Making Strategy Work: Leading Effective Execution and Change / Edition 2

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Without effective execution, no business strategy can succeed. This second edition delivers a powerful framework every leader can use to overcome the obstacles to successfully deploying business strategy. In this book, leading consultant and Wharton professor Lawrence Hrebiniak offers a comprehensive, disciplined process model for making strategy work in the real world. Drawing on his unsurpassed experience, Hrebiniak shows why execution is even more important than many senior executives realize, and sheds powerful new light on why businesses fail to deliver on even their most promising strategies. He offers a systematic roadmap for execution that encompasses every key success factor: organizational structure, coordination, information sharing, incentives, controls, change management, culture, and the role of power and influence in your business. With three new chapters, expanded coverage, and new examples, the Second Edition of this highly successful book is the definitive guide for turning strategy into action.

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Editorial Reviews

Library Journal
What better place to start a book on implementing new corporate strategy than with AT&T during its landmark breakup in 1984. Amid this grand upheaval, Wharton management professor Hrebiniak had an enlightening conversation with colleague Randy Tobias, then a division head at AT&T and later CEO of Eli Lilly. Tobias confided that his biggest leadership challenge was not in coming up with a new strategic direction for his division but in actually getting his plan up and running. The conversation stayed with Hrebiniak, ultimately inspiring this book, which offers a detailed analysis of how organizational structure, institutional culture, coordination, and communication methods affect a company's ability to act on its strategic initiatives. Since change management lies at the heart of strategy implementation, Hrebiniak details its role in successfully transforming an organization. But he also gives airtime to the role of incentives in motivating behavior and of controls in providing feedback to keep the plan on track while highlighting how executive attitudes toward strategy implementation can get in the way of successful execution. The text is liberally peppered with diagrams, step-by-step processes, and real-world scenarios. Recommended for academic business collections.-Carol J. Elsen, Univ. of Wisconsin, Whitewater Copyright 2005 Reed Business Information.
Soundview Executive Book Summaries
Formulating strategy is difficult. Executing it throughout the organization — that's even harder. Without effective execution, no business strategy can succeed. Unfortunately, most managers know far more about developing strategy than they know about executing it — and overcoming the difficult political and organizational obstacles that stand in the way. In Making Strategy Work, Lawrence Hrebiniak offers a comprehensive, disciplined process model for making strategy work in the real world. He shows why execution is even more important than many senior executives realize, and sheds new light on why businesses fail to deliver on even their most promising strategies. He also offers a systematic road map for execution that encompasses every key success factor: organizational structure, coordination, information sharing, incentives, controls, change management, culture, and the role of power and influence in the execution process.

Strategy Execution Is the Key
Execution is a disciplined process or logical set of connected activities that enables an organization to make its strategy work. Without a careful, planned approach to execution, strategic goals cannot be attained.

Execution can itself be a source of competitive advantage. If there's a series of internally consistent, integrated activities, imitation is extremely difficult if not impossible.

Consider how Southwest Airlines executes its lowest-cost strategy: no baggage transfer, meal service or boarding pass; only one type of airplane; and incentives for fast turnarounds at the gate. It's not impossible to copy Southwest, but it's extremely difficult for competitors already committed to different routines and methods.

Why Execution Is Often Handled Poorly
Despite its importance, execution is often handled poorly because of the following reasons:

  • Managers are trained to plan, not execute. Execution is learned in the "school of hard knocks," with many mistakes and frustrations on the way to successful results.
  • Some top managers believe that implementation is best left to lower-level employees, who then get the blame if things go awry. But execution is not trivial: It defines the essence of managerial work. It demands ownership at all levels of management.

Planning and execution are highly interdependent. The greater the interaction between "doers" and "planners" — or the greater the overlap of the two processes or tasks — the greater the likelihood of successful execution. Planning and doing should be simultaneous: Managers must be thinking about execution as they're formulating their plans.

  • Execution usually takes longer than formulating strategy. As conditions change over time, it can be hard for managers to focus on and control the execution process. The longer execution takes, the more likely that unforeseen circumstances will derail it.
  • Strategy implementation always involves more people than strategy formulation. Communication down the organization or across different functions becomes a challenge. The more people who are involved, the harder it is to execute strategy effectively.

Making Strategy Work
Successful execution involves decisions about strategy, structure, coordination, information sharing, incentives and controls. These decisions take place within an organizational context of power, culture, leadership and the ability to manage change. To understand how to make strategy work, we need to understand the interactions among these key decisions and contextual forces. Copyright © 2005 Soundview Executive Book Summaries
—Soundview Summary

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Product Details

  • ISBN-13: 9780133092578
  • Publisher: Pearson FT Press
  • Publication date: 7/14/2013
  • Edition number: 2
  • Pages: 528
  • Sales rank: 712,470
  • Product dimensions: 6.20 (w) x 9.10 (h) x 1.10 (d)

Meet the Author

Lawrence G. Hrebiniak, Ph.D., has emeritus status at the University of Pennsylvania. Professor Hrebiniak was a member of the faculty of the Department of Management of The Wharton School for 36 years, where he taught courses in strategic management in the Wharton M.B.A. and Executive Education Programs. He still is very active in the Wharton Executive Education arena, teaching and working with managers in the area of strategy implementation or execution.

Dr. Hrebiniak held managerial positions in the automobile industry prior to entering academia, which provided him with valuable real-world experience. He is a past President of the Organization Theory Division of the Academy of Management. For more than two years he was one of a handful of Wharton faculty members providing commentaries on the Wharton Management Report, a TV program on the Financial News Network.

Professor Hrebiniak’s most notable research of late has been in the area of strategy execution. He has consulted with or participated in executive development work with scores of companies, profit and not-for-profit alike, both inside and outside the U.S. He facilitated many of Jack Welch’s legendary “Work-Outs.” Based on his research and experience with strategy implementation, he developed integrated processes that help make strategy work in different organizations, across different industry settings. He is still active as a researcher and consultant.

Dr. Hrebiniak has authored seven books and numerous professional articles. This book, the second edition of the bestselling Making Strategy Work , reflects his experience as a manager, consultant, and educator in creating a culture of execution and facilitator of the execution process in complex organizations.

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Read an Excerpt


This book focuses on a critical management issue: Making strategy work or executing strategy effectively.

Theories and advice about the requisites of good planning and strategy formulation abound in management literature. A vast array of planning models and techniques has been paraded before managers over the years, and managers for the most part understand them and know how to use them effectively.

The problem with poor performance typically is not with planning, but with doing. That is, strategies often aren't implemented successfully. Making strategy work is more difficult than strategy making. Sound plans flounder or die because of a lack of execution know-how. This book focuses on execution—the processes, decisions, and actions needed to make strategy work.

What differentiates this book from others, beyond its emphasis on a critical management need? I'm excited about the present approach to execution for the six following reasons.Learning from Experience

This book is based on data. It borrows from the experiences of hundreds of managers actually involved in strategy execution. There are multiple sources of data, which ensures complete coverage of execution-related issues. This book doesn't rely on the armchair musings of a few people relating unconnected anecdotes; it is based on real-world execution experiences, problems, and solutions—including mine over the last two decades.What You Need to Lead

The focus of the book is on the knowledge, skills, and capabilities managers need to lead execution efforts. Its content is action- and results-oriented.

Most organizations recruit, train, andretain good managers; they are staffed by good people—even great people. Most managers are motivated and qualified people who want to perform well.

Even good people, however, can be hampered by poor incentives, controls, organizational structures, and company policies or operating procedures that inhibit their ability to execute and get things done. Even great leaders, in top management positions, will fail if they're not well versed in the conditions that affect execution success. Managers need to understand what makes strategy work. Intuition and personality simply aren't sufficient, given such a complex task. This book focuses on this knowledge and the capabilities and insights leaders need for execution success.The Big Picture

In this book, I develop a unifying, integrated approach to execution. I focus on the big picture, as well as the nitty-gritty of the execution process and methods. I spell out a logical approach to execution and the relationships among key execution decisions.

This book not only identifies these key factors and their relationships, but also goes into detail on each of the factors needed for execution success. It provides an important, integrated approach to execution and dissects the approach to focus on its key elements, actions, or decisions. This book then provides both an overview of the execution process and an in-depth reference manual for key aspects of this process.Effective Change Management

Leading successful execution efforts usually demands the effective management of change, and this book integrates important change-management issues into its treatment of execution.

This book discusses power, influence, and resistance to change. It focuses on real and practical change-related issues—such as whether to implement execution related changes quickly, all at once, or in a more deliberate and sequential fashion over time. I tell you why "speed kills" and explain how large, complex changes can severely hurt execution outcomes. I focus on the details of cultural change and the organizational power structure, and how they can be used to make strategy work.Applying What You Learn

This book practices what it preaches. The final chapter shows how to apply the logic, insights, and practical advice of preceding chapters to a real, huge, and pervasive problem: Making mergers and acquisitions (M&A) work.

M&A strategies often flounder or fail; my last chapter explains why this is the case and how to increase the success of M&A efforts by applying the book's approach to execution. I also highlight the utility of the book's advice and guidelines when trying to make M&A efforts successful. I feel it is only fitting and proper to end an execution book on a positive and useful note—by showing how practical execution can be in confronting an important and pervasive real-world issue and how it can save management a lot of time, effort, and money.The Bottom Line

Sixth and finally, the reasons above—taken together—distinguish this book significantly from other recent works, such as Bossidy and Charan's Execution (Crown Business, 2002). This book covers more of the important factors and decisions related to successful execution. It offers an empirically-based, integrative, complete approach to making strategy work and focuses more extensively on managing change than other publications dealing with implementation.

The bottom line is that my book greatly adds to and follows logically Bossidy and Charan's Execution. It is an important and necessary addition to the toolkit of managers looking to execute strategy and change effectively.On a Final Note

Leading execution and change to make strategy work is a difficult and formidable task. For the six reasons I have listed, I believe this task can be made more logical, manageable, and successful by the present book's approach and insights.A Few Thanks

An undertaking such as the present one is challenging and difficult because of its complexity. I alone assume responsibility for the book's content, its interpretation of data and facts, and its conclusions. Still, while the ultimate responsibility is mine, there are a number of people who helped me in my task, and I would like to recognize them for their contributions. Brian Smith of the Gartner Research Group helped immensely with the creation of the online research survey, and contributed important technical support. Cecilia Atoo of Wharton was a real stalwart as she typed the manuscript, created figures and tables, and otherwise helped meet my demands and those of the copyeditors. Many thanks are due to my editor, Tim Moore, as well as Russ Hall, Christy Hackerd, and others at Pearson Prentice Hall who helped me develop the manuscript into its present form. The anonymous reviewers who provided valuable feedback and suggestions for improving the manuscript also deserve recognition for their efforts. Finally, special thanks are due to my son, Justin, and my muse, Laura, whose encouragement, friendship, and support were constant sources of motivation to me.

© Copyright Pearson Education. All rights reserved.

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Table of Contents

Introduction to the Second Edition xxiii
Acknowledgments xxv
Introduction to the First Edition xxvii
Learning from Experience xxviii
What You Need to Lead xxviii
The Big Picture xxviii
Effective Change Management xxix
Applying What You Learn xxix
The Bottom Line xxx
On a Final Note xxx
A Few Thanks xxx

Chapter 1 Strategy Execution Is the Key 3
Execution Is a Key to Success 5
Making Strategy Work Is More Difficult Than the Task of Strategy Making 6
A Focus on Making Strategy Work Pays Major Dividends 8
Managers Are Trained to Plan, Not Execute 9
Let the “Grunts” Handle Execution 10
Planning and Execution Are Interdependent 11
Execution Takes Longer Than Formulation 14
Execution Is a Process, Not an Action or Step 17
Execution Involves More People Than Strategy Formulation 18
Additional Challenges and Obstacles to Successful Execution 19
Wharton-Gartner Survey and Executive Education Data Collection . . . .20
The Results: Obstacles to Successful Strategy Execution 22
Execution Outcomes 26
The Execution Challenge 28
Having a Model or Guidelines for Execution 29
Strategy Is the Primary Driver 29
Choosing an Organizational Structure 29
Coordination and Information Sharing 30
Clear Responsibility and Accountability 30
The Power Structure 30
Incentives, Controls, Feedback, and Adaptation 31
The Right Culture 31
Leadership 31
Managing Change 32
Applications and Special Topics 33
The Next Step: Developing a Logical Approach to Execution Decisions and Actions 33
Summary 35
Endnotes 36
Chapter 2 Overview and Model: Making Strategy Work 37
Common Versus Unique Execution Solutions 38
A Need for Action 40
A Model of Strategy Execution 41
Corporate Strategy 43
Corporate Strategy and Structure 45
Need for Integration 50
Executing Business Strategy 53
“Demands” of Business Strategy 55
Integrating Strategy and Short-Term Operating Objectives 56
Incentives and Controls 61
Incentives 63
Controls 64
Another View of the Model of Strategy Execution 65
Context of Execution Decisions 67
The Execution Context 68
Managing Change 69
Culture 69
The Organizational Power Structure 70
The Leadership Climate 71
Need for a Disciplined Approach 72
Summary 73
Endnotes 74
Chapter 3 The Path to Successful Execution: Good Strategy Comes First 77
Is the Impact of Strategy Overrated? 78
Issue #1: The Need for Sound Planning and a Clear, Focused Strategy 80
Corporate-Level Planning 81
Corporate Strategy: Some Corporate Examples, Good and Bad 82
Business Strategy 86
The Service Business 93
Issue #2: The Importance of Integrating Corporate and Business Strategies 95
The Role of the Business Is Unclear 97
Inappropriate Performance Metrics 98
Battles Over Resource Allocations 99
Assessments of Business Performance Create Additional Problems 99
The Strategy Review 100
Issue #3: Thinking Short Term—The Need to Define and Communicate the Operational Components of Strategy 103
Integrating Strategic and Short-Term Objectives 105
Need for Measurable Objectives 106
Issue #4: Understanding the “Demands” of Strategy and Successful Execution 108
Low-Cost Producer 109
Differentiation Strategies 111
Developing the Right Capabilities 112
The Demands of Global Strategy 115
A Final Point 116
Summary 117
Endnotes 118
Chapter 4 Organizational Structure and Execution 119
The Challenge of Structural Choice 120
Johnson & Johnson 120
Citibank, ABB, and Other Large Global Players 122
Service Organizations and Nonprofits 123
The Critical Structural Issues 124
Structural Issue #1: Measuring Costs and Benefits of Structure 126
Structural Issue #2: Centralization Versus Decentralization 131
Structural Issue #3: The Strategy-Structure Relationship and Effective Execution 144
Summary 157
Endnotes 160
Chapter 5 Managing Integration: Effective Coordination and Information Sharing 163
The Importance of Integration 165
Boeing 165
Hewlett-Packard 165
General Motors 166
Royal Dutch/Shell Group 167
Law Firms and Integration 168
Interdependence and Coordination Methods 169
Types of Interdependence 169
Coordination Processes and Methods 174
The GE “Work Out” 178
Facilitating Information Sharing, Knowledge Transfer, and Communication 181
Creating, Using, and Sharing Knowledge 181
Methods, Tools, or Processes for Information Sharing 184
Informal Forces and Information Sharing 187
Additional Informal Factors Affecting Information Flow and Knowledge Transfer 190
Clarifying Responsibility and Accountability 197
Responsibility Plotting and Role Negotiation 198
Summary 202
Endnotes 204
Chapter 6 Incentives and Controls: Supporting and Reinforcing Execution 207
Role of Incentives and Controls 208
Incentives and Execution 209
A Basic Rule: Don’t Demotivate People 209
Good Incentives 210
Reward the Right Things 214
Controls: Feedback, Learning, and Adaptation 216
The Control Process 216
Develop and Use Good Objectives 221
Controls Require Timely and Valid Information 222
Use and Act on the Information 223
Face the Brutal Facts Honestly 225
Reward the Doers, the Performers 226
Reward Cooperation 227
Clarify Responsibility and Accountability 228
Leadership, Controls, and Execution 229
The Strategy Review: Integrating Planning, Execution, and Control 232
Step 1: Strategy Formulation 234
Step 2: The Execution Plan 238
Step 3: Initiating the Control Process 239
Step 4: Cause-Effect Analysis and Organizational Learning 240
Step 5: Feedback and Change 241
Step 6: Follow Up and Continue the Process 242
Summary 243
Endnotes 245
Chapter 7 Managing Change 247
Managing Change: A Continuing Challenge 247
Steps in Managing Change 251
A Model of Change and Execution 253
Components of the Model 253
Relating Change to Execution Problems 255
Sequential Change 260
Complex Change 266
Other Factors Affecting Change 278
Summary 278
Endnotes 280
Chapter 8 Managing Culture and Culture Change 283
What Is Culture? 284
Culture Is Important for Execution 285
Culture Is Not Homogeneous 286
Culture Affects Performance 286
Organizational Performance Affects Culture 289
A Model of Culture and Cultural Change 291
The Top Line: The Effects of Culture 291
The Bottom Line: Changing Culture 295
Summary 309
Rule 1: The Reasons for Change Must Be Clear, Compelling, and Agreed Upon by Key Players 309
Rule 2: Focus on Changing Behavior—Not Directly on Changing Culture 310
Rule 3: Effective Communication Is Vital to Culture Change 310
Rule 4: Adequate Effort Must Be Expanded to Reduce Resistance to Change 310
Rule 5: Beware of Excessive Speed 310
Endnotes 311
Chapter 9 Power, Influence, and Execution 313
A View of Power and Influence 315
Strategy and Environment 316
Problems or Dependencies 317
Organizational Structure 318
Uneven Resource Allocations 319
Internal Dependencies and Power 320
Using Power and Influence 322
Coming Full Circle: Conclusions About Power 325
Power and Execution 325
Define Power Bases and Relationships 326
Form Coalitions or Develop Joint Ventures with Those in Power 328
Focus on Value-Added, Measurable Results 329
A Final Note on Power: The Downside 336
Summary 343
Endnotes 344

Chapter 10 Making Mergers and Acquisitions Work 349
Making Merger and Acquisition Strategies Work 350
Why Focus on Mergers and Acquisitions? 350
Why Do So Many Mergers and Acquisitions Fail or Founder? 355
Using the Present Model and Approach to Execution 360
Corporate Strategy 360
Corporate Structure 363
Cultural Integration in M&A 367
Business Strategy and Short-Term Objectives 373
Business Structure/Integration 377
Project Management 378
Incentives and Controls 379
Managing Change 383
Managing Culture and Culture Change 387
The Critical Role of Leadership 391
Summary 392
Endnotes 394
Chapter 11 Making Global Strategy Work 397
Types of Global Growth and Execution Decisions 399
Early or Basic International Presence 399
The Multidomestic Global Organization 400
The Coordinated Global Strategy 405
Strategic Alliances 410
Summary 414
Endnotes 415
Chapter 12 Executing Strategy in Service Organizations 417
Similarities: Executing Strategy in Service Businesses 419
Strategy 419
Organizational Structure 422
Talent, Capabilities, and Need for Training/Skill Development Programs 424
Incentives and Controls 426
The Logical Conclusion? 427
Service Businesses: Possible Differences Affecting Strategy Execution 428
Production and Consumption of Services 428
Are Services Personal? 429
The Measurement Issue 430
Categories or Types of Service Organizations 432
Definition of Goals and Strategies 434
Professional Versus Administrative Controls 436
Knowledge and Power 438
Conclusion: A Difficult Setting for Strategy Execution 439
Strategy Execution in People-Based Professional Service Organizations 440
The Setting for Action: A Case of Reciprocal Interdependence 440
Deciding on Strategy and Goals 442
Defining Measurement Metrics and Cause-Effect Clarity 444
Structure and Coordination Processes 446
Effective Incentives 448
The Verdict: Execution in People-Based, Professional Service Organizations 449
Summary: Strategy Execution in Service Organizations 451
Endnotes 454
Chapter 13 Project Management and Strategy Execution 457
Possible Benefits of a Project Management Approach 458
An Example: Project Management and Making Strategy Work 460
Defining the Projects and Key Objectives 461
Potential Pitfalls with Project Management 466
Degree of Formality 466
Tension Between Routine and Autonomy 468
Managing Culture and Change 469
Evidence of Value Added 469
Summary 471
Endnotes 472
Appendix 473
Index 479

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