Leadership

Issues in strategy implementation: Leadership

Note: For the first article in this series please go to Issues in Strategy Implementation.

A small business had a very chaotic style of functioning. I will focus on the development team in this example. Work of the day depended on which customer complained the loudest to the CEO. This caused the pending task list to grow exponentially. And when the current customer was a bit satisfied, they turned their attention to the next screaming customer, and so on. This is a vicious cycle. When you throw in new customers into the mix, the cycle keeps growing. The development and customer support team were a demotivated lot. No new R&D was taking place. It got to a point where the support team just fixed one bug; it in turn introduced 10 other bugs. There was no pride in ownership of work. It was only a matter of time when the good people would leave.

As a marketing consultant, I was getting concerned since this was hurting our brand. Customer experience was inconsistent with what marketing was communicating. And that I how I found myself in the midst of this operational chaos.

We were four top-level managers – marketing, development, testing and finance. We identified customers who were profitable and proposed to let go of the customers who were not. The CEO agreed. The next thing we agreed upon was a process for customer support. The CEO agreed to direct customer calls to the help-desk. These were just some of the steps we proposed to implement. It lasted for one day. A customer called the CEO directly to complain and out went all our decisions. It was chaos all over again. This scenario repeated itself over and over again. The emergencies never seemed to stop. Moreover, we were still responding to requests from customers we agreed to let go.

This just goes to show – if the CEO does not exert the leadership needed to drive strategy implementation, change will just not happen. Ultimately, the CEO determines how successful strategy implementation is going to be. How CEOs lead the strategy implementation depends on a number of factors:

1. leadership style they are comfortable with
2. their administrative, interpersonal and problem-solving skills
3. their personal relationships within the organization
4. their experience in business
5. their perspective on their role

Major initiatives to implement business strategies are usually led by the CEO and supported by the top-level managers. Weak leadership can destroy the soundest of strategies. The single most visible factor that differentiates successful strategy implementation from failed attempts is competent leadership at the top. CEOs plant the seeds of change. Change has to be driven from the top. Only they have the power and organizational influence to bring about change.

Actions speak louder than words. Even though the CEO in the example above agreed to implement change, his actions effectively wrecked any chance of change. Rewards or punishments drive how employees act. Think about what you do. Do you see your rewards promoting the strategy? More on this later.

I used to think that businesses are not capable to making such a rookie mistake. I was surprised to learn, this story repeats itself in the vast majority of small businesses. I learnt quite early never to assume CEOs and entrepreneurs understand this. There are very few well-run organizations with good and competent leadership at the top.

What defines a competent leader? Competent leaders are proactive agents of change, not reactive followers and analyzers. A competent leader has many roles to fulfill: visionary, strategist, culture builder, resource acquirer, coach and mentor, negotiator, motivator, arbitrator, policy builder and enforcer among other things. I suggest you read Ram Charan’s “The CEO as a coach: Interview with Allied Signal’s Lawrence A. Bossidy” for an insightful reading on how CEOs leads the change process.

They need to know when to be the hard-nosed taskmaster, the perceptive listener, or the participative decision maker. For effective strategy execution, the CEO has to:

1. stay on top of things by monitoring progress, anticipating obstacles and taking corrective actions where necessary
2. motivate and energize the organization members
3. be fair and ethical in dealings with all stakeholders
4. ensure the organization is agile to changing market conditions and competitive forces

These are just some of the points for the entrepreneur. Each organization is different – you can’t blindly follow a strategy just because it worked in the past or has worked in another organization. Your organization’s reality is different from others. As a CEO you need to customize strategy to suit your organization. If things do not work, you need to know why and quickly. That is why monitoring is important.

A final point. As a CEO, you need to focus on multiple short-term successes. Winning small battles will win you the war. It is making right decisions in the face of uncertainties – each fraught with risks – that make you a successful CEO.