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BOOK REVIEW: Why strategy is so tough at the top

Apr 26 2016 07:21
Ian Mann

The Strategy of Execution: A Five-Step Guide for Turning Vision into Action, by Liz Mellon and Simon Carter

A THOROUGH and thoughtful strategy review should be on the annual events calendar of every business. Sometimes the strategy may need to be revised or altered, sometimes not, but the review must always, without exception, focus on the quality of the execution. A great strategy can improve a company’s revenues, and even save it from what might otherwise be certain decline.

This book is an unusual contribution to the field of strategic thinking, not because it deals with execution, which it does extremely well, but because it looks at the execution of strategy in huge, multinational corporations. I have not come across any quality writing that is as accessible to the people who should read it as this book.

Many problems accompany implementation of strategy in huge business.

The authors have distilled the method into five sequential steps making it easy to grasp, if excruciatingly difficult to execute. “Moving from strategy to execution has always been tough,” note the authors, but in huge companies this is even tougher. “Once you have sign-off on the strategy itself, how do you make it happen for real?”

We have long held the belief that the strategy execution bottleneck was at the bottom of the pyramid. It was the lowest levels that prevented the right things getting done. Whether this was ever true or not, the bottleneck today is at the top of the bottle, within the Top 100 of these huge companies. The authors have observed that “if they as a community don’t actively support a strategy, it is dead in the water”.

Step one is to understand why those at the very top of the organisation are the bottleneck, while so necessary to the execution of strategy. Clearly if they are not committed to the strategy, all other execution efforts will be diluted.

In the huge organisation, the Top 100 are spread all over the company, across the globe. It is hard for these executives to identify themselves as part of rarefied community with a special responsibility for strategy execution in the organisation as a whole. There are many reasons for this.

One is surely that it is impossible to feel the community spirit if you only meet once a year, and then only for a few days. This can be rectified by ensuring that the Top 100 meet more than once a year, for a little longer than two days.

But there are far more complex issues, not as easily solved. Spread across the business, each of the Top 100 are personally accountable for delivering results in their part of the world. This personal responsibility makes it unlikely that they will see themselves as enterprise-wide leaders.

The manner in which most leaders are developed and then selected for the Top 100 makes them uniquely ill-qualified for the strategy leadership task for which they are required.

According to Forbes, the largest 2 000 companies in the world produce $36trn in revenues and employ 83 million people, an average of 41 500 people each. Those at the top are a miniscule percentage of all those in the race up the organisation.

How do you win a race like that? You win the competition by outdoing your colleagues, being smarter, faster, more dedicated, or harder-working than they are. “They learn to compete, to win personally, more than they learn to collaborate to win as an organization,” the authors point out. And yet to be effective at leading the strategy execution they need to unite – the opposite of the characteristics that got them to the top.

Intelligence too high, EQ too low

The second impediment is that they are all too intelligent. Executives have an average IQ of 125 or more, putting them in the top 3% of the population. They need this capacity to deal with the complexities of their work. Their emotional intelligence, however, is frequently underdeveloped and is exercised far less than their IQ.

Strategy execution involves a change, often difficult and persistent. This inevitably raises emotional issues in the company. The authors have observed that “executives continually and mistakenly try to lead an emotive topic like change with too much thinking”.

Their arrival at the top, based on IQ not EQ, explains this mistake. "Where most strategy books recommend 'communicate, communicate, communicate,' we recommend 'connect, connect, connect'," Mellon and Carter explain. Connecting is emotional work.

CEOs cannot transform an organisation on their own; they need the support of this ‘guiding coalition’, this strong set of peers, on their side. The first steps in the execution process are to forge this group into a highly effective team, and into a group of individuals capable of intelligent and emotionally appropriate behaviour.

So critical to the success of the strategy are the Top 100 that those who do not transform, need to be replaced with those who do.

The final step in this five-step process is to build endurance for the marathon of strategy execution. Businesses all aim to move fast and capture benefit quickly. However, consistently trying to move too fast fails to produce the needed results because of a lack of ownership, direction, traction, and belief.

The formulation of strategy may be a sprint, but the execution of strategy is a marathon. The book ends with insights and ideas on how to make people fit for this long-haul task. This requires a combination of resilience, adaptability, and perseverance.

This book is a practical guide to executing strategy across the span of huge companies. It is designed to both explain why execution in huge businesses is so difficult, and what do about it. I have touched only on the starting point. There is much, much more to both understand and to correct.

Readability:   Light --+-- Serious
Insights:       High -+--- Low
Practical:       High +---- Low

* Ian Mann of Gateways consults internationally on leadership and strategy and is the author of Strategy that Works. Views expressed are his own.


ian mann  |  opinion  |  book review
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