Building Execution into Strategy COLE BENGFORD WEIZHOU LIN JONATHAN HOELZER

Process of Execution  A company involves everyone  The decision making process  People care more about the process  Builds Trust  Voluntary cooperation  If not followed…  Distrust  Noncooperation  Sabotage

Fair Process  The Three Principles of Fair Process  Engagement - Involve everyone  Explanation - How? and Why?,  Expectation Clarity – What’s expected? how it’s judged?  3M  Military

Fair Process Cont.

3M  Elco created a blue ocean strategy by eliminating its batch-manufacturing system with a cellular approach  3M competes with efficiency as well as Elco  Elco and 3M are both manufacturing businesses  Both companies made a strategic shift

3M Continued  Elco expanded their market by venturing into an untapped market  3M can relate to this by the of post it note, which now introduces a new market for office supplies  But if managers practice fair process, the worst employees can turn into the best and can execute even difficult strategic shifts with their willing commitment while building their trust

Why Does Fair Process Matter?  All comes down to emotional and intellectual recognition  Emotionally –  Individuals seek recognition of their value, not as “labor,” “personnel,” or “human resources” but as human beings who are treated with full respect and dignity and appreciated for their work regardless of hierarchical level  Intellectually –  Individuals seek recognition that their ideas are sought after and given thoughtful reflection, and that others think enough of their intelligence to explain their thinking to them Mangers must see the nearly universal value of the intellectual and emotional recognition that fair process conveys

Intellectual and Emotional Recognition Theory Using fair process in strategy making is strongly linked to both intellectual and emotional recognition  When individuals feel recognized for their worth, they feel inspired to impress and confirm the expectation of their intellectual and emotional value  With this fair process, managers will begin to see certain changes in their employees. To the right, you can see these changes Intellectual Knowledge sharing Inspiration to impress Engage in voluntary cooperation Emotional Tied to the strategy Inspired to give their all Go beyond the call of duty

Symptoms of Intellectual Indignation Jerry's Presentation - Parks and Recreation Jerry's Presentation - Parks and Recreation If individuals are not treated as though their knowledge is valued, they will feel intellectual indignation. Decrease in idea sharing Prevents new insights Rejection of others’ intellectual worth “You don’t value my ideas, I don’t value your ideas, nor do I trust in or care about strategic decisions you’ve reached”

Decreased Emotional Worth Similarly, to the extent that people’s emotional worth is not recognized, they will feel angry and will not invest their energy in their actions. These negative actions include: Applying counter-efforts Sabotage Feet dragging Rolling back strategies Resentment

3M and Fair Process “Commitment, trust, and voluntary cooperation are not merely attitudes or behaviors. They are intangible capital. When people have trust, they have heightened confidence in one another’s intentions and actions. This leads to a successful blue ocean strategy similar to the one 3M uses.”

Conclusion: Executing Blue Ocean Strategy The exercise of fair process gets around the dilemma of creating trust, commitment and voluntary cooperation. By organizing the strategy formulation process around the principles of fair process, you can build execution intro strategy making from the start. Fair Process Violation of Fair Process Intellectual and Emotional Recognition Intellectual and Emotional Indignation Trust and Commitment Distrust and Resentment