Customer Reviews

Making Strategy Work: Leading Effective Execution and Change

5 star:		(21)
4 star:		(5)
3 star:		(1)
2 star:		(0)
1 star:		(0)

 

 

I have often felt that many times the leadership of a company or even division was all about defining the strategy, where are we going and what are the overall goals. It was then up to the next level of management to make it happen. I am a manager and like most managers I have had a few occasions when I new where we should be going, I felt I clearly set the direction, but something in the execution failed and we did noting but waste a lot of time to get half measures. The world is full of good plans that failed due to poor performance. This book explains that a true leader needs to keep the execution of the strategy in mind when creating the direction. Combine the two and get your hands dirty in the working of the plan. This book is all about getting the job done, covering the processes and actions that need to get done to make solid strategies work.

The author created this book from real life experiences, either his own or those of case studies and interviews. He is giving the reader solid techniques derived from real world examples that were a success. I also got a great deal out of the final chapter. The author shows the reader how to apply what he has detailed in the book into a real life problem. Making a strategy come together and really work is either good management or luck and most of us are not that lucky. This book gives you the tools for making strategies work. What I liked about the book is even though the author is aiming for the CEO chair with the book, the methods he talks about could be used by any level of management on any size of project. The book is well written and enjoyable. It is well work your time.

Corporate strategy was a relatively new subject when I first became a strategy consultant in 1971. I remember executives picking bad strategies right and left and being totally clueless about how to implement a good strategy if they happened upon one.

Making Strategy Work is a good reminder that there are still organizations out there that have never picked a strategy that worked or implemented a workable strategy successfully. Yet these organizations are full of graduates of the most stellar business schools who know all the strategic management and planning lingo.

Professor Hrebiniak starts with the academic strategic lingo and clearly distills the key lessons of choosing and implementing strategies into bite-sized pieces for large organizations to implement.

It's not surprising that this book is filled with examples from the old AT&T and its remaining pieces, General Motors, Sears and other organizations known for their strategic problems. Mr. Hrebiniak has been there and done that in consulting for such organizations for many years, and describes their mind set well.

Naturally, if you are of more innovative and entrepreneurial orientation, you won't find this book nearly as interesting. But it's an important contribution to the literature that I'm surprised that someone didn't write long before now.

Well, they sort of did write this book before now. You can find pieces of this book in various books and articles . . . but Making Strategy Work is a convenient place to find all of those pieces in one place . . . for those who haven't developed and implemented a successful strategy before to get a sense of what they should be doing.

Based on the experiences of managers, the book focuses on the knowledge, skills and capabilities managers need to execute strategy. It presents an integrated approach, presenting and detailing key execution decisions, incorporating central change-management issues. The final chapter shows how to apply the logic, insights, and guidance presented in this work. Of special note is that one chapter is devoted to motivation, incentives, and the control process encompassing accountability, responsibility and leadership. If you want a book to help guide turning your strategic plan into performance and profits, this book is right on target. Highly recommended.

I've read a lot of business books. Usually they all say the same thing. "Making Strategy Work" is different. Rather than focus on "strategy formulation" or on "execution", the book LINKS strategy formulation with execution. A professor at Wharton Business School, Larry Hrebiniak does an excellent job laying out the building blocks for assembling an execution-focused organization in simple language, and supplement his approach with numerous case examples. There are many important messages in the book, almost one on every page. This book is the missing link that makes a difference between successful strategy and one that fails. A very important guide for every CEO.

Lawrence Hbrebiniak's "Making Strategy Work" is billed as a comprehensive roadmap and process model for executing strategy. This is absolutely what this book contains. Giving excellent examples from top firms like GE and Dell, the author lists the processes to use in simple to complex business situations where the executive manager can lay out a plan to execute their business strategy.

Executing strategy is by no means easy. This is why good managers get the top bucks. Along the way from plan to accomplishment are a number of difficult roadblocks. Not the least of these is communication. The chapter on coordination and communication follows the chapter on organizational structure. This is not by accident. A proper structure allows the flow of vital information down and up.

First and foremost, however, is having the right strategy in place. A decision to fund a feeble project is not going to have a happy outcome, no matter how efficient the organization and clever the execution. Corporate culture is another important factor, and Professor Hrebiniak doesn't neglect to discuss in a very clear way how a corporate culture must be managed to effect a good strategic plan. If you look at some of the notable failures in the last 10 years in some Fortune 100 firms where change in strategy was vital, not a few of the lapses were due to a failure to assess and manage changes in the prevailing culture. The author links culture and behavior: shared values and norms--"The way we do things"; A common vision /Credo--"How we compete" "How we treat each other"; common goals and incentives-- and "Risk Taking and Innovation." The author points out how mergers and acquisitions are strongly affected by corporate culture and gives models for changing and reinforcing behavior. A start-to-finish case study of a merger/acquisition is included, a tremendous resource.

I cannot think of another book that is more direct and to the point about this subject. This should be on the bookshelf of every manager in every organization, whether for profit or not-for-profit. Absolutely essential reading. Highly recommended.

Joanna Daneman

Volumes have been written about the theoretical and practical frameworks against which senior executives in large companies can run their operations. But in the end, executives are faced with the straightforward task of simply getting things done. Execution is key to every successful project or implementation, and yet, oddly enough, it's in this area that Lawrence Hrebiniak, professor at the Wharton School at the University of Pennsylvania and business consultant to many Fortune 500 companies, believes too many business leaders fall short. And few companies have developed a disciplined approach to it.


In his new book Making Strategy Work (Wharton School Publishing, January 2005), Hrebiniak says that many of today's top executives are far better at developing strategy than executing it and overcoming the political and organizational obstacles that stand in their way. Senior executive editor Patricia Brown spoke with Hrebiniak about overcoming the obstacles to execution and how CIOs can build systematic road maps for tackling it.

Q: You write that execution has been an issue for executives for more than 20 years. Why is it so difficult to bridge the gap between strategy and execution?

A: Execution represents a disciplined process that enables an organization to take a strategy and make it work. One of my arguments is that we've put out a whole class of MBAs in management who are well-versed in planning and conceptually brilliant, but who are very weak in terms of even the theory and the approach to execution. They have to learn about execution on the job.

In the absence of appropriate guidance and conceptual models, many managers jumped into execution head-first and did a lot of things wrong. Only recently have people started thinking, "If we execute better, if we integrate long term and short term better, if we translate strategic objectives into short-term objectives, if we worry about incentives and controls and feedback, we'll execute better, we'll perform better, and we might even gain a competitive advantage because very few people in other companies are so well-versed in execution."

Also related to execution is integration. People gain knowledge in buckets. For example, if you're a marketing person, the whole world becomes a marketing problem. Because of this, we need more integration. We need someone with a perspective, someone who understands various functions and parts of the company. The ability to integrate is essential to execution, and managers who can do this are very tough to find.

Q: Can CIOs play a role in providing this integration?

A: A CIO or senior-level IT employee can provide integration, provide the data-the kinds of things that back up the models of execution we're working with. If I develop a model of execution, I'll need to change the [corporate] structure in a certain way. For example, I create a need to move goods or knowledge around the world from unit to unit, from organization to organization. I've now created an IT issue. I need someone well-versed in information-knowledge transfer. Information sharing becomes a critical part of that execution plan or strategy. The IT people or the CIOs are becoming increasingly important because of this need for integration that we're finally waking up to.

Q: Some C-level executives would rather focus on strategy, and they don't believe they're responsible for execution. Are they?

A: Execution demands ownership at all levels of management. From C-level managers on down, people must commit to and own the processes and actions central to effective execution. Some people say there are two processes going on. One is the conceptual process: The brilliant people look at things like industry forces and competitive forces, and come up with new strategies, new ideas, and new products. And once they're done with the smart work, they turn to their subordinates and say, "Here, execute this."

It's that separation of planning and doing that I contend is wrong. It's important that the CEO, just like all managers, have a hand in execution. Strategic success demands a simultaneous view of planning and doing. Managers must be thinking about execution as they're formulating plans; they're part of an integrated, strategic management approach.

Q: Execution requires more people than strategy, but are companies adding the resources necessary to follow through on the execution? Are they growing fast enough to support effective execution?

A: As soon as you start talking growth, you're talking change. You're increasing tasks. You're focusing on different responsibilities. You're entering new markets. You're developing new products. One thing that relates to execution right away is the speed of change. If I implement a big change during a growth spurt and develop new responsibilities around new strategies in new parts of the world, and I do all these things simultaneously, I'm potentially creating problems with growth because speed can kill. If I make too many changes and do too many things simultaneously, I'm creating additional problems for execution.

As companies grow, it's important that they answer questions like: How fast should we grow, how do I ensure responsibility and clear accountability as I'm growing; how do we ensure that we have the right capabilities, including skills, IT, information, and people? What kinds of people do I need? What training do they need?

However, planning a strategy requires fewer people than the execution. Once you start delegating and getting involved in different aspects of execution, you're getting more people involved at lower levels without even growing. Even assuming organizational size remains constant, there's another problem: As you get more people involved, it's harder to control execution.

Here's an example: A financial institution I was working with created a program at the corporate level to better integrate the branches. When the managers went to check on the program at the branches three, four, or five months later, no one knew about the program. The project had failed because no one had stated the objectives to the many thousands of branch-level employees.

To set the objectives and make things clear at the management level is one challenge; to move those things to lower levels is another. You have to focus on communication and focus on ways of integrating throughout the hierarchy.

Your question about growth, size, and people reflected those two different things. No. 1 is running into unclear responsibilities due to rapid growth, and No. 2 is getting people at the lower levels involved in the execution process in some meaningful way.

Q: Since you consider execution a process, is there room in some companies for a chief process officer-someone who can look at divisions horizontally rather than vertically?

A: Yes, execution isn't the result of a single decision or action. It's the result of a series of integrated decisions or actions over time. Some companies have gotten so large and complex that they need someone who literally is in charge of integration and knowledge sharing across functions. So we're beginning to see more of these roles. We're also beginning to see more matrix-type structures where people are integrating, for example, business and country or functions like engineering and projects. That's their job in the matrix- to integrate across diverse measures of performance or different views of the world.

We see that in global companies and in high-tech industries. We're seeing it in companies where we have to integrate knowledge, such as engineering knowledge, across different projects. More and more of the focus is on integration, and this is very consistent with my approach to execution.

Q: Are there a couple of key points CIOs should keep in mind as they begin to develop an execution road map?

A: Organizational structure is very important to execution. Despite its centrality, the role of structure in strategy execution can be problematic. Many of the managers we surveyed for the book argued that structure is often set up or changed for the wrong reasons. Simply put, structure affects real costs and benefits. Different ways of organizing affect outcomes. Process specialization or functional structures, for example, positively affect efficiency via standardization, repetition, high volume, and economies that follow.

Creating a structure, however, is only half the story. For companies to operate effectively and execute effectively, integration or coordination is also needed. Information sharing, knowledge transfer, and effective communication are vital to execution. Poor or inadequate information sharing was rated as a major obstacle in our survey. In addition, for execution to work, all responsibilities and accountability for key decisions and actions must be unambiguous. They must be understood by all managers involved in the execution process.

Another important element of the execution model is incentive and controls. Incentives motivate behavior toward ends consistent with desired strategy-execution outcomes. Controls provide feedback about performance, reinforce execution methods, provide corrective mechanisms, and facilitate change.

Q: Execution requires effective change management, something a lot of CIOs are addressing. Is managing change an execution problem?

A: Yes, I have two chapters on managing change in my book. One is managing change, and the other is managing culture and culture change. They're related, of course, but I separate them because each is so important.

Let me give an example that I find problematic when I look at upper-level managers managing change. Given a large strategic change or the need for change, how do I manage this change? Do I break it down into smaller pieces and do it logically, going through the different parts sequentially, or do I do everything at once? A major conclusion of our analysis is that complex change is difficult and dangerous, often resulting in poor change management and failed execution. When companies are faced with strategic problems, sequential change is preferred. It's logical to break the large change into smaller, more manageable pieces, or elements, and manage change sequentially, focusing on each element only when the previous one is completed. The downside is sequential change takes time, but it's an effective way to handle large changes rationally and methodically.

The other aspect of change is culture change. The biggest mistake managers often make is trying to change culture. They try to convince people to change attitudes. They tell people that something has changed, and they have to act differently. Well, this doesn't work. My argument is in order to change culture, you don't focus on culture; you focus on changing people, incentives, organizational structures and responsibilities, and controls, such as performance appraisals and feedback. By changing the elements of execution, you're changing culture.

---

Obstacle Course

Here's a list of the primary execution challenges, based on discussions with corporate managers.
- Inability to manage change effectively or overcome internal resistance to change.
- Strategy conflicts with the existing power structure.
- Poor or inadequate information sharing among individuals or business units responsible for strategy execution.
- Unclear communication of responsibility and/or accountability for execution decisions or actions.
- Poor or vague strategy.
- Employees' lack of feeling of ownership of a strategy or execution plan.
- Lack of guidelines or a model to guide strategy execution.
- Lack of understanding of the role of organizational structure and design in the execution process.
- Inability to generate buy-in or agreement on critical execution steps or actions.
- Lack of incentives or inappropriate incentives to support execution objectives.

The most elaborate corporate strategy is worthless if it can't be implemented. The key to success is not the planning of strategy, but the execution. Dreams are empty without action and results. Agreed?

The problem in today's organization is the inability to implement a disciplined process for making strategy work in the real world. If corporate leaders were able to execute as well as they can plan, tremendous results could be realized. That's the secret. How can it be done? That's the teaching you'll find in this book. You'll learn lessons that will let you enjoy running circles around your competition-while they're still mired in those beautifully-drawn plans that sit proudly on executive desks waiting for someone to do something.

The author does not suggest that the planning and development of strategy is wrong or a waste of time. Quite the contrary; he's all in favor of it and even devotes a chapter of his book to the wisdom and technique of effective strategic planning. Good planning is the foundation of good execution. Attempted execution of a bad plan will also waste resources and increase risks.

Hrebiniak marches through the strategic execution process like Sherman through Georgia. He gives us the big picture, but delivers detail in process explanations and case studies. The reader will quickly grasp that this author has considerable experiences in the trenches of Corporate America, practicing what he preaches.

Importantly, this book includes valuable-and one might argue, essential-content that is not found in similar volumes. It would be easy to stay on point with all the chapters focused on the message and methods of strategy execution. However, other factors influence how successful companies will be. So, Hrebiniak and Wharton bring us bonus chapters on managing change, managing culture and culture change, and another on power, influence, and execution. Capping the book is an application chapter: Making Mergers and Acquisitions Work.

Consider this publication to be more of a textbook than a read-through management book. It will be highly instructive for your first read, then serve as a keep-on-the-shelf reference book for years to come. Learn its lessons, practice them, and you'll be miles ahead of the competition. Not only can you plan, you can actually get the job done!

We have all experienced it.

The most brilliant and enlightened strategy fails. It is one thing to formulate it: it is quite another to implement it.

Lawrence Hrebiniak, a management professor with the Wharton School at the University of Pennsylvania writes that we should not be surprised. Making strategy work, he writes, is more difficult than strategy making. Sad as it is, managers are trained to plan, not execute. Execution is a process. It takes far longer than formulation. It cannot be accomplished with a few actions steps. It involves more people and to be effective it requires change.

Execution's management challenge, the professor argues, requires attention to overcoming eight obstacles:

1. Models must be developed to guide executive decisions and actions.
2. The creation of a strategy effects its execution and should be detailed.
3. Change - that includes culture change - must be managed effectively.
4. Power and influence must be understood and used for strategy execution.
5. Organizational structures must be fostered that facilitate accountability and information sharing and coordination.
6. Effective controls and feedback mechanisms must be developed.
7. Creation of an execution-supportive culture must be created.
8. Leadership must have an execution bias.

The book concludes with an insightful merger and acquisition case study. Its insights into the execution of this challenge more than justifies the time invested studying Hrebiniak's comprehensive process model contained in this valuable volume.

It's even tougher to execute strategy than to design it. And without effective execution, even the best strategies are worthless.

In 2002, when Larry Bossidy made these points in his best-seller Execution, they seemed revelatory. Three years later, the centrality of execution is so obvious it's nearly a cliché. But there's a big difference between talking about execution and actually improving it.

In Making Strategy Work, Wharton Professor of Management Lawrence Hrebiniak targets that gap. In place of anecdote and guesswork, he offers a disciplined, research-based process model for fully aligning your organization's skills, resources, and culture behind the strategies you define.

Strategy formulation and execution are even more interdependent than many managers realize, says Hrebiniak. Moreover, certain strategy flaws have especially serious implications for execution. One example: the failure to integrate enterprise strategy with strategy at the business or division level.

Consider the company that views one division as a mature cash cow, while that division has identified new opportunities for transforming itself back into a "star." The strategy mismatch leads to wars over resource allocation and performance metrics-and neither the enterprise nor the division executes successfully.

Hrebeniak's model doesn't just illuminate the ways corporate strategy should drive business strategy: it encompasses organizational structure, short-term operating objectives, incentives, controls, and more.

Drawing heavily on the recent Wharton Executive Education Survey, Hrebeniak notes that many companies still fail to structure themselves for effective execution. "Design or redesign efforts are handled badly... Integration or coordination of diverse structural units is poor or incomplete. The link to strategy when changing structure is unclear or often simply missing."

That link is, of course, crucial. Hrebiniak shows how cost leadership, product differentiation, diversification, and growth-oriented strategies each imply different choices about structure. Should you centralize or decentralize? Move towards "process" or "purpose"-based structures? Apply matrix management? While nobody works from a clean slate, his insights will be invaluable in evolving your organization alongside your strategies.

Having discussed how to define operating units, Hrebiniak turns to integrating and coordinating them. One key insight: the types of interdependence that exist amongst your units directly impact your ability to execute.

Consider the case of "reciprocal interdependence," where each unit or function can "change the rules," and even veto the actions of others. In such an environment, it's tough to achieve consensus amongst marketing, engineering, and production. If your strategy is built upon rapid introduction of new products, you'd better pay far greater attention to coordination. Hrebiniak offers detailed solutions-ways to clarify responsibilities and strengthen accountability.

Which brings us to the final element of his model: incentives and controls. Among the topics he covers: making sure you're incenting the right things, and using performance appraisals to support strategy, not undercut it.

Top executives tend to set strategies and then leave the implementation to others. This book sets the path for executive participation in execution, including managing change and growth, to ensure effectiveness. Written by Lawrence Hrebiniak, top strategy professor in the Department of Management at the Wharton School, should make this book credible. Hrebiniak has consulted at Chase Manhattan, DuPont, and General Electric.

There are not many good books on strategy. This book is an exception. Lots of innovative strategy frameworks make this book an indispensable addition to the business library of every manager. I really liked Making Strategy Work and I hope this book will become a classic. I think all interested in business strategy should read this one.