first-rate strategy poorly
executed every time
!" #ells $argo
driven activity
 & Perceptive analysis of market conditions and company capabilities
 & Attracting and pleasing customers
Executing the Strategy 
 & !oing a good "ob of #orking t$roug$ ot$ers
 & Good organization% building
 & Building competitive capabilities
 & Getting t$ings done and delivering good results
rafting vs. !x
% Move toward operating excellence
% *ougher and more time-consuming than crafting strategy
&mplementation
involves ' ' '
% *he needed actions and needed changes to
occur in rapid fire fashion
% S,epticism of employees and managers
regarding the merits of a new strategy
% *hreatening to their departments and own
careers
changes are reuired to execute the strategy
 
 
ta,es adept leadership to
 & "vercome poc,ets of doubt
 & +uild consensus and enthusiasm
 
 
answer to 2 #hat does my area
have to do to implement its part of
the strategic plan3 and what should
do to get these things effectively
and efficiently4
% Unite total organization behind strategy  
% See that activities are done in a manner that is conducive to first-rate strategy execution
% enerate commitment  so an enthusiastic crusade emerges to carry out strategy
% !it  how organi)ation conducts its operations to strategy re"uirements
 
 
 A $ramewor, $or !xecuting Strategy  % Management's handling of the strategy
implementation process can be considered successful if and when:
- the company achieves the targeted strategic and financial performance
- shows good progress in ma,ing its vision a reality
 
 
% +uild consensus on how to proceed
%  Arouse enthusiasm for the strategy to turn implementation process into a companywide crusade
% Empower  subordinates to ,eep process moving
% Esta#lish measures of progress and deadlines
% $eward  those who achieve implementation milestones
% %irect resources to the right places
% 5ersonally lead strategic change process and the drive for operating excellence
#hat *op !xecutives 7ave to (o in
0eading the mplementation 5rocess
 
 
 
 
Staffing the organi)ation
8. 5utting together a strong management team % *he most important consideration is to fill ,ey managerial
slots with smart people who are
- clear thin,ers
- good at figuring it out what needs to be done
- s,illed in 2ma,ing it happen4
- delivering good results % !xisting management team may be suitable % ore executive group may need strengthening
 
 
Staffing the "rgani)ation 9. Recruiting and Retaining apable !mployees % *he uality of an organi)ation's people is always an
essential ingredient of successful strategy execution % Knowledgeable employees are a company's best source
of creative ideas for the nuts-and-bolts operating improvements that lead to operating excellence
% 7igh performance companies ma,e concentrated efforts to recruit the best and brightest people they can find and retain them with:
- excellent compensation pac,ages
- challenging and interesting assignments % n instances where intellectual capital greatly aids good
 
 
Recruiting and Retaining apable !mployees
8. Spending considerable effort in screening and evaluating 6ob applicants3 selecting only those with suitable s,ills3 energy3 initiative3  6udgment3 and aptitude for learning and adaptability to the company's wor, environment and culture
9. 5utting employees through training programs that continue throughout their careers
;. 5roviding promising employees with challenging3 interesting3 and s,ill-stretching assignments
<. Rotating people through 6obs that not only have great content but also span functional and geographic boundaries
=. !ncouraging employees to challenge existing ways of doing things3 to be creative and innovative in proposing better ways of operating3 and to push their ideas for new products or businesses
>. Ma,ing the wor, environment stimulating and engaging such that employees will consider the company a great place to wor, at
 
 
 & Identifying  the desired competencies and
capa#ilities to build into the strategy to help
achieve a competitive advantage
 & &utting  desired competencies and capa#ilities in place,
 & Upgrading  them as needed3 and 
 & 'odifying  them as mar,et
Strengthening ompetencies 
however imperfectly or inefficiently
experience
needed
organi)ational ability
Strengthening ompetencies
% Stage 9: As experience grows company personnel learn how to:
- perform the activity consistently #ell at an acceptable cost
- the ability evolves into tried and true competency or capability
 
 
Managing the 5rocess 8. ore competence and competitive capabilities are bundle of s,ills
and ,now-how that most often grow out of the combined efforts of cross functional wor, groups and departments performing complementary activities at different locations in the firm's value chain
9. /ormally3 a core competence or capability emerges incrementally out of company efforts either to bolster s,ills that contributed to earlier success or to respond to customer problems3 new technological and mar,et opportunities3 and the competitive maneuvering of the rivals
;. *he ,ey to leveraging a core competency into a distinctive competency is concentrating more efforts and more talents than rivals on deepening and strengthening the competency3 so as to achieve dominance needed for competitive advantage
 
 
8. #hether to develop core competencies by:
a strengthening the company's base of s,ills3 ,nowledge3 and intellect
b coordinating and networ,ing the efforts of various groups and departments
- actions of first sort can be underta,en at all managerial levels
- actions of the second sort are best orchestrated by senior managers
9. #hether to :
a develop the desired competencies internally
b outsource them by partnering with ,ey suppliers or forming strategic alliances
% *he answer depends on what can be safely delegated to outside supplies versus what internal capabilities are ,ey to the company's long-term success.
- outsourcing means launching initiatives to identify the most effective providers and to establish collaborative relationships
- developing capabilities in-house means marshalling personnel with relevant s,ills and experience3 collaboratively networ,ing the individual s,ills and related cross-functional activities to form organi)ational capability 3 and building the desired levels of proficiency through repetition
 
 
 & (ne )ig $ule*  $ole and purpose of organization
structure is to support and facilitate good
strategy execution+ 
 & 5rior arrangements and internal politics
 & !xecutive 6udgments and preferences about how to
arrange reporting relationships
different wor, groups and departments
(ice President (ice President (ice President
CEO
 
 
 
 
to "utsource % nvolves deciding  which activities are
essential  to strategic success
activities that must be performed exceedingly well or in closely
coordinated fashion if the strategy is to be executed with real
proficiency
administrative house,eeping and
candidates for outsourcing
visible3 influential positions
% &rovide coordinating lin,ages
 
 
Structures $it which Strategies % $unctional structure best suited for companies in one
particular business
% $or an organi)ation spread over many countries3 the company may be organi)ed around geographic divisions
 
 
)*! +anufacturing Accounting +arketing
Structure
R & D M f g A c c t g M k t g
E l e c t r o n i c
P u b l is h i n g
R & D M f g A c c t g M k t g
O f f i c e
A u t o m a t i o n
R & D M f g A c c t g M k t g
V i r t u a l
R e a l it y
I n f o - T e c h
P r e s id e n t
Divisional
Structure
Structure
! e v e l o p i n g - e # P r o d u c t s P r o c e s s
5 r o c e s s " w n e r  
r o s s $ u n c t i o n a l * e a m M e m b e r s
A c . u i r i n g a n d / i l l i n g C u s t o m e r O r d e r s P r o c e s s
5 r o c e s s " w n e r  
r o s s $ u n c t i o n a l * e a m M e m b e r s
S u p p o r t i n g C u s t o m e r s a g e P r o c e s s
5 r o c e s s " w n e r  
r o s s $ u n c t i o n a l * e a m M e m b e r s
S e n i o r + a n a g e m e n t , e a m
 
 
!aton orporation
 & *op managers retain authority
structures stressing empowerment
"rgani)ation Structure 
% hallenge of empowering employees: % 7ow to exercise adeuate control over the actions of
empowered employees so that the business is not put at ris, while at the same time the benefits of empowerment are reali)edD
- placing limits on authority
- instituting compensation incentives that reward good performance
 
 
 
apturing Strategic $it in a
(ecentrali)ed Structure % ross business strategic fits have to be captured either
by:
- centrali)ing performance of functions having strategic fits at the corporate level
% !fforts to decentrali)e decision ma,ing and giving leeway in conducting operations have to be tempered with the need to maintain adeuate control and cross- unit coordination
% (ecentrali)ation doesn't mean delegating authority in ways that allow organi)ation units and individuals to do their own things
 
 
 
oordination % Classic method  of coordinating activities 0 1ave related units
report  to single manager
% pper%level managers $ave clout to coordinate efforts of t$eir units
% /irms pursuing related diversification2 coordinating t$e related activities of independent business units often re.uire centralizing of a single corporate level officer 
% !iversified companies commonly centralize staff functions as public relations2 finance and accounting2 employee benefits2 and information tec$nology at corporate level to3
% contain t$e costs of support activities
% facilitate uniform and coordinated performance of suc$ functions #it$in eac$ business unit
% Close cross%unit collaboration is needed to build core competencies and competitive capabilities in strategically important activities t$at involve employees scattered across several internal organization units
 
 
- personnel from sales which wins orders
- finance to chec, credit terms or approve special financing
- production produces the goods and replenish warehouse inventories as needed
- warehousing to confirm whether items are in stoc,3 pic, the order from the ware house and pac,age it for shipping
- shipping to choose the carrier to deliver the goods % $ast ongoing introduction of new products
- cross functional processes involving personnel in RE(3 design and engineering3 purchasing3 manufacturing3 sales and mar,eting
% Supply chain management
 
 
 
 
 & ommunication
 & oordination and control
% $ind ways to produce colla#orative efforts to enhance firm's capa#ilities and resource strengths
 
 
remodeling traditional3 hierarchical structures built on
 & $unctional speciali)ation and 
late 8F@Gs and early 8FFGs was aimed at
 & Recasting authoritarian3 pyramidal
been triggered by
 & /ew strategic priorities
 & !mpowered managers and wor,ers
% !ewer #arriers between  & (ifferent vertical ran,s
 & $unctions and disciplines
 & ompany and its suppliers3 distributors3 strategic allies3 and customers
% Capacity  for change and rapid learning 
% Colla#orative efforts among people in different functions and geographic locations
Change &  Learning