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Chapter 8. Build Execution into Strategy. Milos Kustudija , Dustin Pace, Matt Zaney. A company is everybody. From top executives to line employees. When all employees support and are aligned around a strategy, that is when a company can stand apart as great consistent executor.

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Chapter 8

Chapter 8

Build Execution into Strategy

MilosKustudija, Dustin Pace, Matt Zaney

A company is everybody
A company is everybody

  • From top executives to line employees.

  • When all employees support and are aligned around a strategy, that is when a company can stand apart as greatconsistent executor.

  • Trust and commitment must create an environment that motivate people to execute the strategy.

  • Build execution into strategy from the start.

    • Especially in blue ocean because trepidations builds as people are less involved.

Fair process is key….

Poor process can ruin strategy execution
Poor process can ruin strategy execution

  • Poor process can lead to sabotage

  • Increase risk

  • Employees will fight against change if not

  • properly introduced or instructed on the

  • strategy.

  • Example: Lubber sales reps

    • Were not included in the execution of strategy, and sabotaged sales with clients.

The power of fair process
The Power of Fair Process

  • Procedural justice: people care as much about the justice of the process through which an outcome is produced as they do about the outcome itself.

  • Managerial expression – people need to buy in up front.

    • Get employees involved early.

    • People trust that a level playing field exist.

  • Employees will cooperate voluntarily.

The three e principles of fair process
The Three E Principles of Fair Process

  • Engagement:

    • Involving individuals in the strategic decisions by asking them for their input.

    • Builds better collective wisdom.

    • Greater commitment from all involved.

  • Explanation:

    • Everyone involved and affected should understand why final strategic decisions are made as they are.

    • People know their opinions have been considered.

    • Enhances learning.

  • Expectation Clarity:

    • After a strategy is set, managers state clearly the new rules of the game.

    • Political jockeying and favoritism is minimized.

    • New goals and milestones are set.

A tale of two plants
A tale of Two Plants

  • Elco

    • Elevator systems manufacturer.

    • Domestic demand falling, elevator industry declining.

  • Blue ocean strategy – go from batch manufacturing to a cellular approach

    • Allow self-directing teams to achieve superior performance.

  • Two plants:

    • Chester plant

    • High Park plant

Chester plant
Chester Plant

  • Exemplary employee relations

  • Decertified their own union

  • “They were the ideal workforce”

High park plant
High Park Plant

  • Strong union

  • Resist change

  • Needed Chester plant to build momentum for High Park Plant.

Which plant took the new manufacturing process better
Which plant took the new manufacturing process better?

  • High Park plant accepted the new process

  • Chester plant let to disorder and rebellion.

  • Why did this occur.

No fair process at the chester plant
No fair process at the Chester Plant

  • Failed to engage employees in the strategic decisions.

    • Consultants were briefed to have no involvement with employees.

  • Chester employees were not introduced to consultants who would implement new system.

    • Consultant dressed differently, in black suits and ties.

  • Fear off layoffs

    • Employees brought newspaper clippings of plants that had been shut down around the country

  • Plant manager absent

    • Did not explain why new system was being implemented

    • Neglected to tell employees what would be expected of them

Chester plant1
Chester plant

  • Employees felt undermined.

  • Fights erupted.

  • Refused to work in groups.

  • No trust.

Fair process as high park plant
Fair process as High Park plant

  • Introduced consultants to employees right at the start.

  • Engaged employees in plant wide meetings.

    • Discussing declining business conditions and how new strategic change would help break from the competition.

    • Announced pro-action time policy so employees would not fear layoffs.

  • Worked with employees to develop new goals and establish new responsibilities.

  • Employees spoke of their plant manager with admiration.

Why does fair process matter
Why does fair process matter?

  • Individuals seek recognition of their value.

  • Seek recognition that their ideas are sought after.

  • Intellectual and emotional recognition that fair process conveys.

Intellectual and emotional recognition theory
Intellectual and Emotional Recognition Theory

  • When individuals feel recognized for their intellectual worth, they are willing to share their knowledge.

  • Violation of fair process – violation of individuals intellectual and emotional worth.

  • This can lead to sabotage – “You don’t value my ideas. So I don’t value your ideas, nor do I trust in or care about the strategic decisions you’ve reached.