Build Execution into Strategy Bailey Anderson, Angela Chavez, Tucker DeVinny

Poor Process Can Ruin Strategy Execution Companies must make sure the employees/customers affected are well- informed Not executing in a proper process American Airlines: Carries out their strategic process by incorporating LCC's

The Power of Fair Process Procedural Justice = managerial term for fair process Builds execution into strategy by creating people's buy-in upfront How fair process affects people's attitudes and behavior Strategy formulation process --> Fair process Attitudes --> Trust and commitment Behavior --> Voluntary cooperation Strategy execution --> Exceeds expectations

The Three E Principles of Fair Process Engagement Explanation Expectation Clarity American Airlines: Everyone effected is actively informed, engaged, and knows the boundaries

A Tale of Two Plants When implementing a new strategy, lacking the basics of fair process causes poor implementation A lack of transparency and understanding can affect strong workforces negatively even if the strategy will benefit them American Airlines: One Team, One Plan 2019

One Team, One Plan 2019

Why Does Fair Process Matter? Human beings value their individual worth regardless of hierarchy in the work place Humans thrive off appreciation and recognition Individuals in the workforce don't want to be seen as solely "personnel" or "human resources"

Intellectual and Emotional Recognition Theory Open communication and recognition of workers' intellectual and emotional work is essential to effectively operate Recognition establishes trust in management's strategic decisions Employees are more willing to commit and cooperate with strategy execution In a 2017 survey, only 38.9% of American Airlines employees "believe that there's an atmosphere of trust and respect at the airline" Establishes trust

Fair Process and Intangible Capital of an Organization Commitment, trust, and voluntary cooperation in a company is called intangible capital People are willing to override personal self- interest when they have trust and commitment for a company People tend to be committed to support the resulting strategy even when it is viewed as unfavorable with fair process In AA, people trust the brand name and hold a certain expectation when flying with AA or any partnering airline

Fair Process and External Stakeholders External stakeholders are outside of hierarchical control and often have diverging interests and understandings Without external stakeholders' commitment, execution can become a slippery slope of missed deadlines, poor quality, and cost overruns AA relies heavily on their external stakeholders to stay ahead of competition and expand the company efficiently with lower costs