Chapter 12: Implementing Strategy

Question 1

Larry Bossidy recipe for execution

There are four steps
to consider when execution is the issue:

Answer 1

(1) create a set of clear goals for people to follow;
(2) find ways to accurately measure
performance;
(3) hold people accountable for their performance; and
(4) richly reward those who perform well

Question 2

Alignment definition

Answer 2

A condition where organizational elements fit
together and reinforce each other.

In an aligned
organization all the elements support the strategy

Question 3

The seven Ss

Answer 3

1) strategy,
2) structure,
3) systems,
4) staffing,
5) skills,
6) style,
7) shared values

Question 4

1) Strategy

Answer 4

Strategy definition: The plan or process that
creates and sustains a competitive advantage for a firm

Strategy represents the most important S.

The ultimate goal of any organization is excellent performance, whether it is a business, government,
or not-for-profit

Strategy enables an organization to perform well by guiding resource allocation
decisions that result in competitive advantage

Question 5

2) Structure

Answer 5

Structure answers two critical questions for an organization: Who does what? Who reports to
whom?

Structure definition: The set of organizational arrangements that divide labor and tasks. Structure
also defines reporting or authority relationships.

If you want to understand an organization’s structure, look at its organization chart.

Companies may also want to structure using one of two Ms: a matrix structure or an M-form corporation

Question 6

3) Systems

Answer 6

Systems definition: Mechanisms, policies, or processes that coordinate and control the work of the different
units of the organization.

Systems play two important roles: They coordinate and control work of the different units within the organization

Question 7

4) Staffing

Answer 7

Staffing definition: The processes in the organization for recruiting, hiring, training, and deploying human capital.

Finally, some companies promote from within, while others tend to hire from the outside.

Question 8

5) Skills

Answer 8

Skills definition: The abilities of individuals, groups, or organizations to perform tasks.

Refer to the abilities of individuals within the firm, as well as how the firm has combined those individual talents to build capabilities (processes), to create a competitive advantage

The relationship between skills and staffing is shown as companies either hire people who have the skills they need or develop workers in-house through training.

Question 9

6) Style

Answer 9

Style definition: The interpersonal relationships and patterns of interaction that organizational
members consider appropriate and legitimate.

Refers to the interpersonal relationships between people in the organization and, along with shared values, comprises the culture of the organization

Style generally falls into one of two categories: formal or informal.

Question 10

7) Shared Value

Answer 10

Shared Value definition: The priorities, values, and virtues that members of the organization see as
important.

Some people use the term superordinate goals, a set of high-level goals that all stakeholders agree on, to capture the same thing as shared values

Question 11

Superordinate goals

Answer 11

Highlevel, abstract goals that all stakeholders agree on to guide organizational action.

Question 12

Many companies choose to make their __________ explicit in a mission statement, or a statement of vision and values

Answer 12

shared values

Question 13

Hard triangle

Answer 13

The elements of strategy, structure, and systems in
the 7 S model. The hard triangle represents a set of “hard” levers that managers can quickly pull to
create alignment or realignment.

Hard doesn’t refer to difficulty, but, rather, tangibility

Question 14

Soft square

Answer 14

The elements of style, staffing, skills, and shared

values. Soft square elements are often difficult to codify and usually take a long time to influence and change.

Question 15

The first time an entrepreneur sets a strategy to create unique value for customers in
a particular market, she aligns the organization with that strategy

Answer 15

At every other point in a
company’s history, a change in strategy requires realigning the organization with the new
direction.

Question 16

Is changing the 7Ss easy?

Answer 16

Recent evidence puts the failure rate for organizational change at 60 percent to 70 percent,
and that percentage has not changed for several decades

Question 17

The Three Phases of Change

Answer 17

1) Unfreezing
2) Changing
3) Refreezing

Question 18

unfreezing definition

Answer 18

The first step in organizational change. It begins
when leaders recognize and publicly admit that the current situation is not producing acceptable or adequate results.

When individuals, groups, or companies make a “stop doing” list, they have begun the process
of unfreezing

Question 19

change process

Answer 19

The middle step in organizational change that a
company engages in to adapt to its environment and learn new behaviors.

the most difficult part of the process.

Question 20

refreeze

refreezing

Answer 20

The last phase of organizational change. This
step involves formalizing and institutionalizing new behaviors, methods, processes, or routines.

To make change permanent, individuals and companies have to do the hard work of
aligning the rest of their activities to support the change

Question 21

The Eight Steps to Successful Change

Answer 21

1. Generate a sense of urgency
2. Build a guiding coalition
3. Create a vision
4. Communicate the vision
5. Empower individuals to act
6. Garner short-term wins
7. Consolidate gains and move on for more change
8. Institutionalize the change

Question 22

1) Generate Urgency

Answer 22

People and organizations won’t change without a reason. In fact, organizations have been designed to ensure stability and that the same regular processes
will happen over and over again

That means
looking at larger environmental trends, spending time with customers, suppliers, employees,
or stakeholders to gather data, and then creating a compelling case that will help people see,
understand, and also feel the need to change

Question 23

2) Build a guiding coalition

Answer 23

Effective change requires that many people see and feel the urgency, and those with the power to change the organization grasp the sense of urgency and actively work to create change

Question 24

Guiding coalition

Answer 24

A group of influential people from all levels in the organization that support and lead the change effort.

All members have power
within their own work groups, either as formal managers or directors, or informally having
earned the respect, admiration, and ears of their peers

Question 25

3) Create a vision

Answer 25

A meaningful vision is a clear statement of where the organization wants to go, and what life will be like when the change has been successful

However, without a clear vision of where they are going, people are either unable to move or they move in many different directions all at once.

Question 26

Vision

Answer 26

A clear statement of desired outcomes and endpoints

for organizational change.

Question 27

What helps a company unfreeze

Answer 27

The first three tasks—generating an urgency, building a coalition, and creating a vision—
help the organization unfreeze

Question 28

What helps organizational members alter

their behaviors and work patterns and create the change.

Answer 28

The next three tasks— communicating the

vision, empowering action, and garnering short-term wins

Question 29

4) Communicate the Vision

Answer 29

Many managers don’t communicate that vision clearly enough or often enough. They might communicate
through a memo or a post on the company’s intranet site

Managers who successfully lead change overcommunicate their vision.
They keep repeating the message even after they are sure most people have heard it.

Question 30

5) Empower Action

Answer 30

Leaders and managers want creative behavior and new solutions, but many organizational cultures and systems punish creative behavior or new solutions that don’t work

Empowering people to act certainly means giving them authority to try new practices, but
it also means giving them the knowledge and resources they need to engage in new practices

Question 31

Empowerment

Answer 31

A grant of authority, formal or informal, that
allows organizational members to try new practices. Empowerment includes giving members the
knowledge and resources they need to engage in new practices successfully. It also includes a safety
net for people should they fail.

Question 32

6) Garner Short-Term Wins

Answer 32

Wise managers begin with projects that require the least change and have a high probability of success.

Short-term wins create both credibility and momentum that encourages key organizational members to get off the fence and work to make the change successful.

Question 33

How long can it take to communicate the vision, empower, and create short-term wins?

Answer 33

The three tasks that accomplish the bulk of the change, communicating the vision,
empowering action, and creating short-term wins, can take one to two years.

Question 34

7) Consolidate Gains and Press On

Answer 34

The clever manager might be honored at a company dinner and given a nice bonus, and people would assume the change effort was complete.

If a company stops after creating a few high-profile wins and fails to press ahead to work on the deeply rooted behaviors, policies, and practices that must change for a true realignment to occur, much of the value of the change effort will have been wasted

This is the least glamorous and longest task of successful change, but the one that truly prepares the organization to refreeze

Question 35

8) Institutionalize Change

Answer 35

To institutionalize something is to make it so essential
that it is taken for granted and becomes part of the central values of the culture.

Managers institutionalize changes primarily through three of the 7 Ss: systems, staffing, and shared
values

Finally, strategic changes always alter the shared values of the organization

Question 36

Institutionalize definition

Answer 36

When an organizational element or practice becomes so essential that its value is taken for granted.

Question 37

Timeline for implementing change

Answer 37

The silent phase (unfreezing) - ½–1½ years

The Active Phase (Change) - 1-2 Years

Completion (Refreezing) - 4-7 Years

Question 38

Measurement

Answer 38

In fact, measurement represents a general need for assessing whether any strategy, new or existing,
works.

An effective measurement system helps everyone, from top management to
front-line employees, understand how their daily work contributes to strategic success

Question 39

Principle of line of sight

Answer 39

The notion that individual members in an organization should be able to connect their daily work and tasks to the overall strategic goals of the organization.

Question 40

Line of Sight

Answer 40

If you have a very clear idea of the company’s overall strategy, and understand your role in furthering that strategy, you would have the tools to help decide which of the many urgent tasks is the most important.

If, however, the strategy is clear and explicit about creating value through low cost, a customer-centric differentiation, or bold product innovation, then you have more guidance and you can make a better decision

The line of sight principle recognizes that grand strategies don’t just happen, they come to
fruition only as individual managers and employees make decisions about how to allocate the
valuable resources they control

Question 41

Balanced scorecard

Answer 41

A tool that measures four broad areas of
organizational performance: financial results, customer goals, internal business processes, and
learning and growth.