 Build Execution into Strategy Team 6 Nailah Jones, Morgan Boone, Austin Hinkle, Carter Hewlett

 Build Execution into Strategy A company isn’t just top management or middle management You must create a culture of trust and commitment that motivates people Under Armour- Join Our Team

Sixth Principle of Blue Ocean Strategy  To build people’s trust and commitment deep in the ranks and inspire their voluntary cooperation, companies need to build execution into strategy from the start  Allows companies to minimize management risk

Poor Process Can Ruin Strategy Execution  If everyone involved in the process isn’t on the same page, it can be doomed from the start  In the case of Under Armor…

The Power of Fair Process  The theme of fairness or justice has preoccupied humans throughout the ages  Fair Process traces back to two social scientists  John W. Thibaut and Laurens Walker  Their research determined that people care as much about the justice of the process through which an outcome is produced as they do about the outcome itself  Fair Process is our managerial expression of procedural justice theory

The Three E Principles of Fair Process  There are three mutually reinforcing elements that define Fair Process:  1. Engagement  Involving individuals in the strategic decisions that affect them by asking for their input and allowing them to refute the merits of one another’s ideas and assumptions  2. Explanation  Everyone involved and affected should understand why final strategic decisions are made as they are  3. Clarity of Expectation  Expectation Clarity requires that after a strategy is set, managers state clearly the new rules of the game

Fair Process Emotionally  Seek Recognition of value as human beings  NOT Labor, Personnel, or HR  People like to be given respect & appreciation. Intellectually  People like to know you are interested in their ideas.  Seek recognition

Elco Elevator Company  Moving from a batch-manufacturing system to a cellular approach that would allow self-directed teams to achieve superior performance.  The new design offered benefits to employees including an easier way to schedule vacations and an opportunity to broaden their individual skills.  Employees would no longer be judged on individual performance, but on the performance of the cell.

A Tale of Two Plants Chester  Exemplary Employee Relations (no more union)  Plant Manager lost control  Did not engage Employees in decisions that directly affected them  Consultants were told to “minimize distractions”  Meetings were held away from the Plant  Employees did not understand expectations. High Park  Strong Union. Resistant to Change.  Consultants were introduced to the employees.  Employees were engaged through plant- wide meetings  Goals and expectations were made clear.  Employees felt that it had been “a necessary, worthwhile, and positive experience.”

Why Does Fair Process Matter?  Intellectual and emotional recognition.  Individuals want to be recognized as human beings, not as labor, personnel, human capital, etc.  Ideas and feelings need to be taken in to account by management.

Intellectual and Emotional Recognition Theory  Creates an eagerness to trust and cherish the individual as well as confidence in their knowledge, talents, and expertise.  Individuals want to feel recognized for their intellectual, as well as being treated with emotional recognition.  People will better apply their knowledge and expertise.

Under Armour  Employees are referred to as Teammates  Training  Seminars  Workshops  Courses

Under Armour  UA Wills  Preform “Like a Teammate”  “Our ambitious goals require that we empower, support, challenge, and inspire our Teammates to be great.”  Four Pillars of Greatness  Make a great product  Tell a great story  Provide great service  Build a great team

Fair Process and Blue Ocean Strategy  Intangible Capital  Trust  Commitment  Voluntary Cooperation

How to organize a Strategic Shift  Traditional Incentives  Money, Carrots and Sticks  FAIR Process  Commitment  Compromises and Sacrifices  Short-term sacrifices for Long-term interest  All conditional on the acceptance of the FAIR Process