Build execution into strategy

Build execution into strategy Group 3 Mayra Garcia Lindsey Pacatte David Hayward Garrett Matthews Nick Watkins Cory Logan

Strategy to the whole company • Strategy is best carried out when everyone is on board with it • Everyone, from top management down to front line employees, need to understand why they are implementing change • Implementation can be hindered if people do not understand why things are being changed

Management risk in strategy • Employees must understand why changes are being made • Build execution into strategy from the start • Reach for fair process in policy implementation of new strategies

Poor Process Can Ruin Strategy Execution • Lubber liquid coolants example • choosing right coolant is a delicate process • strategy to eliminate complexity & costs • sales process was dramatically simplified

Lubber continued • Strategic move was doomed from the start • sales reps saw the shift as a direct threat • felt their contributions went unappreciated • worked against the expert system • deal with management risk up front

Fairness in the Process • What is Fair Process? • Means Procedural Justice or the fairness of the steps or processes taken to resolve a dispute or allocate resources • How does this Procedural Justice affect business? • People who believe what they are doing is right will be more effective and efficient

Fair Process continued • In essence Fair Process is management’s expression of procedural justice • We see that when Fair Process is implemented in the strategy-making process, the employees can believe that upper management is trustworthy

A Visual of How Fair Process Affects the Workplace

Three E Principles of Fair Process • 1st Principle • Engagement • Involving individuals in the strategic decisions • Communicates respect for Individuals • Sharpens everyone’s thinking • Results in better strategic decisions

Three E Principles of Fair Process • 2nd Principle • Explanation • Understand why final strategic decisions are made • Allows employees to trust manager’s intentions • Powerful feedback loop

Three E Principles of Fair Process • 3rd Principle • Expectation Clarity • State clearly the new rules of the game • To achieve fair process matters most about clarity • Must to taken together lead to judgment of fair process.

How Do the 3 principles work • Elevator Systems Manufacturer • Elco’s Chester and High Park plant • 1980s, sales in the elevator industry had declined • Office space lead to a vacancy rate of 20%

How Do the 3 Principles Work • Solution • Create and execute a blue ocean strategy • Offer buyers a leap in value while lowering cost • Replace its batch-manufacturing system with a cellular approach

How Do the 3 Principles Work • The Process • Install system at the Elco’s Chester plan first • Had decertified their own unions • Ideal work force for the change • Expected a positive spillover effect on High Park

How Do the 3 Principles Work • The results • Elco’s Chester Plant • Change led to disorder and rebellion • Cost and quality were in free fall • Wanted to unionize • High Park • Accepted the strategic shift • Felt they were treated fairly • Willingly participated in the execution

How Do the 3 Principles Work • A closer look- Elco managers violated all 3 principles of fair process • Failed to engage employees in the decision • Manager was always absent • Managers didn’t explain why the decision was made • Managers also neglected to make clear what was expected under the new process

How Do the 3 Principles Work • Elco’s Chester • Process undermined employees’ trust • Only saw negative side • Fights erupted • Employee’s rejected the transformation • High Park • Introduced consultants to employees • Held plant-wide meetings • Calmed employees from the thought of layoffs

Fair Process • Why does fair process matter? • Why is fair process important in shaping people’s attitudes and behavior? • Why does the observance or violation of fair process in strategy making have the power to make or break a strategy’s execution?

The Execution Consequences of the Presence and Absence of Fair Process in Strategy Making

Fair Process • Intellectual and Emotional Recognition • Trust and Commitment • Voluntary Cooperation in Strategy Execution

Violation of the Fair Process • Intellectual and Emotional Indignation • Distrust and Resentment • Refusal to Execute Strategy

Fair process and blue ocean strategy • Commitment, trust, and voluntary cooperation are not merely attitudes or behaviors; they are intangible capital • Trust brings heightened confidence in one another’s intentions and actions • Commitment enables people to override personal self-interest in the interest of the company

Fair process and blue ocean strategy • Commitment, trust, and voluntary cooperation allow companies to stand apart in the speed, quality, and consistency of their execution and to implement strategic shifts fast at low cost • The question raised by management is how to create trust, voluntary cooperation, and commitment deep within the organization

Build execution into strategy