The document discusses the importance of corporate culture and leadership in effective strategy execution. It outlines the key features of corporate culture, how to build a strong culture aligned with strategy, and how leadership can change an unhealthy culture. It also discusses how leadership can effectively monitor progress and drive continuous improvement in strategy execution.
The document discusses the importance of corporate culture and leadership in effective strategy execution. It outlines the key features of corporate culture, how to build a strong culture aligned with strategy, and how leadership can change an unhealthy culture. It also discusses how leadership can effectively monitor progress and drive continuous improvement in strategy execution.
The document discusses the importance of corporate culture and leadership in effective strategy execution. It outlines the key features of corporate culture, how to build a strong culture aligned with strategy, and how leadership can change an unhealthy culture. It also discusses how leadership can effectively monitor progress and drive continuous improvement in strategy execution.
The document discusses the importance of corporate culture and leadership in effective strategy execution. It outlines the key features of corporate culture, how to build a strong culture aligned with strategy, and how leadership can change an unhealthy culture. It also discusses how leadership can effectively monitor progress and drive continuous improvement in strategy execution.
Thompson, A A, M A Peteraf, J E Gamble, A J Strickland III & Thomas Joseph (2021), Crafting and Executing Strategy: The Quest for Competitive Advantage, 22nd ed (SIE), McGraw Hill, N Delhi. Chapter 12 Learning Objectives This chapter will help you understand: 1. The key features of a company’s corporate culture and the role of a company’s core values and ethical standards in building corporate culture 2. How and why a company’s culture can aid the drive for proficient strategy execution 3. The kinds of actions management can take to change a problem corporate culture 4. What constitutes effective managerial leadership in achieving superior strategy execution Instilling a Corporate Culture Conducive to Good Strategy Execution • Corporate culture: • Is the meshing of shared values, beliefs, business principles, and traditions that imbues a firm’s operating style, behavioral norms, ingrained attitudes, and work atmosphere. • Is important because it influences the firm’s actions and approaches to conducting business. Identifying the Key Features of a Company’s Corporate Culture FIGURE 12.1 The Two Culture-Building Roles of a Company’s Core Values and Ethical Standards Embedding Cultural Norms in the Organization and Perpetuating the Culture (1 of 2) • Screen applicants and hire those who will mesh well with the culture. • Incorporate discussions of the firm’s culture and its behavioral norms into orientation programs for new employees and training courses for managers and employees. • Have senior executives frequently reiterate the importance and role of the firm’s values and ethical principles at the firm’s events and in internal communications to employees. • Expect managers at all levels to be cultural role models and exhibit advocated cultural norms in their own behavior. Embedding Cultural Norms in the Organization and Perpetuating the Culture (2 of 2) • Make the display of cultural norms a factor in evaluating each person’s job performance, granting compensation increases, and offering promotions. • Stress that line managers all the way down to first-level supervisors give ongoing attention to explaining the desired cultural traits and behaviors in their areas and clarifying why they are important. • Encourage company personnel to exert strong peer pressure on co- workers to conform to expected cultural norms. • Hold periodic ceremonies to honor people who excel in displaying the company values and ethical principles. Forces that Cause a Firm’s Culture to Evolve Strong Versus Weak Cultures • Strong-culture firm • Weak-culture firm • Has deeply rooted widely-shared • Lacks values and principles that are values, behavioral norms, and consistently preached or widely operating approaches shared • Insists that its values and principles • Has few or no traditions, beliefs, be reflected in the decisions and values, common bonds, or actions taken by all company behavioral norms personnel Development of a Strong Culture • Closely aligning corporate culture with the requirements for proficient strategy execution merits the full attention of senior executives.
• Founder or • Commitment by strong leader • Strong the firm to with strong Culture ethical behavior values Why Corporate Cultures Matter to the Strategy Execution Process
• A culture that is well matched to the chosen strategy and the requirements of the strategy execution effort focuses the attention of employees on what is most important to this effort. • Culture-induced peer pressure further induces personnel to do things in a manner that aids the cause of good strategy execution. • A culture that is consistent with the requirements for good strategy execution can energize employees, deepen their commitment to execute the strategy flawlessly, and enhance worker productivity. Healthy Cultures That Aid Good Strategy Execution Unhealthy Cultures That Impede Good Strategy Execution Changing a Problem Culture: The Role of Leadership • A strong, out of sync, or unhealthy culture must be changed in order to execute strategy successfully. • Competent leadership at the top is necessary for culture-change efforts to succeed. FIGURE 12.2 Changing a Problem Culture Making a Compelling Case for Culture Change • Selling the change • Explain why and how certain behavioral norms and work practices are obstacles to good execution of strategic initiatives. • Explain how new behaviors and work practices will produce better results. • If the need for cultural change is due to a change in strategy, cite reasons why the current strategy has to be modified. Substantive Culture-Changing Actions • Replace key executives who are resisting or obstructing needed organizational and cultural changes. • Promote individuals who support cultural shifts and can serve as role models for the cultural behavior. • Appoint outsiders with the desired cultural attributes to high-profile positions. • Screen all candidates for positions carefully, hiring only those who appear to fit in with the new culture. • Mandate that all personnel attend culture-training. • Design compensation incentives that boost the pay of teams and individuals who support culture change. • Revise policies and procedures to drive cultural change. Symbolic Culture-Changing Actions
• Changing the Culture of an Organization
• Top executive • Ceremonial • Physical
and upper events to honor symbols that management exemplary represent the behaviors employees new culture How Long Does It Take to Change a Problem Culture?
• Changing a problem culture is never a short-term exercise.
• A sustained and persistent effort to reinforce the culture at every opportunity through word and deed is required. • It takes time for a new culture to emerge and prevail; it takes even longer for it to become deeply embedded. • Fixing a problem culture and instilling a new set of attitudes and behaviors can take 2 to 5 years. Leading the Strategy Execution Process
• Leading strategy execution requires:
• Staying on top of what is happening and closely monitoring progress • Putting constructive pressure on the organization to execute the strategy well and achieve operating excellence • Initiating corrective actions to improve strategy execution and achieve the targeted performance results Staying on Top of How Things Are Going • Management by Walking Around (MBWA): • Is used by leaders to stay informed about how well the strategy execution process is progressing. • Involves spending time with people at company facilities, asking questions, listening to their opinions and concerns, and gathering firsthand information about how well aspects of the strategy execution process are going. Mobilizing the Effort for Excellence in Strategy Execution
• Treat employees as valued partners.
• Foster an esprit de corps that energizes members. • Use empowerment to create a fully engaged workforce. • Set stretch objectives that require personnel to give their best in achieving performance targets. • Use benchmarking, reengineering, TQM, and Six Sigma tools to focus attention on continuous improvement. • Use motivational techniques and compensation incentives to inspire, nurture a results-oriented work climate, and enforce high standards. • Celebrate individual, group, and company successes. Leading the Process of Making Corrective Adjustments
• Making Corrective Actions Successfully Requires
• Good • Good business • A thorough implementation judgment in analysis of the of the deciding what situation corrective actions to take actions A Final Word on Leading the Process of Crafting and Executing Strategy • It is difficult to separate leading the process of executing strategy from leading the strategy process. • Crafting, implementing, and executing strategy is a continuous process that requires much adjusting and fine-tuning of the strategy to fit changing circumstances. • The tests of strategic leadership are whether the firm has a good strategy and business model, whether its strategy is competently executed, and whether the firm is achieving its performance targets. • If these three conditions exist, then the firm has good strategic leadership and is a well-managed enterprise. REVIEW
