Raymond Levitt Stanford University. BI Oslo PM Breakfast Seminar June 17 th, 2011

Transcription

1 Raymond Levitt Stanford University BI Oslo PM Breakfast Seminar June 17 th, 2011

2 Executing strategy tops the list of CEO challenges! *Source: The Conference Board, CEO Challenge 2007, New York 2

3 Why have a strategy? A well-designed and well-executed strategy allows a firm to earn above-average profits in its industry over the long term 3

4 What is Strategy? Strategy is about adding value through a mix of activities different from those used by competitors. Michael Porter, strategy guru 4

5 An organization's real strategy is the portfolio of strategic projects in which it invests Real strategy! Official strategy 5

6 Strategic goals & portfolio are both moving targets Strategic Portfolio! Strategic Goals 6

7 Executing Your Strategy in a Nutshell 1. Do the right projects! Strategy-Making 2. Do the projects right! Project Execution 3. Continually review and realign (1) and (2)! Engagement 7

8 Fragmented Literature on Strategy Making 8

9 SEF s Strategy-Making Imperatives Ideation Know who you are, why you exist and where you are going! Nature Align your strategy, structure and culture! Vision Continually rearticulate your desired strategic outcomes! Strategy 9

10 SEF s Strategy-Making Imperatives Ideation Know who you are, why you exist and where you are going! Nature Align your strategy, structure and culture! Vision Continually rearticulate your desired strategic outcomes! Strategy 10

11 The Power of Strong Ideation Toyota s G21 Ideation The Norwegian Truth 11

12 The Strategy-Making Imperatives: Ideation Know who you are, why you exist and where you are going! Nature Align your strategy, structure and culture! Vision Continually rearticulate your desired strategic outcomes! Strategy 12

13 What kinds of strategic initiatives should Southwest Airlines' employees EMPHASIZE vs. NOT EMPHASIZE? Source: Porter, Michael. "What is Strategy?" Harvard Business Review HBR OnPoint Enhanced Edition, Product Number: 4134 (February 1, 2000). 13

14 The Strategy-Making Imperatives: Do the right projects! Ideation Know who you are, why you exist and where you are going! Nature Align your strategy, structure and culture! Vision Continually rearticulate your desired strategic outcomes! Strategy 14

15 Misalignment: Ideation? vs. Nature?? 15

16 Aligning the Strategy-Making Domains (within and across domains) Purpose Ideation Identity Long-range Intention Nature Culture Goals Vision Structure Strategy Metrics 16

17 The Project Execution Imperatives: Do the strategic projects right! Portfolio Synthesis Execute strategic projects & programs flawlessly Transition Transition your project benefits into operations, and reinvest project resources! 17

18 Failure of Synthesis - Software AT&T Wireless Odyssey project 18

19 Failures of Synthesis Hardware Outsourcing components on fast-track product development efforts Lockheed Launch Vehicle- I Boeing 787 Dreamliner 19

20 Develop project management maturity for today s turbulent times 1960s PM 1.0 project management served the needs of construction, aerospace/ defense and big pharma in 1960s Original Baseline plan remains good plan! Measure actual performance Track and stamp out variances to make the world conform to your plan! PM 2.0 serves today s fast-paced industries (decentralized, lean) Continually question key planning assumptions Decentralize, revise plans frequently Plan in detail only as far out as you can see clearly Track issues to ensure speedy resolution 20

21 The Project Execution Imperatives: Do the strategic projects right! Portfolio Synthesis Execute your strategic projects and programs flawlessly! Transition Transition your project benefits into operations, and reinvest project resources! 21

22 Aligning the Strategy Execution Domains Portfolio Synthesis Program Project Transition Operations 22

23 The Critical Role of the Engagement Imperative Strategy Making Nature Ideation Vision External Environment Engagement Strategy Portfolio Continually reinvest in the optimal portfolio of strategic projects to achieve desired strategic outcomes! Strategy Execution Synthesis Transition 23

24 Strategic goals & portfolio are both moving targets Strategic Portfolio! Strategic Goals 24

25 Engagement: The Clutch Disk of Strategic Execution Strategic Intent Strategic Portfolio

26 Engagement: A Brain Analogy External Environment Right Brain Strategy Making ` Corpus Calossum Engagement Left Brain Project Execution

27 Two Kinds of Engagement Failure Motorola's Iridium Program The world turns while the project churns! The Airbus 380 launch The best laid plans of mice & men go oft awry! 27

28 Invest in the right portfolio of projects to achieve your desired strategic outcomes Articulate your strategy clearly Specific strategic goals and outcome metrics help guide engagement decisions at every level of the organization Don't invest in too many projects Doing the right projects means not doing too many of the wrong projects! Be sure to invest in the hidden projects of strategic alignment Misalignment among the strategy-making and engagement imperatives will severely impede execution of your strategy Review and replan the project portfolio frequently Create an agile engagement process to reallocate investments continually as strategy evolves, and as projects go awry 28

29 Executing Your Strategy in a Nutshell 1. Do the right projects! 2. Do the projects right! 3. Continually review and realign (1) and (2)! 29

30 Six Imperatives of Strategic Execution: IDEATION NATURE VISION ENGAGEMENT SYNTHESIS TRANSITION Know who you are, why you exist and where you are going! Align your strategy, structure and culture! Continually rearticulate your desired strategic outcomes! Continually reinvest in the right portfolio of strategic projects to achieve desired strategic outcomes! Execute your strategic projects and programs flawlessly! Transition your project benefits into operations, and reinvest the project resources! 30

31 Aligning All Six Domains of the SEF Purpose Strategy Making Nature Ideation Structure Identity Culture Strategy Long-range Intention Goals Metrics Vision The INVEST Strategic Execution Framework Strategy Execution Engagement Synthesis Transition Program Portfolio Operations Project 31

32 Ideation Purpose Identity Questions Culture Long-range Intention Goal Nature and Structure Strategy Engagement Portfolio Synthesis Discussion Program Project Transition Operations Vision Metrics

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34 Detailed Example: Nature Imperative Align the organization s strategy with its culture and structure! Ideation Purpose Culture Identity Long-range Intention Nature Structure Strategy Goal Vision Metrics Engagement Synthesis Portfolio Program Project Transition Operations Raymond IPSolutions E. Levitt. and All rights Stanford reserved. Advanced Project Management. All rights reserved. 34

35 Align the winds & currents of strategic execution Strategic Goal 35

36 Geoffrey Moore s Four Strategic Value Disciplines Cost leadership Operational excellence Superior execution as measured by productivity and, ultimately, lower cost Value Differentiation (three types) Product leadership Differentiate through superior design and engineering yielding higher performance demand higher price Customer intimacy Differentiate through superior matching of customer expectation with offer fulfillment demand higher price Disruptive innovation Think outside the box; imagineer ; create new paradigms, new standards demand higher price Source: Moore, Geoffrey A. Living on the Fault Line: Managing for Shareholder Value in Any Economy. Rev. ed. New York: HarperBusiness,

37 Schneider s Four Archetypal Cultures Collaboration Control Cultivation Competence Source: Schneider, William E. The Reengineering Alternative: A Plan for Making Your Current Culture Work. Burr Ridge, IL: Irwin Professional Pub.,

38 Which strategic value discipline aligns with a Competence culture? Collaboration Control Product Leadership Cultivation Competence 38

39 Which strategic value discipline aligns with a Collaboration culture? Collaboration Control Customer Intimacy Cultivation Competence 39

40 Which strategic value discipline aligns with a Control culture? Collaboration Control Operation cellence Cultivation Competence 40

41 Which strategic value discipline aligns with a Cultivation culture? Collaboration Control Disruptiv ovation Cultivation Competence 41

42 Recap: Does your strategy align with your culture? Collaboration Control Customer Intimacy Operation cellence Disruptiv ovation Product Leadership Cultivation Competence 42

43 Misaligned Strategy and Culture: HP-Compaq in 2001 Collaboration Control Operation cellence Disruptiv ovation Product Leadership Cultivation Competence 43

44 How do you organize to execute each strategic value discipline? 1 2 OUTPUTS: Products/services 3 4 A B C D INPUTS: Disciplines/skills/crafts 44

45 Hierarchy 1 2 Products/services 3 4 A B C D Group employees by disciplines/skills/crafts 45

46 Hierarchy structure aligns with Control culture Collaboration Control Cultivation Competence 46

47 Weak Matrix (emphasize functional excellence) 1 2 Products 3 4 A B C D Disciplines/skill Silos 47

48 Weak Matrix structure aligns with Competence culture Collaboration Control Cultivation of technical specialists Competence 48

49 Strong Matrix (emphasize project responsiveness) 1 2 Products 3 4 A B C D Disciplines/skill pools 49

50 Strong Matrix structure aligns with Collaboration culture Collaboration Control Cultivation Competence 50

51 Skunkworks or Tiger Team (free up and isolate a team of dedicated specialists) 1 2 OUTPUTS: Products/services 4 A B C D 3 INPUTS: Disciplines/skills/crafts 51

52 Tiger Team/Skunkworks structure aligns with Cultivation culture Collaboration Control Cultivation Competence 52

53 Align your Culture & your Structure with your key Strategic Value Discipline Strategic Value Discipline Disruptive Innovation Product Leadership Customer Intimacy Operational Excellence Aligned Culture Cultivation Competence Collaboration Control Aligned Structure Tiger team/ Skunk works Weak Matrix Strong Matrix Hierarchy 53

54 Executing Your Strategy in a Nutshell 1. Do the right projects! 2. Do the projects right! 3. Continually review and realign (1) and (2)! 54

55 Ideation Purpose Identity Questions Culture Long-range Intention Goal Nature and Structure Strategy Engagement Portfolio Synthesis Discussion Program Project Transition Operations Vision Metrics