Innovation Reactor

A quick guide to successful strategy execution

Many companies hire expensive consultants, agency planning teams or innovation “gurus” to develop  new strategies but surprisingly many plans fall down due to poor execution.

So here’s a quick guide to help improve your strategy execution using my experience implementing large company-wide marketing strategies, major advertising campaigns and new product launches.

1. Inform people on the rationale for the change and improve the flow of information

Strategy execution is often ineffective in large organizations because a lack of vital information results in poor decision making.  Frequently, information is hoarded by corner-office executives, protected by gatekeepers or never transmitted beyond various business unit silos. The key steps to strengthen the information flow are;

• Communicate and supply information about your new strategy to your employees so they understand the major components of the plan and the projected benefits the strategy will deliver to your company and people
• Provide your employees up-to-date market intelligence on competitors, customers and key driver metrics that measure company performance
• Develop an internal communications plan comprising of management meetings, emails, conference calls, employee newsletters
• Setup informal Q&A forums to improve data visibility and use your company intranet or shared drive to post critical business information, competitor and customer research or important presentations.

2. Build ownership of the strategy at all levels

Strategy execution can fall down when there’s uncertainty around people’s roles and responsibilities, fuzzy accountability or ambiguity about the ownership of decision rights. Clarity around decision-making is important because people need to know who’s accountable and senior management need the ability to track achievement and success.

An important building block is to create ownership of the new strategy by using employee workshops because this makes the planning process inclusive and builds collaboration, teamwork and trust. Moreover, develop a blueprint and roadmap so people understand the strategy, new direction for the business and timelines for implementation. Finally, improve execution efficiency and remove decision making paralysis by documenting people’s roles and responsibilities, assigning accountability for critical projects and communicating these to the wider organization.
 
3. Create a sense of urgency to overcome challenges and maintain momentum

Motivation is a critical factor for effective execution since it can seem like an insurmountable task to suddenly change direction. As people, processes and products that are rooted in the past need to transform quickly, do you have the optimal organizational structure, best talent and a diverse rage of expertise on your team?

An important enabler for effective execution is to create cross-functional teams and assign process owners and project managers to coordinate strategy execution across business lines. Changing the organizational structure is difficult, so a good approach is to search your company for talented managers and functional experts to create your project teams.  Remember to keep employees motivated by using team performance awards and recognise individual achievement or top performers for their great work.

Every plan has its execution challenges but improving the flow of information and sharing best practices throughout the business can help overcome difficult problems, improve efficiency and maintain momentum. It’s a great idea to create a centre of excellence to distribute best practice and improve oversight, strategy delivery and cooperation between business units. Lastly, always be realistic about your organization’s capabilities and capacity for change; tackle small projects first and aim for bite-sized successes.

4. Inspire people to embrace change and lead by example

You cannot execute a strategy with an email, a few employee meetings or pep-talks. But how often have we seen senior management try it – or alternatively we see a big-bang new strategy launch followed by silence after just a few weeks.

To get your people inspired so they can champion the gameplan, leaders must be in tune with the pulse of the business. This starts with setting clear goals and priorities and getting to know your people and business inside-out. A critical element is for leaders to follow through on deliverables, anticipate roadblocks and obtaining timely performance feedback.

I’ve mentioned the importance of communication, improving the flow of information, recruiting the best talent and sharing best practices. With these tools in place, leaders should then support decision-making at lower levels since front-line employees usually have the best knowledge about customers, clients and suppliers. The result is empowerment that delivers faster speed-to-market and execution.

Acknowledgments:

Execution: The Discipline of Getting Things Done (2002), Larry Bossidy, Ram Charan and Charles Burck.

Harvard Business Review (June 2008), “The Secrets to Successful Strategy Execution”, Gary Neilson, Karla Martin and Elizabeth Powers.

The Path to Extraordinary Leadership

I recently attended a seminar by Michelle L. Buck, Clinical Professor of Management and Organizations at the Kellogg School of Management at Northwestern University, titled The Path to Extraordinary Leadership.

In times of economic crisis leaders are now in the spotlight and scrutinized more than ever. While the history annuals remain littered with catastrophic leadership failures some leaders rise above the ranks to become highly successful.

Extraordinary leaders seem to generate synergy and infuse collaboration. They have a global perspective with the ability to span cross-cultural and cross-functional boundaries, with the energy and knack to seize opportunities at the right time. Moreover, these great leaders seem to have authentic life stories and core values.

So how can we develop our leadership abilities from good to great? Professor Buck’s research suggests the path to extraordinary leadership can be broken down into four main areas below.

Assessment & Feedback

• By constantly seeking feedback and performance data - to understand their strengths and weaknesses - great leaders develop a balanced and rational perspective of themselves. They then apply this information and knowledge to effectively leverage their strengths and improve performance gaps.

Reflection & Planning

• Extraordinary leaders make time for reflection to review and analyze their actions and decision-making. They assess their individual performance and the perceptions of others then look for areas to optimize and improve. With true inner reflection they can then move forward and create better plans for the future.

Knowledge & Insight

• Great leaders place importance on continuous learning and challenge themselves to understand the detail and inner-workings of their industry. They spend time networking and asking questions to learn from others. Since this learning improves their expertise, knowledge and thought-leadership in their field these leaders can then move ahead of the curve by seeing what’s next. So they can use their insights and to identify new opportunities, challenge the status quo and drive real innovation and change. 

Experience & Action

• While the media emphasises heroic individuals and turns them into celebrities, great leaders embrace the importance of teamwork and cultivate interpersonal relationships. Through these relationships the best leaders make an impact by rallying people to their vision for the future. Then using their experience they implement action plans to drive results, by collaborating and influencing across teams or organizations to accomplish goals.

Some might say that many leaders are extremely lucky in their careers. However one underlying pillar is a disciplined mindset to focus on these four key areas. This enables great leaders to learn from experience, show resilience when faced with challenges, and leverage their core values - with a sense of purpose that remains stable - while their strategies and practices adapt to a changing world.

An Authentic Story

But most importantly is that each extraordinary leader has an authentic story, ethical core-values, and a powerful resonating message. Valeria Maltoni has a great summary of Barack Obama's Social Media Campaign and how his authentic life story was promoted across different media to keep his supporters engaged. While Lorissa Shepstone has written a fantastic article on Anita Roddick who founded The Body Shop and inspired women by never compromising her core-values. Finally Guy Kawasaki promotes mantras that are meaningful and memorable, and great leaders have powerful mantras so their message is instantly recognizable.

How Waitrose competes with a differentiated business model

 

I attended a great presentation from Mark Price, Managing Director of Waitrose Supermarkets and was fortunate to have a quick conversation with him afterwards.  The UK supermarket business is fiercely competitive and recent statistics by TNS show Waitrose has a 4% market share compared to their main rivals Tesco (31.5%), Asda (16.6%), Sainsburys (16.2%) and Morrisons (11.2%). In this competitive industry structure, how does Waitrose grow market share against such strong competition?

Waitrose have created a strategy focused on two specific market segments of affluent consumers

• Baby boomers looking to trade-up to better quality
• Pre-children Gen-Xs that want quality food and drink to match their lifestyle

Then utilizing a differentiated business model, focused on quality Products, Service and Store Environment, they have created a premium brand and differentiated customer experience. This makes it difficult for price-led competitors such as Tesco or Asda to replicate the Waitrose strategy.

Products: Waitrose maintains product quality by investing in the supply chain since they made a strategic decision to invest in organic farming (production) and take a long-term approach with supplier relationships. By paying dairy farmers above-market prices for milk they locked in exclusive relationships. These farmers could then invest in better technology and upgrade equipment, while other farmers struggled to reduce costs and lowered quality. Subsequently, Waitrose then repeated for pig farmers and organic growers.

Service: Waitrose isn’t owned by shareholders, but all employees are partners so profits that usually go to shareholders are paid in bonuses to employees. All employees receive a 20% annual bonus regardless of seniority; the company is open with information like sales data and store performance, publishing this every week; managers are empowered to make decisions to optimize sales and service in their store; while employee committees are elected to consult with the board on strategic decisions. By placing employees first in the value chain, Waitrose has generate higher levels of employee satisfaction, created better customer engagement and increased service levels, resulting in superior levels of customer satisfaction with profitability. 

Store Environment: Waitrose creates a unique customer experience through cleaner stores, wider isles, shelves setup to promote the products and not sales posters or promotions, and established store locations are convenient to the target market with easy car parking.

I asked Mark “how is Waitrose innovating to beat the competition?”

“Waitrose is investing over £10 million in product development each year. We do not outsource our product development to suppliers like other supermarkets rather we employ top master chefs to create new Waitrose-branded product lines. Because of our business model, our produce buyers are more tenured and experienced so they understand the product categories better. This has allowed us to shift from organic to new segments, such as locally grown fresh produce, which grew 170% last year, faster than our competitors. We’ve also invested in online supermarket Ocado acquiring a 25% stake in the company, that’s helping Waitrose expand coverage into new geographic regions and gain a 16% share in online food retailing in the UK.”

Like Waitrose, a challenger brand aiming to steal market share from strong competitors, can start by developing a strategy focused on niche customer segment, then use a differentiated business model to win.

Creating an environment for breakthrough innovation

You want to create a new direction for your company and make innovation a top priority. However to make this new strategy work it’s the people within an organization must first transform their communication, relationships, thinking and focus.

To achieve this I suggest 3 steps to generate “Innovation from the inside”

1. Improve communication and relationships to challenge existing ways of thinking

2. Develop a vision for the future and design breakthrough projects to achieve the vision

3. Create dynamic networks inside your organization that focus on driving results

1. Every team consists of a Coach and Players –with their actions on the field determining whether the game is won or lost. However many people become Journalists and Spectators –sitting in the stands giving opinions,  judgements, explanations, telling stories, writing reports or spreading rumours. Since Journalist and Spectator perceptions are rooted in the past they stifle innovation, creativity and change. If you have too many in your organization you cannot begin to realise your new strategy. To provide the catalyst for change try hosting town-hall style meetings focused on putting the new direction into context. Then smaller workshops that highlight Journalist and Spectator behaviours and the resulting low-performance it delivers. By challenging existing ways of thinking and improving communication people can then open up to new possibilities.

2. Work with your teams to develop a new vision for the future –then facilitate open communication to create alignment and shared understanding of this vision. Build momentum by developing a list of breakthrough sprint-projects. These short-term projects could be improving a process, adding a new partnership, building new technology or sales/marketing capabilities.  These action-orientated projects will help refocus everyone on the game and beating the competition.

3. After choosing your sprint-projects develop a rough plan, outline milestones, align resource networks and determine what learning is required to be effective. Remember keep it simple and remove complexity. While every team needs a structure and game plan, too much control limits innovation, restricts ideas and blocks creativity. Space with empowerment allows self-organization to flourish and employees to take action themselves and drive the new strategy forward.

When companies let employees contribute to the vision, facilitate open communication and challenge established norms, they will volunteer for projects and self-organize into dynamic networks. With employees championing new ideas, driving change, and spreading your new innovation culture across your organization imagine what you could achieve.

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The 10 C’s of Leadership

I recently attended a leadership coaching session hosted by the President of American Express, Al Kelly. With many years experience as an executive at The White House, Pepsi and now American Express, he shared some great insights into what it takes to be a standout leader in the business world today. These are his 10 C’s of leadership.

The first 5 C’s are focused on becoming a Leader

1) Comfort –understand your strengths and weaknesses and then be comfortable hiring people smarter than yourself to fill the gaps.

2) Character –good moral values, doing what’s right and acting with integrity. Be aware of the culture you are creating (i.e. Enron).

3) Confidence –this is about channeling your ability in a focused way and taking measured risks necessary to drive an organization forward and reach an end objective. However overconfidence can breed arrogance and make people take stupid risks like Evil Knievel. Thus self-awareness is important since companies need leaders not cowboys.

4) Composure –being aware of your energy, mood and feelings and how that energy can influence the people around you. You need to demonstrate consistency in behaviour all the time because you don’t want your team thinking to themselves “which person is going to show up to the office today?”

5) Courage –leaders have to make tough decisions using a mix of data, facts, experience and intuition. You must show good judgment in your decisions. You must have the courage to make a vital decisions when there is no playbook and to stand-up for what’s right.

The next 5 C’s are focused on being a Leader

6) Caring –the people that work for us are our greatest asset so it pays dividends to spend time with them, listen to their problems, and understand their situation, background and lives. Build good relationships inside and outside of work.

7) Communication –these are opportunity situations where you can shine but your written and verbal communication must be clear on the intent, consistent and ‘on brand’ every time. Try to match your communication to the situation (i.e. a company reorganization might require a town hall style meeting, while quarterly updates could be done via email memo). To earn the respect of people be clear on how the communication will affect them.

8) Coaching –a good leader invests in people through coaching, mentoring, facilitating and guiding.

9) Curiosity –invest in constant learning and updating your skills, plan ahead and ask really good questions that push your thinking and the thinking of those around you.

10) Conviction –commitment once you make a decision has been made and staying the course. You must be a cheerleader for the company strategy, the products and people who work there.

Good leaders continue to learn and develop their skills, while being self-aware about the decisions they can control and the impact of those decisions on people’s lives who work for them. While there are other C’s (co-operation, compassion, etc) the 10 C’s above can be hardwired into a leaders DNA to earn followership and deliver results.