Strategy Execution: How to make a million-dollar business with a breakthrough target.

Field report for executives who want to make a real difference.

Breakthrough objectives are the means of choice in order to clearly improve the company’s situation over the financial year.
An example: The COO of a Hidden Champion of the automotive supply industry laments the considerable pressure exerted by its investors at him. The EBIT does not fit any more, somewhere he has to raise potential – he needs to do it fast and consistently.
All global heads of the Legal Entities will be invited to the German holding – representatives are not allowed.  With the invitation, a strategy paper (a DIN A3 page) is sent out in which the urgency of the situation is made very clear by the COO. In a videoconference, he describes his observation of the operative business, his conclusions, the purpose of the upcoming meeting and, last but not least, the breakthrough target for the coming financial year.

Reduction of scarp rate worldwide by 20%.

… within one year; in an industry that deals with sensitive material. And here it comes:

The result is to be reached after eight months.

The remaining months will serve to strengthen the performance.

All other objectives on the scorecard should keep their status. Only the given quality goal should be focussed:

It is about realizing savings to the amount of 1.000k €.

This impulse has persuaded all the heads of the countries to travel and to attend the meeting. Some think:

“It must be a bad sign when such a high goal is announced.”, or: “If I can’t accomplish this goal, it will be bad news for my bonus.”

In a two-day workshop, the executives were invited to derive own sub-strategies from the overall breakthrough target. They arrive at more than two dozen approaches, which are to be implemented in an appropriate manner in the different factories.

Lean initiatives are experiencing a renaissance

This global executive team is currently rolling out Lean Manufacturing projects. These have so far been considered more or less as a self-purpose, with little success expectation and thus also low paid attention. Now it is different. The Lean quality tools now are seen as strategic drivers – Lean (an agile methodology in the end) is now linked to the company’s core strategy and contributes to its success.

In addition, a review process is agreed, the heart of the new form of strategy implementation.  Monthly, not mid-year, the COO personally goes through the progress together with each executive. Mind Set:

Identify deviations quickly, provide support and, if necessary, provide coaching, remove barriers.

Results:

The pit stop after eight months shows an amazing result.
One out of seven legal entities has outperformed the target by seven percent.

The scrap costs fell by a total of 27%.

All other Legal Entities are still far away from this target. It is a realistic picture in a strategic project like this.
How to deal with this?  All the other executives will be invited to the most successful site to learn first-hand from their leader on how he managed to get these results.

In the coming months, this benchmarking and practical training will lead to another factory reaching the target line in the same fiscal year. Four legal entities are improving, one falls back.

What is the profit of the project?

Was it a mistake to create such a tough breakthrough target?
I don’t think so. The entire process has reached its goal to an amount of almost 75% in twelve months. Would it also have been achieved with a standard approach? Would a learning process have taken place, a cultural change – here described between the lines? Not likely.

The most important result to me – apart from the improvement of the EBIT – was that this Hidden Champion decided to do exactly the same in the following year.

Their next leap is to reduce inventories by 27%.

The quality goal from the past year has to be maintained despite all of this and still needs to be achieved by some plants.

The breakthrough target process is still applied today, after five years, although major parts of the management have changed, as it is so often the case.

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Strategy Execution

EXCELLENCE IN STRATEGY EXECUTION

The Strategy Execution process is your highway to performance.

"IF UNIMPLEMENTED CORPORATE STRATEGIES WERE PENNIES, WE'D ALL BE RICH."
Richard A. Moran, Venture Capitalist

 

STRATEGY EXECUTION

Strategies have to be successfully executed both internally and externally. This is where my work begins. My aim is to implement your strategy fast, consistently and successfully. Your leaders will set up and steer the process from the first minute on. It will be their process.

Expect me and your management team to deliver:

  • A clear and systematic approach to execution,
  • Mobilization of leaders and
  • An enhanced collaborative culture.
Project example #1:
The COO of an international manufacturer in the glass refining industry is forced by his investors to raise the company’s EBIT. We design a strategy implementation process for all levels of management in every legal entity. Objective: realize 1.000k € savings in the current FY by reducing the scrap rate (-25%). (Automotive).
Project example #2:
Unplanned machine stops lead to low performance in a packaging area. Engineering expertise must be brought directly to the shop floor; reorganization of work structures is necessary. We consult the steering committee and run change management workshops for managers and employees. (Pharmaceuticals).
1 -  EXECUTION SYSTEMS

Bigger units need a systems approach to handle strategic change. You will have one in place already. I have one, too. Let‘s combine the best of both approaches. In execution processes there are only two levers to tackle, anyway: 1. Change the WHAT – e.g. amount of strategies, conflicting strategies; or 2. Change the HOW of the implementation process. (see Executive Study on Strategy Execution 2016). In the end there will be an execution process in place where nothing can be left out or added without impairing it.

Project example #3:
Design and implementation of a policy deployment system for strategy implementation for a medtech manufacturer. Focus: joint planning, cascading and continuous review of the strategic action plans at all management levels (Medical Technology).
Project example #4:
“Take a risk.”, is the headline  for developing and implementing a strategy execution process in a highly customer focused marketing unit. Counselling and consulting on international management level with a clear message. (Pharmaceuticals).
2 - LEADERSHIP

“Strategic success comes with 1% vision and 99% leadership.“ Ram Charan

Your aim is to be faster than competition? Then Leadership is key to success. Leaders and key persons will need to raise their personal and psychological energy to execute any given strategic change. Tactics have to be translated into employee behavior. International footprints with their heads have to be convinced and integrated. Stakeholder relationships need to be fostered whilst interpersonal conflicts occur and the overall tension increases.

My message is: keep your leaders healthy and effective in:

  • Self Management
  • Stakeholder Management and Relationship Building
  • Applying Leadership behaviors and tools that drive strategic change.

Project example #5:
We design and deliver a “Lean Leadership” training module as part of the worldwide “Lean Learning Academy” of a leading wind turbine manufacturer at operations unit manager level. Focus: develop a leadership mind set in order to run a challenging lean conversion (Renewables).
Project example #6:
We design a change process addressing a given leadership culture. Objective: foster collaboration amongst the key players. Development of a common understanding and common language of leadership through workshops, training and coaching sessions (Service sector)
3 - CULTURE

We all know that strategies tend to get eaten by company culture for breakfast (P. Drucker). I have a simple approach to changing or adjusting the hungry beast called corporate culture. I follow Edgar Schein’s approach:

‘If it [the strategic project, AL] is successful, and people like it, and it becomes a norm, then you can say it has become a culture change.’

What you shouldn’t try instead is to change culture without any reasonable strategic intent.

Project example #7:
Change process for a given “ego” culture: Top Executive expects a business unit  to assure real collaboration across the “silos”. Otherwise investments would not be made. We support the top management, line leaders and employees in the development of “golden rules” for collaboration (Energy sector).
Project example #8:
Heavy emotions pop up during a strategic restructuring project. We deliver a cultural analysis: focus on leadership, communication, work satisfaction, reward and recognition. Consultancy provided to all departmental leaders.  We provide continuous process consulting to foster follow-up activities (Automotive).
4 - INDIVIDUAL MEASURES

Sometimes you might just need workshop facilitation or consulting for the next process step. Based on your requirements and goals I deliver Supervision, Leadership Development Programs, Seminars, Unit/Team Development, Workshop Facilitation, Keynotes, Lectures and Train the Trainer. Twenty years of experience in industry are included.

Project example #9:
Kick Off facilitation and teambuilding workshops for numerous teams in a restructuring process. Focus on objective development and collaboration incl. values, roles & responsibilities (Pharmaceuticals).
Project example #10:
Design and international implementation of a qualification module for key personnel (product specialists) to assure smooth new product launches. Focus: team leading and train-the-trainer skills (Automotive).