mapping. A promise-based
designer Interviews managers and
workers from each department,
identifies the hidden recurrent
promises and creates a map that
shows how they add up.Frequently
the actual promise fulfilled by the
company turns out to be a degraded
version of the one the strategy
requires. The promise map shows
precisely where to go to work to fix
the behavior. We recommend that
each division of a company carry out
such an alignment check quarterly.
Companies that are highly
opportunistic will check promise
alignment more frequently. We
recommend weekly.
After all, no one plans for a failure.
Why do you see so many companies'
strategies failing? Why
don't good strategies result in good
results? Drawing from your rich
experience and research inputs,
what's your advice to companies in
making their strategies successful?
We have gone over a number of
reasons why strategies fail. I will
summarize them.
We have gone over a number of
reasons why strategies fail. I will
summarize them.
First, strategies fail in the formation
stage because the formulators do not
force themselves through a change
in the way they see the customers,
competitors, suppliers, market
structures, and the rest. A new
strategy that lives in the common
sense of the old is merely a costly
adjustment. Even if the adjustment
is an improvement, the cost of
implementing it will very likely
discount most of the increased
value. New strategies require new
ways of seeing the business. The
strategist's chief job will be to
transform herself to see the business
anew and then to help others to see
the business in the new way. When
CEMEX changed its ready-mix
concrete strategy by promising that
the cement would be delivered
within 20 minutes of the expected
time or the money refunded, the
difficult transformation in vision
was to see building contractors as
facing ongoing emergencies and to
see themselves as emergency
workers. Only with that shift in
mind-set could the engineers make
sense of the changes they needed to
make. Likewise, Voith Siemens
Hydro's engineers could only come
to compete with Indian and Chinese
cost structures once they came to see
themselves as project managers
instead of scientists. Brilliant
strategies only occur when the
strategist notices something unusual
but recurrent and redefines his
business and himself. That takes
courage as well as intelligence.
Second, strategies fail because they
are implemented as new recipes or
templates. Any genuine strategic
change changes the relations of the
people in the business, changes
their promises to each other, and
changes the culture. Executing the
strategy without coaching people
through the change in relationship
requires enormous goodwill,
informal coaching, and luck.
Third, executing a strategy is a
matter of testing and refining not
rolling out one whole plan or
template across the whole of a
business. Promise-based change
leaders work with one cluster of
promises as a time, make changes in
the promise design to get promises
fulfilled, and then take the changes
back to the original strategy. As
mentioned earlier, one strategy
called for a mix of products in a
channel, which was marketed as
perfect for the mix. Only one
product worked. The change leader
modified the strategy and moved
forward by marketing the one
product and then others very like it.
Fourth, strategies can fail for reasons directly related to Chief Executive.
For instance, the Chief Executive
does not take responsibility for the
culture or take part in the signature
practice. Or the Chief Executive and
the change leader do not manage the
alignment of promises over the span
of the strategy execution. Last, Chief
Executive can fail to model making
strong requests and insisting on
meaty promises. Though this kind
of failure is seems trivial and of the
bizarre sort where you say, "For
want of a horse shoe, the kingdom
was lost." But this failure is as
common as rain.
Fifth, strategy formation and
execution is part of a competition.
Strategies always face off against
other strategies. Even in the simple
case of chess, one strategy will fail
either because of poor formation or
poor execution. That is why the best
strategy overthrows common sense
and why the best strategy execution
transforms people and relationships
inside the organization.
