Volume 10, Number 12
Your Investment in Strategy Being Wasted in Execution?
Consulting Team is a strategic planning, leadership development,
and experiential learning firm.
Over the past
decade, we have watched many different companies attempt to
implement new strategies designed to help them better fulfill
their purpose. We have been struck by the fact that many create
great plans for their future, but fail to implement them. When
this happens managers and employees stuck in the following
dilemma: “We tried to implement our strategy, but are getting
results we didn’t intend and don’t want, and now we lack
confidence that we can get the results we had hoped for.”
Below we present
six short cases illustrating common dilemmas faced by executives
and managers who are attempting to change strategic direction. In
these cases, we tell the story and our diagnosis of the situation.
See if any of these cases are familiar to your experience.
new strategy is not being implemented by senior managers.
A large banking
company has recently sharpened its focus from 30 major strategic
initiatives to five. The reasons for the change are clearly
understood by a handful of executives, but not understood at all
by the rest of the company. The executives who do understand have
been giving speeches, writing newsletters, and conducting strategy
meetings to inform people of the new focus, but this has made no
discernible difference in the behavior of most of the managers.
From the managers’ points of view, they can
Diagnosis: There is no common understanding of what the desired future state
is, so there is no compelling reason for the managers to change
their behavior. This is particularly true given that the managers
can still be successful in the short term by doing things the old
way. A method must be developed to help all of the managers see
what the desired future state goals are and why it is important
for the bank to reach those goals.
several layers down do not understand a new strategy.
management team of a very large division in an electronics firm
commits itself to a new direction. The management team writes a
plan and creates a compelling vision and the strategic initiatives
needed to get there. The whole plan is consistent with the
company’s reputation for excellent planning. The executive team
agrees on how they are to spread the word throughout the rest of
the organization. As the general manager talks to people three or
four levels down, however, he realizes that these people do not
fully understand the plan nor are they at all committed to it.
Furthermore, they see many faults with it. Yet, when he talks to
his executive team, he finds that they have been holding meetings
and broadcasting the new direction as planned. After all of the
work the senior management team has done to get the word out, they
end up being frustrated by the lack of progress towards the new
Although there is a plan for moving the message of the new
direction throughout the firm, there is no mechanism for getting
feedback to the executive team. When inevitable problems arise
with the new direction, managers are faced with a choice: they can
behave as they would have before the new strategy was announced or
they can attempt to problem-solve and move forward. Unfortunately,
if they choose to problem-solve, they inevitably create further
problems because they are working from a too- narrow perspective.
through several cycles of attempting to solve problems, which only
create further problems, these managers soon figure out that they
can resolve their dilemma by reverting to the old way of doing
things and waiting to see what happens. In order for strategic
change to move forward, the executive team must create a forum
where such problems can be worked out.
of managers not congruent with new strategic initiatives they have
A large financial
services organization goes through a strategic visioning process
where 200 key managers are presented with a complete vision and
the strategic initiatives needed to get them to the new, desired
future state. Over the course of nine months, the managers are
exposed over and over to the new goals and initiatives; they
discuss them and argue about them, and they work on figuring out
how the strategic initiatives will affect them, how divisional
clashes could occur and how the organizational structure could get
in the way.
Based on the
managers’ responses, the executive team decides to reorganize
and works on the new structure with the 200 key managers. At the
end of this process, the managers realize that they and their
people are still not implementing the new initiatives even though
they understand what they are and why they are important. People
find it hard to give up the old ways of doing business that were
successful and to try new business practices that, while making
sense, have outcomes that are still unknown and could negatively
impact their performance.
agrees on the new direction, they also find their plates
overloaded because their old responsibilities have not been
Even in the best change introductions, people go through a period
of “looping back” behavior where some of the time they try new
things and some of the time they fall back on old habits and
behaviors. This is accentuated when there has been no analysis of
what duties the managers no longer have to perform: the managers
feel they have to do everything they used to do as well as take on
new responsibilities. This company needs to work with all layers
of management to identify those actions that have been made
obsolete by the new direction and make it clear that managers are
no longer responsible for them. They also need to continue to
reinforce the strategic vision and initiatives at all levels of
implementation plans for new business opportunity.
manager of an electronics firm’s world-wide customer support
organization decides to expand his support services to include
equipment made by other vendors. They have written a business plan
that looks at the markets and the investment involved; they have
determined it is a business they can be a major player in. The
customer support management team—global in scope—hears the
decision, but has no clear idea how to proceed with the myriad
details necessary to implement the new strategy. Field operations
become more and more complex and difficult; customer complaints
increase. Employees blame the problems on the other vendors: from
their perspective, none of these problems would be happening if
other vendors’ equipment and documentation were as good as their
own. Vendors claim it is a competency issue.
The implications of the change have not been thought out at any
level of management; there is an incomplete understanding of the
gap between how the company does business now and how they want to
do it in the future. This gap will have to be explored and
understood; plans for closing the gap will have to be made. The
planning process will have to move from senior manager levels out
to field management where local problems can be worked out.
working at cross purposes.
integrated computer hardware manufacturer has divisions which
sometimes end up bidding against each other for large contracts.
This has continued to happen ever since the firm broke itself into
autonomous business units each responsible for its own profit and
loss. From each division’s point-of-view, this competitiveness
is rational behavior in light of the measures used to evaluate the
corporate management perspective, this strategy doesn’t make
much sense because there is almost always a greater benefit to the
company from one bid proposal than from the other. They are
rightly concerned that current policy is confusing to the
company’s customers and is preventing them from seeing the
company as a unified whole. Corporate executives fail to see why
the divisions cannot resolve these problems themselves and dislike
having to frequently intervene with the divisions to resolve
This company has set up a structure that encourages competition
between divisions. While this could be an important mechanism to
sharpen divisions’ sales and marketing efforts, there needs to
be an overarching vision of how divisions can cooperate. This
corporate-wide vision must include a plan that addresses how
customers will view the entire company so that people in the
divisions can see beyond their own parochial interests.
in a department unable to create strategic goals for themselves.
A product support
manager and his 20 people attempt to create a vision for their
group to help the members keep focused so that he can spend less
time directly managing his people in day-to-day operations. The
product support manager found that he and his group cannot come up
with a clear vision of their desired future state because they do
not know what actions they need to take to support the
division’s plans. The manager approaches his VP to see if there
is a clear statement of where they were headed. The VP realizes
that her division needs to be clear on its strategy so that all
the departments are able to take action to support it instead of
having to find their own methods.
However, she also
realizes that her goals have been shifting with the market and the
whole company. She is not certain if she should attempt to set
strategic goals with her own people or if she should first attempt
to engage the entire senior management team to set new goals for
This company has let its strategic goals go stale. The market is
shifting quickly and the company has been slowly changing its
strategy to move with it. There has, however, been no move by the
executive management team to formalize the shift or to change the
desired future state of the organization. Before teams within the
organization can set their own strategic goals, the company needs
to determine where it wants to be several years from now and what
important initiatives are needed to get there. That vision can
then be spread throughout the organization so operating teams can
set goals for themselves that support the larger effort.
There is one
overall theme common to how well-run corporations stimulate and
manage change: they have a
well-defined purpose for existing that is understood by most