Handling the four political barriers to strategy execution

Many CEOs or managers often find themselves up against organisational politics that impede strategy execution. Historical divisions and entrenched power structures can create barriers to desired change. Navigating these political domains in organisations require awareness of two important dimensions. First is the spectrum at which the political activity takes place between the individual or organisational level. The second dimension is the source of informal or formal power. Using these two dimensions, the four typical types of organisational politics can be described as “the weeds”, “the rocks”, “the high ground”, and “the woods”. Here’s how to approach these situations:

The weeds – The weeds, where individual influence and informal networks rule, can naturally form without any deliberate effort. To deal with the weeds, seek to understand the informal networks at play and identify the key influence brokers, so you can isolate them and increase your own influence.

The rocks – Navigating the terrain here, where individuals have formal sources of authority reign, consists of redirecting the energy of a dysfunctional leader, either through reasoned argument or by appealing to their interests.

The high ground – If you find yourself on the high ground, which combines formal authority embedded within organisational systems such as committees, you can suggest that a separate group or task force (e.g. Innovation Lab) needs to be set up to examine an issue or bridge silos. It can create an unconstrained ‘working space’ outside of the norms and routines of the organisation.

The woods – The woods are characterised by organisations with implicit norms, hidden assumptions and unspoken routines. The key here is to make the implicit explicit and bring those implicit routines and behaviours to the surface. Ask external stakeholders and specialist experts about their observations of the company or get information from benchmark surveys. Once the implicit assumptions are out in the open, ask your team to reflect on how those assumptions are helping or hindering the strategy.

SourceINSEAD

 

Strategy Improvement Quest

The quest to building strategic skills can be challenging without understanding the process of deriving strategy.

It is difficult to think strategically without the time to reflect on the issues and to ponder options. Once you have time set aside to think about strategy, get a solid understanding of the industry-wide trends and business drivers. Begin exploring and synthesizing the internal trends in day-to-day work, paying attention to the issues and obstacles raised repeatedly in the firm. Seek out and connect with industry peers to learn about their observations of the marketplace, sharing your findings across your network.

By becoming more curious, and looking at information from different perspectives, you will begin to see different possibilities, approaches, and potential outcomes that give rise to strategic options.

Pull together the options through a structure that helps stakeholders understand the core message. Walk the audience through the entire process of identifying issues, developing what is often counter-intuitive insights, and then clearly framing the strategic choices for deliberation.

SourceHavard Business Review

 

 

 

Applying a product development strategy to professional services

Traditionally, professional services (such as accountancy, HR, Legal or business advisory consultancies etc) have been able to grow only by selling more services that are billed by the hour. That however means more staff, which adds significant costs and keeps profit growth linear. A feasible strategy is to create a product out of the service, in which the products come about as the service becomes infused with automation, analytics, and a different monetization model. First, discover potential products by identifying opportunities for automation inside the business. Tasks that are performed frequently and require little sophistication are ideal. Next, develop and embed the products (e.g. as a software) to complement the services rendered. Lastly, monetize the products by moving away from billing hours to using a revenue model that captures the benefits through transaction-based pricing or even outcome-based pricing.

SourceHavard Business Review

You have a strategy, now what?

Leaders may sometimes equate strategy execution to strategy communication, but the latter alone is not enough to drive the entire execution. While it is hard to come up with a good strategy, it’s typically harder to get people to execute on that strategy. People in the organization are misaligned in terms of objectives, and may be entrenched in their set way of doing things. Identifying the people who are essential to driving the strategy is critical to successful execution. The question then becomes: How can we align the efforts of key staff and enable them to move the organization in tune with the strategy?

Source: Havard Business Review

Here’s how to tell if you have a transformative business model

Chances are you’ll agree that Apple has revolutionized the audio device market when it introduced the iPod and iTunes. Other companies such as Uber which disrupted the taxi industry may also come to mind. What escapes the casual observer is that these companies’ success was largely achieved when the firm developed a business model that links new technology with an emerging consumer need. Christoph Loch et al believes that six features of a business model can determine whether the it is ground-breaking or not: personalized product or service, closed-loop process, asset sharing, usage-based pricing, collaborative ecosystem, and an agile and adaptive organization. The more features the business model has, the more it is likely to succeed in a big way.

Source: Havard Business Review

How Domino’s Pizza found its way

Having deep insight into the nature of its business – Domino’s is not only in the pizza-making business, but also in the pizza-delivery business – led to significant effort into deceloping technology that changed how customers order (e.g. using the Domino’s app), how the firm monitors the status of orders, and how Domino’s manages its operations. What would come as a surprise to many is that nearly half of the staff at HQ works in software and analytics. Domino’s also crowd-sourced the design of its delivery van, (aka “cheese lover’s Batmobile”) with just one seat, and a warming oven with room for 80 pizzas. Today, Domino’s Pizza has more than 12,500 locations in more than 80 countries, and a share price approaching $160, which is a far cry from $8.76 back in 2010.

Source: Havard Business Review

Why re-orgs fail

Re-orgs commonly fail because employees actively resist the changes. Some members in the leader group may actively resist the changes. In some cases, the org chart changes, but fundamentally the way people work stays the same. Ultimately, if it is not handled properly, good employees who are disenchanted leave because of the re-org.

Source: Havard Business Review