Build execution into strategy

Group 3Mayra Garcia

Lindsey PacatteDavid Hayward

Garrett MatthewsNick Watkins

Cory Logan

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

Strategy to the whole company

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

Management risk in strategy

• Lubber liquid coolants example

– choosing right coolant is a delicate process

– strategy to eliminate complexity & costs

– sales process was dramatically simplified

Poor Process Can Ruin Strategy Execution

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

Lubber continued

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

Fairness in the Process

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

Fair Process continued

Fair Process

Trust and Commitment

Voluntary Cooperation

Exceeds Expectations

A Visual of How Fair Process Affects the Workplace

StrategyFormulation

Process

Attitudes

Behavior

Strategy Execution

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.

Three E Principles of Fair Process

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

How Do the 3 Principles Work

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?

Fair Process

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

Intellectual and Emotional Recognition

Trust and Commitment

Voluntary Cooperation in Strategy Execution

Fair Process

Intellectual and Emotional Indignation

Distrust and Resentment

Refusal to Execute Strategy

Violation of the Fair Process

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

Fair process and blue ocean strategy