Created by Kudernatsch Consulting
Many companies find it difficult to formulate their strategy in such a “catchy” way that its implementation is possible for their employees top-down in their daily work – across departments and functions.
I just gained this experience again at a medium-sized industrial company that is currently the third largest supplier worldwide in its field. Its board of directors asked me to conduct a strategy implementation workshop with senior management because, according to the CEO, the company was “not getting its strategy to work.”
Entrepreneurial pipe dream or strategy?
In preparation for the workshop, the CEO promised to send me the strategy papers that a strategy consulting firm had prepared for his company almost a year earlier. Two days later, I received a stack of papers several hundred pages thick. In it, the consulting firm had formulated the corporate strategy based on several scenarios – illustrated with numerous charts.
Fortunately, the stack of papers contained a management summary. It showed that the company aims to become the world market leader in its market in the medium term – among other things by becoming the innovation, technology and service leader in this market.
When I read this, I couldn’t help smiling, because somehow I had the suspicion: The strategy consulting firm has already sent similarly formulated strategy papers to several industrial companies, because what executive board member doesn’t dream of his company becoming the world market leader, innovation leader, etc.? However, it was not clear to me when reading the documents what this actually means and how the company intends to achieve this goal.
Strategy implementation means asking “how-to-do” questions
So, in the run-up to the strategy implementation workshop, I held lengthy telephone conversations with the board members as well as several division managers of the company – including those responsible for “Sales”, “Finance” and “Innovation, Research & Development”.
It didn’t make the strategy much clearer to me. It is true that all interviewees used largely the same vocabulary to describe the strategy. But every time I asked.
- “What does that mean?”
- “In what does it show?” and
- “How do you achieve this goal?”
I received very different answers – depending not only on the person’s area of responsibility in the company, but also on their individual market view.
This was followed by the questions for me:
- How is the company ever going to make its strategy work – across divisions and functions – if there isn’t even a consensus at the top level about what it means? And:
- How will the company ever break down its strategy top-down if it is not even clear to the top level which stage or breakthrough goals need to be achieved in order for the company to reach its strategic goals, such as becoming the world market leader, technology leader, etc.?
Strategy implementation workshop with the top team
I also reflected this to the Board, and this was also a topic in the two-day workshop on strategy implementation. In it, under my guidance, the top managers actually always asked themselves the following questions in relation to the various goals:
- What does that mean – for the company as a whole as well as the individual areas such as research & development, production, sales, etc.?
- What shows that we have achieved the goal – in terms of the company as a whole and the individual divisions?
- Which sticking points need to be mastered or which breakthrough goals need to be achieved in order to reach the overall goal – in relation to the company as a whole and the individual divisions?
- What measures/changes are necessary to achieve the breakthrough goals as well as the higher-level goals – at the level of the entire company and the individual divisions?
Keep a realistic view when developing strategy
That’s really all we did in the strategy implementation workshop. This sounds simple and banal, but practically it was not. In the discussion, for example, about which changes would be necessary in order to achieve the desired goals such as becoming world market leader, technology leader, etc., it became clear that the opinions of the participants on this matter differed widely. In addition, the goal of becoming the world market leader is rather unrealistic to achieve due to the company’s resources and the current turbulence in the market, which – according to the unanimous opinion – will not become less in the coming years. Therefore, the strategy was “modified” to the effect that the company primarily strives for technology leadership and wants to be the premium provider in its market.
Tools:Thebackbone of the strategy implementation processMaintainingfocus
In order to achieve these strategic goals and the associated breakthrough targets, as well as to define and coordinate the measures required for this purpose, the company also decided to introduce the Hoshin Kanri management system as well as several pragmatic strategy implementation tools, because the workshop participants agreed that without such tools, which form the backbone of the strategy implementation process, so to speak, cross-departmental and cross-functional coordination of the goals and measures, as well as breaking them down to the operational level, is not possible in large companies with group-like structures. However, this in turn is one of the central prerequisites for creating the necessary energy for change within the organisation.
Everyone must know what his contribution is
This is in line with my experience gained in over 20 years in more than 100 strategy implementation projects. They showed time and again that consistent strategy implementation in day-to-day operations also requires smart tools and pragmatic methods that make the strategy transparent, concrete and understandable, get to the heart of the matter and coordinate cooperation – so that everyone knows what their contribution is to achieving the goals.
Yours Daniela Kudernatsch