Translator: Zhou Su Reviewer: Igor Pureta
Work with me, for just a moment.
Imagine the situation.
Everyone in the organization has been called together.
There's an anticipation that's going around the room,
as everyone gathers in the town-hall meeting.
The CEO walks onto the stage
and he looks out to the audience and says,
"Ladies and gentlemen, I've invited you here today
for the launch of our new strategy.
It is a strategy that will be good for each and every one of us.
It will be good for our shareholders, and good for our customers.
But I alone can't make it happen.
I need each and every one of you to come together,
not just as a department, not just as a team, but as a family
because only as a family can we make our strategy come alive."
And he turns to the audience and says,
"Are you with me?"
And everyone shouting back, yeah!
and cheering and pumping.
Two guys sitting at the back of the room turn to each other and go,
"What was all that about?"
"I don't know,
but there's a free lunch outside, let's go and get something to eat."
On any given day, somewhere in the world,
there's a CEO launching the new strategy with all the fanfare and excitement,
but after all is said and done,
what percentage of strategies are successfully executed?
More implementations are failing than succeeding.
And the challenge we have today is to explore why two-thirds are failing.
And the challenge is that leaders have been taught how to plan,
but not how to implement.
And our focus now is to give them the skills
so that they can craft and implement those strategies.
But there is some good news.
We are getting better.
When I first started researching this area back in early 2000,
I published in 2002 that 90% of implementations were failing.
Today, it's 67 percent.
So we have got better over time.
But yet still after all the excitement, after all the fanfare,
after all the preparation, research and studying,
we're failing two thirds of the time at what we're doing.
So to work with leaders, we have to shake up their thinking.
Because if we keep failing at something, we've got to do it differently.
And my challenge is for leaders to think differently
and act differently in the field of strategy implementation.
And one of the biggest challenges I see
is that they underestimate the whole challenge ahead of them.
They think, "I crafted the strategy, the rest is easy."
No, implementation is just if not tougher.
And around the world,
we need to put the spotlight firmly on the implementation.
And the question I ask in leaders around the world is
I give them a choice, would they prefer to have:
A, a good strategy, but it's implemented badly,
or B, a bad strategy, but it's implemented well.
And I get them to debate which they prefer.
Eighty percent of leaders typically say A.
But the correct answer is B.
Now why do they say A?
Because they say if I have a good strategy
I have the foundation, I have the direction.
And if it's not working along the way, we can fix it.
But the problem is along the way, we get distracted,
we get caught up with day-to-day operations and we don't fix it,
because two thirds are failing.
So why is B the right answer?
Because in B what needs to happen differently
is we have inside our organization the structure, the systems, the reviews.
We have the culture aligned.
We have the synergy of the way we work,
which makes sure that when we implement,
we are able to do it.
And when the strategy is not working, we know.
And then when we know, most importantly,
we then have the discipline to make the right changes,
and to take the right action,
because implementation is all about taking the right action.
Think about it.
Your customers don't notice your strategy,
they notice the actions you take in the implementation.
But of course, given the choice,
any leader wants a winning strategy with successful implementation.
So how do you do it, when most companies can't even craft a good strategy,
never mind implement it.
What does it take?
Well, first of all, they have to come over so many of the failures:
the failures of not communicating it,
not tracking it, not measuring it,
not aligning it, not motivating their people.
And once they do that, they have to understand
that strategy is about the choices
and implementation is about taking the right actions.
Let me emphasize this with a riddle.
Five birds sit on a fence.
Three decide to leave.
How many birds are left on the fence?
Zero. Two. Five.
Five birds sit on a fence and three decide to leave.
How many are left?
Five.
Why five?
They attended a phenomenal one-day conference
on how to move to the other side of the fence.
They even had a conference call on the first Monday of every month
discussing what to do to move to the other side of the fence.
But they didn't take the right actions.
Implementation is all about driving the right actions.
When Mars company was having a leadership off-site,
they started it in Prague in the morning
and then drove to Budapest which is about an eight-hour drive.
Why?
Along the way they stopped at the major malls,
so the leadership team could get out, visit the mall,
see what was going on, meet the customers, meet the staff,
look at the product placement, get back on board
and then discuss about the strategy.
They could see it in action.
It's all about putting your strategy into the right actions.
And we're doing it at a time
when strategy life-cycles are getting shorter and shorter,
so we're working faster than any other time before
when strategy now is maybe two, three years or even shorter.
So, to help leaders implement strategy, there are three broad themes.
The first one is, create awareness.
You have to get your people jumping and excited about adopting the new strategy.
They have to understand it.
Ninety-five percent of employees from our own research
don't even know their own company’s strategy.
If they don't know the strategy,
how can they take the right actions?
So first, we have to create awareness.
Once you build awareness, you then build excellence to sustain the strategy.
You start to look at the building blocks around culture,
around nurturing the communication, changing the measures.
Inside different organizations, they're making this happen today.
The ones who are moving with agile, who are working with speed,
they're constantly building on excellence.
And finally, you follow through.
The number one best practice of top-performing leaders
around the world is follow through.
After you've asked your team to do something, you follow up
to make sure they're doing it.
We have to follow up,
holding people accountable for participating in the implementation.
So strategy works like your map
and then you need a compass to guide you.
The compass shows you the different ways along the road.
So, a few years ago, we put together a compass for leaders
to help them understand what it would take to implement.
We call it the “implementation compass”.
And it shows you in more detail the eight areas required to implement strategy.
And I've already introduced them.
Looking at north on the compass and going round,
people and the business case and the communications
is what helps you create awareness.
You focus on the talents.
You focus on explaining why we need a new strategy
and then communicating what needs to be done.
Once you achieve that,
you build excellence by still nurturing your communication.
Far too often, in organizations, six months after the launch
nobody's talking about the strategy.
So we've got to keep sharing what's going on, what's working,
what to do differently, how we can make it better,
customer feedback.
Then we look at the measures.
You've got to change the measures when you change the strategy,
make sure we're measuring what's critical, what's important.
We have to make sure the culture is in place,
because in implementation, culture drives the way you implement.
So two organizations can have the same strategy,
but how they implement is driven by their culture.
And we have to change the processes,
because by default, when you change your strategy,
you're asking your staff to work differently.
So we have to change the way that they're working.
And once you do that, it's all about following through,
reinforcing and reviewing what's happening
not yearly, not every six months,
but from the CEO’s point of view, every quarter,
and from the organization department, every two weeks,
and for a leader, even every week review.
So the challenge we have is that leaders today need both the ability
to craft the strategy and the skill to implement it.
And we have to explore and understand
what it's going to take not just to create that strategy,
but to make sure that we buck the trend
and we're setting organizations up
to successfully implement and succeed in their strategy implementation.
Thank you.
(Applause)