Introduction:

A sophisticated strategy is required for getting into the competitive advantage, but effective
execution is the must for sustaining competitive advantage. Unfortunately, the organizations are
lacking the effective execution in most of the cases (that is employees at three out of every five
companies said their own organization is weak at execution). In other way, after analyzing a
database of 125,000 profiles around the World representing more than 1,000 organizations
claimed that their organization failed to translate important strategic and operational decisions
quickly into action. In this regard, researcher panel of Gary L. Neilson, Karla L. Martin and
Elizabeth Powers worked for five years to draw a conclusion around the secrets of successful
execution. They started by drawing up a list of 17 traits and to gather empirical data to identify
the actions that were most effective in enabling an organization to implement strategy. After
analyzing a thousand of online responses, they concluded that there are four fundamental
building blocks greatly influences execution-clarifying decision rights, designing information
flows, aligning motivators, and making changes to structure.

Traditionally it was believed that execution is best affected by structure. Yes, definitely structure
has its effect but not at the highest level. Rather research shows that decision rights and
information flow are far more important about twice as effective as improvements made to the
other two building blocks structure and aligning motivator. In persuasion of improvement, most
organizations go right to structural measures as obvious solution and the changes are visible and
concrete. Interestingly, although such steps generally reap some short-term efficiencies quickly,
but organizations found themselves in same problem after some years! So, structural change is a
part of the path to improved execution, but not the first and foremost part. For example, a global
consumer packaged-goods company tried to improve execution by structural change in
organization but found themselves in place where they started after few years.

It is further important to find out visible the underlying cause of poor execution that is—how
people made decisions and how they were held accountable. Strategy fails because employees
don’t know exactly what responsibilities they are entitled to do and for what they are
accountable. Decision right is that which ensures everyone in the organization knows which
decisions are and actions they are responsible for. In example we have seen an organization
where managers hadn’t a clear sense of their respective roles and responsibilities. Moreover, the
link between performance and rewards was weak. The company was long on micromanaging and
second-guessing, and short on accountability. After understanding the root cause, the company
designed new management model that ensures the accountability and decision rights off
managers and made the connection between performance and reward. This way the company
reaped a dramatical change in execution.

Another important component for proper execution is facilitating information flow across
organizational boundaries. information flow can be defined as the making sure of important
information about the competitive environment flow quickly to corporate headquarters. For
example, at one insurance company accurate information about projects viability was censored
as it moved up the hierarchy. To improve information flow to senior levels of management the
company took steps to create a more open, informal culture. That enables them a quick
information flow mechanism from field to corporate level.

The elements of strong execution:

After decade of practical application and intensive research, the researchers set out to gather
empirical data to identify the actions that were most effective in enabling organization to
implement strategy. They tried to find out what particular ways of restructuring, motivating,
improving information flows, and clarifying decision rights mattered the most? Starting with a
list of 17 traits, each corresponding to one or more of the four building blocks, they ranked all 17
traits to their relative influence in execution. Here we will go through top five traits.

1. Everyone has a good idea of the decisions and actions for which he or she is responsible.
In companies strong on execution, 71% of individuals agree with this statement; that figure drops
to 32% in organizations week on execution.

With the maturity in size, blurring of decision rights tends to occur. Small or young
organizations are generally emphasize getting things done rather than defining roles and
responsibilities clearly. As the company grows, things become complicated ad executives come
and go and over time the approval process gets ever more difficult. It becomes increasingly
unclear where one person’s accountability begins, and another’s ends.

An example from one global consumer-durables company found this out the hard way. It was so
rife with people making competing and conflicting decisions that it was hard to find anyone below
the CEO who felt truly accountable for profitability. The company was organized into 16 product
divisions aggregated into three geographic groups. Each of the divisions was charged with
reaching explicit performance targets, but functional staff at corporate headquarters-controlled
spending targets. Decisions made by divisional and geographic leaders were routinely overridden
by functional leaders. Overhead costs began to mount as the divisions added staff to help them
create bulletproof cases to challenge corporate decisions. Decisions stalled while divisions
negotiated with functions, each layer weighing in with questions. Functional staffers in the
divisions (financial analysts, for example) often deferred to their higher-ups in corporate rather
than their division vice president, since functional leaders were responsible for rewards and
promotions.

The new chief executive chose to focus less on cost control and more on profitable growth by
redefining the divisions to focus on consumers. As part of the new organizational model, the
CEO designated accountability for profits unambiguously to the divisions and also gave them the
authority to draw on functional activities to support their goals (as well as more control of the
budget). It helped that the CEO brought them into the organizational redesign process, so that the
new model wasn’t something imposed on them as much as it was something they engaged in and
built together.

2. Important information about the competitive environment gets to

headquarters quickly:
About 77% of individuals in strong execution organizations and about 45% of individuals of
weak execution organizations agree with this statement which was found in a research. If
headquarters have accurate and up to date market intelligence then it can serve a powerful
function in identifying patterns and spreading best practices throughout business segments and
geographic regions. Otherwise, it will tend to impose its own agenda and policies rather than
defer to operations that are much closer to the customer.

Managers start to restructure the strategy when a company fails to execute it. Research shows
that the fundamentals of good execution start with clarifying decision rights and making sure
information flows where it needs to go. Top executives are free to focus on more global
strategic issues by delegating operational responsibility to the people closer to the action to
ensure the way that the right information flow to headquarters. From survey research, it is
found that there are 17 fundamental traits that makes organizations effective at implementing
strategy.

3. Once made, decisions are rarely second-guessed:

A more senior and broader enterprise perspective should add value to a decision and managers
up the line should not be adding incremental value rather they should be stalling progress by
redoing their subordinates’ jobs while, in effect, shirking their own. About 71% individuals in
weak execution companies thought that decisions were being second-guessed, whereas about
45% individuals in strong-execution companies thought that way. If people have a clear idea of
what decisions they should and should not be making, holding them accountable for decisions
feel fair. Clarifying decision rights and responsibilities also improve the organization’s ability to
track individual achievement, which help it to chart new and appealing career-advancement
paths.

4. Information flows freely across organizational boundaries:

When a unit of a company passes information vertically instead of horizontally in different parts
then it loses economies of scale and transfer of information will not effective. It also loses the
opportunity of developing managerial structure in the operations sector.

There is a myth about business- to –business company where there were lacking of collaboration
to serve large,cross product customers. The company established customer-focused marketing
group but there were lacking of clear and consistent progress reports to the product units and also
conversation with the regular cross-unit management about performance matters. The customers
couldn’t found company in their critical and multiproduct issues such as potential trade-off and
volume discounts. When the market became more competitive, customers find the firm as
unreliable and difficult supplier and they reluctant to enter into favorable relationship.

The customer division solves this problem by issuing regular reports to the product units about
performance, by product, geographic region and for supplying a supportive root-cause analysis.
They also arranged time to time meeting to discuss different issues. This increases organizational
trust which was essential for collaboration.

5. Field and line employees usually have the information they need to understand the
bottom-line impact of their day-to-day choices:

Managers should serve the necessary information to the bottom line employees about their
decisions regarding goals. For example- In combining operations of small regional banks
managers had chosen to separate front-office bankers who failed to institute the necessary
information and motivation links to ensure easy operations. For this reason they pursued separate
goals. For example- When a company makes customized deals with clients the cost increases and
the salespeople are unaware about that because of not understanding cost and complexity
implications and finally the management cannot control the rising cost at the year- end which
reduces profits.

To solve the problem executives make end-to-end processes which allows customization only in
selected circumstances. They established supporting processes and serve analytical tools to
salespeople with accurate information and also make common back-office operations to ensure
same data and metrics when making decision about customization of product. Thus a way
cooperation increases and they act for company’s best interests.

Transformation programs
Transformation programs are typically established to produce a step function increase in organizational
performance and to develop new capabilities that previously did not exist in the organization. It is

a change management strategy which can be defined as any shift, realignment or fundamental
change in business operations.

The four building blocks that manager can use to improve strategy execution

 Decision rights
 Information
 Structure
 Motivators
The aim is to make changes to processes, people or systems to better align the company with its
business strategy and vision.

A Business Transformation Framework

Creating a transformation program:

Identify the sources of the problem

Understanding company’s areas of weakness

Actions should be geared toward strengthening.

Map out the people, processes and systems that support the delivery of your product or service to
customers

Appointing leaders to provide oversight and support for the transformation program is key

The implementation plan determines the changes that need to be made and when and outlines all the
sub-projects that make up the transformation program

Set up programmed management in each individual work stream Information did not flow freely across
organizational boundaries.

Pushing certain decisions down into the organization to better align decision rights with the best
available information

First take steps to address decision rights and information, and then design the necessary changes to
motivators and structure to support the new design, those are the steps of building a transformation
program.

The business transformation program doesn’t end once the change has been implemented. Embedding
and integrating new ways of working or new systems into the business takes time and can be complex.

Mapping
Business process mapping refers to activities involved in defining what a business entity does, who
is responsible, to what standard a business process should be completed, and how the success of a
business process can be determined.

A brilliant strategy, blockbuster product, or breakthrough technology can put on the competitive map,
but only solid execution can keep it there.

Execution is the result of thousands of decisions made every day by employees acting according to
the information they have and their own self-interest. There are some fundamental building blocks
executives can use to influence those actions clarifying decision rights, designing information flows,
aligning motivators, and making changes to structure.
The benefits of business process mapping include:

 Corporate clarity around the process

 Systematic control over how the process functions Established operational norms
 Elimination of redundancies Increased process visibility
 Better compliance with industry standards More uniform employee training
 Mapping improvements to the building blocks:
 For improving mapping analysis of both outside and inside the organization is important , since
the market to be served is outside the organization and the capabilities for making the strategy
work are within it.

Look outside to identify threats and opportunities

At the highest level, strategy is concerned with the external market and how the firm’s resources should
be allocated to create an exploitable advantage. There are always threats: new entrants, demographic
changes, suppliers who might cut you off, substitute products that could undermine your business, and
macroeconomic trends that may reduce your customers’ ability to pay.

Look inside at resources, capabilities, and practices

Resources and internal capabilities can constrain your choice of strategy. A strategy to exploit an un-
served market in the electronics industry might not be feasible if your firm lacks the necessary financial
capital and human know-how.

Business Strategy

This one is a no brainer, but often poorly thought through by leaders. Usually the business has a
strategy, whether realistic of not is often debatable.

 Applying the Principles of Decision Making

 Identify the purpose of the decision. Gather information.
 Identify principles with which to judge the alternatives Brainstorm and list a wide variety of
possible choices. Generate as many likely solutions as possible.
 Evaluate each choice in terms of its consequences, using predetermined standards and
judgment criteria to determine the pros and cons of each alternative.
 Settle upon the best alternative. This becomes much easier once the above steps have been
undertaken.
 Translate the decision into a specific action or plan of action steps. Carefully execute the plan.
 Evaluate the outcome of the decision and subsequent action steps. Within this process it is
important to identify the lessons learned.

Clarify and questioning

Clarify and streamline decision making at each operating level. And Focus headquarters on important
strategic questions.

Align Business Strategic KPIs

  Establish Key Performance Indicators (KPI) linked to achieving the business strategy.
 Identify Core Processes
 Identify the core processes that will ensure delivery of the business strategy measured through
the aligned KPIs.
 Map the Core Processes and Capture in the Process Hous
 Map the core processes that typically span across the business and may even flow back from
suppliers and forward into the delivery channel.

Communicating

Make sure important information about the competitive environment flows quickly to corporate head-
quarters. That way, the top team can identify patterns and promulgate best practices throughout the
company.

Maintain Quality Excellence

All improvements that are made on a process must be sustainable. Best practices should be shared
across the organization and immediately implemented across similar processes.

 Motivators
 Create cross-functional teams.
 Introduce differentiating performance awards.
 Expand nonmonetary rewards to recognize exceptional performers.

Business Process Management holds the promise of providing a holistic approach to ensuring process
are well oiled and remain so while adapting with agility and flexibility to an ever changing and
increasingly demanding business environment

Test-Drive Your Organization’s Transformation

Test-Drive Your Organization’s Transformation

You are faced with dozens of levers you could conceivably pull if you had limited time and re-sources.

Whether you want to think of transformation as business transformation or not, there’s already a body
of relevant good practice available to organizations in the form of The Business Transformation. It’s a
practical frame of reference to help organizations design, develop, plan, and govern organizational
change.
In efforts to improve performance, most organizations go right to structural measures because moving
lines around the org chart seems the most obvious solution and the changes are visible and concrete.
Such steps generally reap some short-term efficiency quickly, but in so doing address only the symptoms
of dysfunction, not its root causes.

There are 5 Effective method of test drive the transformation Business

1. Understand the Opportunity and Benefits

The most successful organizations are the ones that can adopt and adapt new ways of working to stay
aligned with customer and business needs, with the ability to continue to deliver and improve on what’s
needed.

Being flexible enough to accommodate new or changed needs requires organizational change
capabilities; but all too often, those involved can forget key information or miss an important activity or
step because they don’t have the right structure and support in place.

2. Build a Solid Foundation of Strategic Understanding

The first rule is driving the business transformation. Have a long-term plan, and a strategy that clearly
sets out your mission, vision, and core values including specific and measurable objectives. Consider
both the high-level primary objectives from senior management Use knowledge management to
centralize models, goals, and information. Valuable organizational knowledge shouldn’t just exist in
people’s heads no matter how senior they are Clarify and articulate your strategy so that it’s clear and
understood by all.

3. Build an Action Plan

Action items are specific deliverables that must be carried out to meet the desired outcome. Put simply,
action items are the steps that take you from the current state to the desired future state by making
small, specific improvements along the way. Which part of the organization is affected and what
specifically needs to change. Listing and categorizing your action items gives your organization the
beginnings of a plan as well as the starting point for your “business transformation portfolio.

4. Draft Your Business Transformation Portfolio

Clustering the action for projects grouping, action items together so that they logically fit for projects.
This can be done by grouping items by relationships, service, or business domain.

Defining the projects to prioritize each cluster of action items is a candidate project, something that can
be elaborated on and drafted into a project charter for formal consideration.

Prioritizing the projects by scoring each candidate for value-add and risk.

5. Effectively Manage the Complexity:

Most organizations are varied and complex and, in order to be effective in organizational change, they
need to be able to proactively manage their complexity.

The BTF helps organizations to do this by breaking down the organization into four categories, or
aspects, such that they can be worked on in structured, achievable chunks. The four aspects are:

 Processes and organization – the work that the organization carries out in order to deliver
products and services to end customers
 IT infrastructure and facilities – the IT equipment and facilities needed for applications,
employees, and the carrying out of organizational tasks

Conclusion:

After all discussion we can say, only good strategy is never enough rather good strategy backed
by great execution results in superior performance. For better execution, defining decision rights
and information flow is particularly important. If companies are to solve their execution
problems primarily or solely with structural or motivational initiatives, they will continue to fail.
If they do so, they may enjoy short-term results, but they will inevitably go back to face same
situation as they have not addressed the root causes of failure. These failures can almost always
be solved by ensuring that people utterly understand what they are responsible for and who
makes which decisions—and then giving them the information, they need to fulfill their
responsibilities. Only then structural adjustment and motivational alignment will ensure better
execution.