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Chapter 8

Chapter 8. Build Execution into Strategy. Milos Kustudija , Dustin Pace, Matt Zaney. A company is everybody. From top executives to line employees. When all employees support and are aligned around a strategy, that is when a company can stand apart as great consistent executor.

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Chapter 8

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  1. Chapter 8 Build Execution into Strategy MilosKustudija, Dustin Pace, Matt Zaney

  2. A company is everybody • From top executives to line employees. • When all employees support and are aligned around a strategy, that is when a company can stand apart as greatconsistent executor. • Trust and commitment must create an environment that motivate people to execute the strategy. • Build execution into strategy from the start. • Especially in blue ocean because trepidations builds as people are less involved. Fair process is key….

  3. Poor process can ruin strategy execution • Poor process can lead to sabotage • Increase risk • Employees will fight against change if not • properly introduced or instructed on the • strategy. • Example: Lubber sales reps • Were not included in the execution of strategy, and sabotaged sales with clients.

  4. The Power of Fair Process • Procedural justice: people care as much about the justice of the process through which an outcome is produced as they do about the outcome itself. • Managerial expression – people need to buy in up front. • Get employees involved early. • People trust that a level playing field exist. • Employees will cooperate voluntarily.

  5. The Three E Principles of Fair Process • Engagement: • Involving individuals in the strategic decisions by asking them for their input. • Builds better collective wisdom. • Greater commitment from all involved. • Explanation: • Everyone involved and affected should understand why final strategic decisions are made as they are. • People know their opinions have been considered. • Enhances learning. • Expectation Clarity: • After a strategy is set, managers state clearly the new rules of the game. • Political jockeying and favoritism is minimized. • New goals and milestones are set.

  6. A tale of Two Plants • Elco • Elevator systems manufacturer. • Domestic demand falling, elevator industry declining. • Blue ocean strategy – go from batch manufacturing to a cellular approach • Allow self-directing teams to achieve superior performance. • Two plants: • Chester plant • High Park plant

  7. Chester Plant • Exemplary employee relations • Decertified their own union • “They were the ideal workforce”

  8. High Park Plant • Strong union • Resist change • Needed Chester plant to build momentum for High Park Plant.

  9. Which plant took the new manufacturing process better? • High Park plant accepted the new process • Chester plant let to disorder and rebellion. • Why did this occur.

  10. No fair process at the Chester Plant • Failed to engage employees in the strategic decisions. • Consultants were briefed to have no involvement with employees. • Chester employees were not introduced to consultants who would implement new system. • Consultant dressed differently, in black suits and ties. • Fear off layoffs • Employees brought newspaper clippings of plants that had been shut down around the country • Plant manager absent • Did not explain why new system was being implemented • Neglected to tell employees what would be expected of them

  11. Chester plant • Employees felt undermined. • Fights erupted. • Refused to work in groups. • No trust.

  12. Fair process as High Park plant • Introduced consultants to employees right at the start. • Engaged employees in plant wide meetings. • Discussing declining business conditions and how new strategic change would help break from the competition. • Announced pro-action time policy so employees would not fear layoffs. • Worked with employees to develop new goals and establish new responsibilities. • Employees spoke of their plant manager with admiration.

  13. Why does fair process matter? • Individuals seek recognition of their value. • Seek recognition that their ideas are sought after. • Intellectual and emotional recognition that fair process conveys.

  14. Intellectual and Emotional Recognition Theory • When individuals feel recognized for their intellectual worth, they are willing to share their knowledge. • Violation of fair process – violation of individuals intellectual and emotional worth. • This can lead to sabotage – “You don’t value my ideas. So I don’t value your ideas, nor do I trust in or care about the strategic decisions you’ve reached.

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