Business Case Studies, Executive Interviews, Charles Spinosa on Strategy Execution

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Executive Interviews: Interview with Charles Spinosa on Strategy Execution
September 2008 - By Dr. Nagendra V Chowdary


Charles Spinosa
Charles Spinosa,
Group Director Vision Consulting.


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  • There are two divergent lines of thinking in strategy making: one represented by Henry Mintzberg arguing that strategy is an emergent process; and others argue that its an intended and a deliberate process. What according to you is the right way of understanding strategy? Is there any evidence to support this line of thinking?
    In my experience with clients, the practical distance between the position of, say, a Michael Porter and that of Henry Mintzberg is diminishing.The philosophical difference remains great over whether our best understanding of markets, customers, competitors, suppliers, and so forth comes

    from a distanced, objective view of the whole or from a craftsmanly engagement with the purposes of our company and its markets.This difference will remain until we identify the final good of human beings and of commerce or give up the distinction between science and the humanities. As a philosophical matter, I side with Mintzberg and the engaged, craftsmanly approach.

    While philosophy offers important insights, I will not dwell on them here. Managers can arrive at many of the same insights by paying attention to the strategic activities of companies that do well in emerging economies. Consider such companies as CEMEX and Haier in emerging markets, as Deutsche Bank in financial services, and as Voith Siemens Hydro (facing product competition from GE and price competition from new competitors in India and China). Strategists at these companies focus on handling the unexpected better than their competitors. With technological change, globalization, longer lives, new business models, and new social values arising, the important moments of the future are very likely ones we do 'not' expect.

    Strategy in these companies involves reconnaissance of all kinds to get the best understanding of the shape of the unexpected, building an infrastructure that is agile in all respects (finances, technologies, human resources, production capabilities, geography), experimentation, and when an experiment succeeds beyond expectation, scaling up fast to exploit the opportunity. In short, these companies have taken Mintzberg's craftsmanly sensitivity to opportunities and turned it into a Porter-like scientific strategy. Strategists at these companies draw on traditional analytics to note statistical changes in customers, suppliers, competitors, and so forth. But they also conduct distinctive forms of qualitative research where they look for unusual things that are happening with their customer- and supplier-facing teams and with customers and suppliers themselves. For instance, a typical strategic question in such a company is, "What is the most unusual thing that you found yourself doing this year?" The goal is to find anomalies that are harbingers of the future.

    Building agile platforms is another cross between analytical and emergent strategy. Companies now bring the same intensity to building agility that they brought to create scale or scope technologies. But agility in technology, staffing and manufacturing (though outsourcing), finance (through hedging), management structures (through promise-based management), and so forth enables companies to go after emerging opportunities and compete by changing competitive advantages. Experimentation looks for objective truth about the business reality as much as the boil-the-ocean approach of more traditional strategy, but the new strategists try out ideas and collect results much like the sensitive craftsman.

    Don Sull, my co-author of "Promisebased Management," has been relentless in documenting the opportunistic strategy in dynamic markets. I recommend his Made in China, "Strategy as Active Waiting," HBR (September 2005), and The Logic of Opportunity (forthcoming 2009).

  • Strategy execution has always been one of the more difficult problems in business. Creating a brilliant strategy is nothing compared to executing it successfully. It has always been much easier to create a strategy document than to get employees to abide by it. Many employees don't even know the details of strategies. Plans by senior management are neither attended to nor executed. Performance expectations aren't met. How do you think the companies should get everyone rallying around the grand vision/strategy?
    I do not want to diminish the difficulty of creating a brilliant strategy. It calls for resources of character, passion, sensitivity to the resources of the company and to anomalies in the company and industry, broad and deep industry experience, analytical intelligence, and leadership. It is rare to bring all these traits together. Lorenzo Zambrano of CEMEX and Anita Roddick of the Body Shop are two leaders whose brilliant strategies demonstrate all the characteristics I have just described in addition to the ability to transform themselves in the process of developing the strategy. At the very least, genuine strategy making even the opportunistic strategy making I have just described requires numerous cases of passionately believing something about the nature of the industry or your company or your customers and then pushing yourself to discover that you are profoundly wrong. That is the experience that undergirds a brilliant strategy. Strategies are not brilliant because they are conceptually hard to develop. They are brilliant because they overturn the common sense of both the industry and of the formulators themselves.

    That said, strategy execution fails approximately two-thirds of the time and fails because it focuses on the implementation of new practices, new processes, new value propositions, new reporting and measuring, new profiles to recruit, and finally new incentives. In short, it is commonly thought that a new strategy requires a change in the recipe or template a company follows. Most who implement strategies actually know that companies are not just big rule following processes. They know that they are social organisms, but they leave it to the communications program to manage the social part of change.

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