1. IMPLEMENTING STRATEGY: CULTURE AND LEADERSHIP

2. “An organisation’s capacity to execute its strategy depends on its “hard” infrastructure, structure and systems and on its “soft” infrastructure - its culture and norms.”
Amar Bhide

3. What Makes Up a Corporate Culture?
Beliefs about how business ought to be conducted
Values and principles of management
Patterns of “how we do things around here”
Oft-told stories illustrating company’s values
Taboos and political don’ts
Traditions
Ethical standards

4. Features of a large retailer cuture
Dedication to customer satisfaction
Zealous pursuit of low costs
Belief in treating employees as partners
Sam Walton’s legendary frugality
Ritualistic Saturday morning meetings
Executive commitment to
Visit stores
Talk to customers
Solicit employees’ suggestions

5. Where Does Corporate Culture Come From?
Founder or early leader
Influential individual or work group
Policies, vision, or strategies
Traditions, supervisory practices, employee attitudes
Organisational politics
Relationships with stakeholders
Internal sociological forces

6. How Is Culture Sustained?
Continuity of leadership
Select new employees based on personality “fit”
Systematic indoctrination of new employees
Senior employees’ reinforcement of core values
Story-telling of company legends
Ceremonies honoring employees who display cultural ideals
Visibly rewarding those who follow cultural norms

7. The Power of Culture
Culture can contribute to or hinder successful strategy execution
Requirements for successful strategy execution may or may not be compatible with culture
A close match between culture and strategy promotes effective strategy execution

8. Benefits of a Good Culture - Strategy Fit
Strategy-supportive cultures
Shape the mood and temperament of the work force positively affecting organisational energy, work habits, and operating practices
Provide standards, values, informal rules and peer pressures that nurture and motivate people to do their jobs in ways that promote good strategy execution
Strengthen employee identification with the company, its performance targets, and strategy

9. Benefits of a Good Culture-Strategy Fit (cont.)
Strategy-supportive cultures
Stimulate people to take on the challenge of realising the company’s vision, do their jobs competently and with enthusiasm, and collaborate with others to execute the strategy
Optimal condition: A work environment that
Promotes can do attitudes
Accepts change
Breeds needed capabilities
Can
Do!

10. Strategic Management Principle
Anything so fundamental as implementing a new or different strategy involves aligning the organisation’s culture with the requirements for competent strategy execution.

11. Types of Corporate Cultures
Strong vs. Weak Cultures
Low-Performance Cultures
Adaptive Cultures

12. Characteristics of Strong Culture Companies
Conduct business according to a clear, widely-understood philosophy
Management spends considerable time spent communicating and reinforcing values
Values widely shared and deeply rooted
Often have a values statement
Careful screening/selection of new employees to be sure they will “fit in”
Visible rewards for those following norms; penalties for those who don’t

13. How is a Strong Culture Built?
Leader who establishes values consistent with:
Customer needs
Competitive conditions
Strategic requirements
A deep, abiding commitment to espoused values and business philosophy
Practicing what is preached!!
Genuine concern for well-being of:
Customers
Employees
Shareholders

14. Strategic Management Principle
Strong cultures promote good strategy execution where there’s fit and hurt execution where there’s little fit.

15. Characteristics of Weak Culture Companies
Many subcultures
Few values and norms widely shared
Few strong traditions
Little cohesion among the departments
Weak employee allegiance to company’s vision and strategy
No strong sense of company identity

16. Characteristics of Low Performance Cultures
Politicised internal environment
Issues resolved on basis of turf
Hostility to change
Experimentation and efforts to alter status quo discouraged
Avoid risks and don’t screw up
Promote managers who are more concerned about process than about results
Aversion to look outside for superior practices
Must-be-invented here syndrome

17. Hallmarks of Adaptive Cultures
Introduction of new strategies to achieve superior performance
Strategic agility and fast response to new conditions
Risk-taking, experimentation, and innovation to satisfy stakeholders
Proactive approaches to implement workable solutions
Entrepreneurship encouraged and rewarded
Top managers exhibit genuine concern for customers, employees, shareholders, suppliers

18. Creating a Strategy - Supportive Cultural Fit
STEP 1
Diagnose which facets of present culture are strategy-supportive and which are not
STEP 2
Talk openly about those aspects of present culture that need to be changed
STEP 3
Follow with swift, visible actions - some
substantive and some symbolic

19. Symbolic Culture-Changing Actions
Emphasise frugality
Eliminate executive perks
Require executives to spend time talking with customers
Alter practices identified as cultural hindrances
Visible awards to honor heroes
Ceremonial events to praise people and teams who “get with the program”

20. Substantive Culture-Changing Actions
Benchmarking and best practices
Set world-class performance targets
Bring in new blood, replacing traditional managers
Shake up the organisational structure
Change reward structure
Increase commitment to employee training
Reallocate budget, downsizing and upsizing

21. Topics Covered in Value Statements
Customer importance
Commitment to quality
Commitment to innovation
Respect for individual employee
Importance of honesty
Duty to stockholders
Duty to suppliers
Corporate citizenship
Protecting the environment

22. Instilling Values in the Culture
Incorporate values statement in employee training programs
Screen out applicants who do not exhibit compatible character traits
Communicate the vales to all employees
Management involvement, participation and oversight
Strong endorsement by CEO
Word-of-mouth indoctrination

23. Building a Spirit of High Performance Into the Culture
Emphasise achievement and excellence
Promote a results-oriented culture
Pursue practices to inspire people to excel
Desired outcome:
Produce extraordinary results with ordinary people

24. Approaches to Building a Spirit of High Performance
Treat employees with dignity and respect
Train each employee thoroughly
Encourage employees to use initiative
Set clear performance standards
Use rewards and punishment to enforce high performance standards
Hold managers responsible for employee development
Grant employees autonomy to contribute
Make champions out of people who excel

25. Six Roles of the Strategy Implementer
1. Stay on top of what’s happening
2. Promote a culture energising organisation to accomplish strategy
3. Keep firm responsive to changing conditions
4. Build consensus and deal with politics of crafting and implementing strategy
5. Enforce ethical standards
6. Take corrective actions to improve overall strategic performance

26. Role #1: Stay on Top of What’s Happening
Talk with many people at all levels
Be an avid practitioner of MBWA
Observe situation firsthand
Monitor operating results regularly
Get feedback from customers
Watch competitive reactions of rivals

27. Role #2: Foster a Strategy - Supportive Culture
Successful leaders
Spend time convincing organisation members that the chosen strategy is right and that competent strategy execution is top priority
Nurturing values
Building and nurturing a culture that promotes good strategy execution

28. Leader’s Role in Matching Culture and Strategy
Create events where all managers must listen to
Angry customers
Dissatisfied stockholders
Alienated employees
Energise employees to make new strategy happen
Repeat desired cultural values again and again
Reward people exhibiting desired cultural norms

29. Role #3: Keep Internal Organisation Responsive
Promote openness to fresh ideas
Pursue attractive new opportunities
Support people who are willing to champion
Innovative ideas and products
Better services
New technologies
Promote continuous adaptation to changing conditions
Build new competencies and capabilities

30. Leader’s Role in Empowering Champions
Encourage people to be creative and imaginative
Tolerate mavericks with creative ideas
Promote lots of tries and be willing to accept failures
Use all kinds of organisational means to support experimentation (teams, task forces, “skunkworks” and individual champions)
See that rewards for successful champions are large and visible

31. Leader’s Role in Developing New Capabilities
Responding to changes requires top management intervention to establish new:
Organizational capabilities
Resource strengths and competencies
Senior managers must lead the effort because
Competencies reside in combined efforts, requiring integration
Clout is needed to enforce necessary networking and cooperation

32. Role #4: Dealing with Politics
Politics in strategy-making
Winning agreement on long-term direction, objectives, and strategy
Politics in implementing strategy
Choosing people to fill key positions
Delegation of authority
Whether and how to reorganise
Who reports to whom
Deciding which units get biggest budget increases and which get downsized

33. The Political Role of the Strategy Leader
Stimulate options
Nurture support for strong proposals and kill weak ones
Guide formation of coalitions on certain issues
Achieve consensus and commitment

34. Political Tactics of Successful Executives
Let weakly supported ideas die via inaction
Establish hurdles for strongly supported ideas that shouldn’t be opposed
Keep low profile on unacceptable ideas by getting subordinates to say no
Let most negative decisions come from group consensus
Lead the strategy but don’t dictate it
Stay alert to symbolic impact of one’s actions
Ensure all major power bases have access to top managers
Inject new views when considering major changes
Minimize political exposure on highly controversial issues

35. Role #6: Lead the Process of Making Corrective Adjustments
Requires both
Reactive adjustments
Proactive adjustments
Involves
Reshaping long-term direction, objectives, and strategy to unfolding events
Promoting initiatives to align internal activities and behaviour with strategy