market into loyal and Enterprise Rent-A-Car have done much research to
customers by understanding what they want and then by determine what it takes to succeed within their
delivering it better than anyone else. This means companies. In addition to functional and technical skills,
developing and implementing the right mission and these companies identify the personal characteristics and
strategy. interpersonal skills that are related to success. Among
It is clear that successfully implemented strategy will, other things, Southwest Airlines employees must be
in the long run, result in attractive financial returns, creative and thrive in a team atmosphere. Employees at
hence loyal investors. However, this factor is also Dell Computer must be able to work well on teams, have
inextricably connected to having committed, high- a high tolerance for ambiguity and change, and be able
performance employees. to learn rapidly. Enterprise Rent-A-Car uses an
A clear, compelling ``enterprise quotient,'' or
mission and a strategy EQ, to test for emotional
backed by constancy of intelligence. The 15-
purpose has a very item EQ uses situational
high probability of questions to assess self-
being successful. awareness, persistence,
Downloaded by University of Wollongong At 11:51 29 April 2016 (PT)
S t r a t e g y & L e a d e r s h i p 2 8 , 6 2 0 0 0
3 0
promoted and earn total compensation approaching Exhibit 2 Ð Creating flow
$50,000 within a year and a half.
In all of these companies, the culture includes high-
performance expectations. This fact alone may be
unattractive to potential employees who would not fit
within the company. It will, however, be very attractive
to the ``right'' people. For example, new hires at
Enterprise are expected to work ten-hour days. At Dell
Computer, new hires are given specific performance
goals that they must reach within the first 30 days.
All the companies that have succeeded in developing
high-performance employees spend significant time and
money on training. Training takes many forms,
including formal presentations and workshops, informal
monthly chat sessions, one-on-one exchanges with a
supervisor, mentor or knowledgeable person, and
performance appraisals. Federal Express's training
accounts for 3 percent of its total expenses ± six times as
much as similar companies. All employees are included
Downloaded by University of Wollongong At 11:51 29 April 2016 (PT)
S t r a t e g y & L e a d e r s h i p 2 8 , 6 2 0 0 0
3 1
It is not only the young computer and Internet Rewards
companies and ``weird'' Southwest Airlines that include Companies with high-performing employees ``put their
fun as part of their culture. A.G. Edwards is a very money where their mouth is.'' They pay employees for
successful, well-respected, financial investment performance.
company. Ben Edwards, the company's CEO, said that Some companies, but certainly not all, pay beginning
one of their corporate goals is to have fun[5,8]. He wages and salaries that are above-market. Supplies
believes that fun helps to build respect and, when people Network does this, as do some of the fast-growing
treat each other with respect, they work well together. Internet companies like DoubleClick and Cisco
Fortune magazine listed A.G. Edwards as one of the 100 Systems. Even though these companies pay relatively
best companies to work for and cited Mr Edwards as high beginning salaries, much of an employee's total
kindly and accessible. John Chambers of Cisco Systems compensation comes from bonuses based on
has breakfast once a month with employees whose performance. Edward Jones, A.G. Edwards, Dell
birthdays fall in that month. Enterprise Rent-A-Car Computer, Cisco Systems, and Supplies Network pay
rented Busch Stadium in St Louis for an employee party bonuses three or four times per year, which keeps
complete with circus performers, food, and games. everyone focused on performance.
The end result is that egalitarianism and fun break An increasing number of companies use stock options
down the barriers between people. Managers are more as a financial reward, and they award stock options to
accessible, and communication improves. As part of the employees other than the top management team. In a
culture, they contribute to enthusiasm, to a sense of recent study of 350 large US companies, Mercer Inc.
Downloaded by University of Wollongong At 11:51 29 April 2016 (PT)
urgency in pleasing the customer, and, ultimately, to found that 39 percent of the companies had a broad-
company success. based, stock-option plan in 1999 compared to only 17
percent in 1993. A broad-based, stock-option plan
Communication and information means that half or more of employees are covered. This
People need to know what they are supposed to do if trend is in line with the expectations of the current
they are to have any chance for success. They need to workforce. As John Chambers, CEO of Cisco Systems,
know what the customers want and what steps to take to says: ``People used to work for wages. In the new
satisfy them. They need information! Jan Carlzon, the economy, they work for ownership''[9].
successful former CEO of Scandinavian Airlines, put it The trend of extending stock options beyond senior
this way: ``An individual without information cannot management suggests that there is at least a symbolic
take responsibility; an individual who is given egalitarianism in a growing number of high-performing
information cannot help but take responsibility.'' companies. Other forms of egalitarianism can be seen in
Beyond communicating the company's mission and the trend in executive base pay. For example, Andy
strategy, managers must set goals and performance Taylor, CEO of Enterprise Rent-A-Car, receives a base
expectations, provide feedback and direction, and hold salary of only $35,000. This does not mean to suggest
people accountable for achieving their goals. that everyone, regardless of position, should be paid
A number of organizations use continual interaction equally. It does mean that everyone in the company can
between employees and managers to communicate and be rewarded according to his or her achievements and
share information. The Michigan Retailers Association that a lower-level employee will not be excluded from
holds a catered, staff breakfast after its board of directors certain rewards just because of the lower rank.
meetings to pass on information about policy actions, There are also rewards other than financial. Many
results and developments. Theresa Garza at Dell makes people believe that simple recognition is a reward sought
sure to articulate her group's objectives on at least five by many employees. Rosabeth Moss Kanter says that
occasions during the first two weeks of each quarter. She money is not necessarily motivating because many see it
argues that not only does this help people to achieve as a ``right,'' whereas recognition is a ``gift.'' The founder
their goals, but it reduces frustration and ``politics.'' of Mary Kay Cosmetics, Mary Kay Ash, agrees, saying
People need to know what they are expected to do that people want to feel important based on the work
before they even begin. Then, information about both they do. Frances Hesselbein, president of The Drucker
positive and negative outcomes helps employees to Foundation, says people want to feel that what they do
understand accountability. Knowing the positive results makes a difference and only recognition can give them
of their actions can be motivating, while information this feeling[10].
about negative outcomes can help them learn. And in a Reward employees for doing a good job ± for
culture where they are rewarded based on performance, engaging in behavior that achieves the mission and
employees need accurate and up-to-date information in strategy of your company. Find out what motivates your
order to make good decisions. employees, and then give it to them. It could be money,
but it could also be things that do not cost anything
except time, concern and recognition. Above all,
S t r a t e g y & L e a d e r s h i p 2 8 , 6 2 0 0 0
3 2
remember that you get what you reward, so be sure you References
reward performance that is aligned with the mission and 1. Friedman, B., Hatch, J. and Walker, D., Delivering on the
strategy. Promise: How to Attract, Manage, and Retain Human Capital, The
Conclusion Free Press, New York, NY, 1998.
High-performing, committed employees who serve 2. Grant, L., ``Happy workers, high returns'', Fortune, 12 January
customers well are valuable to your company. You can 1998.
3. Byrne, J., ``The search for the young and gifted: why talent
increase the probability that you will have such
counts'', Business Week, 4 October 1999, pp. 108-16.
employees in several ways. Develop a clear, compelling
mission and strategy. Select and train the right people. 4. Strum, D., ``Workforce commitment: strategies for the new work
Explain the mission and strategy to your people and give order'', Strategy & Leadership, January/February 1999, pp. 4-7.
them the information they need to understand 5. Reichheld, F., The Loyalty Effect, Harvard Business School Press,
information so they can do a good job. Embed 6. Finnie, W., Hands-On Strategy: The Guide to Crafting Your
Company's Future, 2nd ed., Grace & Company PLC, St Louis,
company goals in a strong company culture. Reward
MO, 2000, p. 143.
people for doing what you want them to do ± for
7. Csikszentmihaly, M., Flow: The Psychology of Optimal Experience,
successfully achieving the company's mission and
Harper & Row, New York, NY, 1990, p. 74.
strategy. S&L
8. Dalin, S., ``Three workplaces here on `best list''', St Louis Post-
Dispatch, 22 December, p. C6.
Downloaded by University of Wollongong At 11:51 29 April 2016 (PT)
S t r a t e g y & L e a d e r s h i p 2 8 , 6 2 0 0 0
3 3
This article has been cited by:
1. Chi Ying Ieong, Desmond Lam. 2015. Role of Internal Marketing on Employees’ Perceived Job Performance in an Asian
Integrated Resort. Journal of Hospitality Marketing & Management 1-24. [CrossRef]
2. Tilottama G. Chowdhury, Sreedhar Madhavaram, S. Ratneshwar, Rhetta Standifer. 2014. The appropriateness of different modes
of strategy from a product-market perspective. Journal of Strategic Marketing 22, 442-468. [CrossRef]
3. Ji-Seon Jeon, Gyu-Jin Chae, Mun-Yong Choi. 2014. Impact of Flight Attendants' Emotional Intelligence on the Service Quality
and Organization. Journal of the Korea Academia-Industrial cooperation Society 15, 735-744. [CrossRef]
4. YuKyoung Kim, Ki-Joon Back. 2012. Antecedents and consequences of flight attendants' job satisfaction. The Service Industries
Journal 32, 2565-2584. [CrossRef]
5. Ahmad Al-Tameem, Mohamed Zairi, Mumtaz KamalaCritical factors of information security implementation 379-385.
[CrossRef]
6. Jerald Hage, Gretchen Jordan, Jonathon Mote, Yuko Whitestone. 2008. Designing and facilitating collaboration in R&D: A case
study. Journal of Engineering and Technology Management 25, 256-268. [CrossRef]
7. Donald L. CaruthProfessor of Management at Texas A&M University – Commerce, Commerce, Texas, USA John H.
HumphreysAssociate Professor of Management, at Texas A&M University – Commerce, Commerce, Texas, USA. 2008.
Performance appraisal: essential characteristics for strategic control. Measuring Business Excellence 12:3, 24-32. [Abstract] [Full
Downloaded by University of Wollongong At 11:51 29 April 2016 (PT)
Text] [PDF]
8. Hon-Kwong Lui *, Yui-Tim Wong. 2005. Do loyal subordinates get higher wages? Experience from China. Applied Economics
Letters 12, 649-652. [CrossRef]
9. W.F. SzetoHong Kong Shue Yan College P.C. WrightHong Kong Shue Yan College. 2003. Searching for an ideal: a cross‐
disciplinary study of university faculty performance evaluation. Equal Opportunities International 22:8, 54-72. [Abstract] [PDF]