Strategy Execution
Strategy Execution
Strategy Execution
The
Execution
Shortcut
Prof. R. Kaplan
& Dr. D. Norton
Jeroen De Flander
Advance Praise
Without execution, there is no need for strategy.
We need to learn more about execution. Jeroen De Flander has added another chapter to the emerging science of strategy execution.
ProfESSOR Robert Kaplan,
Harvard Business School & Dr David Norton
To create a better future, great ideas alone will not make the difference.
What we need are great decisions on the execution road. This book explains in an engaging way how Just Do It's dont come automatically. It
only happens when the mind is triggered, the heart inspired, and willpower
strengthened.
Bert Stevens,
Vice President Europe Operations, Nike
In the real world, it doesn't matter how good looking you are or how smart
you are. What matters is getting things accomplished and that's what
The Execution Shortcut is all about.
Bill Saubert,
Senior Vice President Mastercard Advisors
There is only one thing better than successful execution of a great strategy
faster execution. In The Execution Shortcut, De Flander brilliantly illustrates
why the path to success is a long and winding road, fraught with dangers
and potential derailers. He also offers proven methods to significantly increase our chances of implementing our strategyby creating a strong emotional connection, focusing on decision patterns rather than to-do lists, and
overcoming basic human limitations. By taking his advice, we can accelerate
execution and create lasting success in any enterprisebig or small.
Bart Sweerman,
Managing Director, Enterprise & Public Sector EMEA, Cisco
Success requires the heart of a lover, the mind of a meditator, and the discipline of a soldier. Strategy execution requires a H3-connection. Embrace
heart, hands, and head and follow the execution path to the finish line.
Charles-Antoine Janssen,
Board Member, UCB
How to convert 'what' and 'how' into success through superb execution?
This book gives brilliant tips on execution excellence.
Atul Jain,
Senior Vice President, Samsung Electronics
The Execution Shortcut is a must read for every leader who wants to boost
strategy commitment and guide others through the implementation maze.
Caroline Hillegeer,
Senior Vice President Strategy, GDFSUEZ
I read this book on a long haul flight to the US, altitude 38,000 feet
but what I learned was applicable the day after.
Down to earth, feet on the ground.
Rudi Nerinckx,
Group Human Resources Director, Tessenderlo Group
Contents
Shortcut resources
Twitter, Elevator, and One-page Summary 153
Bob the Strategy Tourist 154
The Shortcut Mapa Memory Jogger 156
Notes159
Index175
Acknowledgements181
CHAPTER 1
stock analystswas utterly confused. This wasnt what theyd expected at all. Theyd imagined big promises about future earnings, a
bold vision or talk of some serious cost cutting. Anything but a safety
lecture.
As soon as the presentation was over, they scuttled out of the room.
One financial advisor raced to a payphone in the hotel lobby, called
his 20 largest clients and said, The board has put a hippy in charge
and hes going to kill the company. He then urged each of them to get
rid of all their stock immediately, before the news came out.
It turned out to be the worst piece of advice he ever gave.
When the Aluminum Company of Americabetter known as Alcoafailed to perform, they hired Paul ONeill as their new CEO, hoping he could turn the tide. He did. In the end, he stayed with the company for 13 years. Under his watch, Alcoas injury rate fell to one-twentieth the US average. The stock price had risen to 5 times the level of
1987. If that financial advisor had told his clients to buy a million stock
instead, they would have earned more than 1 million in dividends and
their stock would be worth 5 million.
Even today, ONeills legacy lives on. Alcoa remains one of the safest companies in the world. In 2010, not one single employee day was
lost due to injury in 82 percent of Alcoa factories. In fact, on average,
youre more likely to get injured at an accountancy office or software
company than by handling molten aluminum at Alcoa.
So how did that happen? Alcoa doesnt specialize in selling safety equipment. Theyre into aluminum. You wouldnt have expected
ONeills crazy idea to get very far. But somehow it did. As a result, a
sluggish aluminum company became one of the most successful
companies in the industry. And it went from strength to strength, long
after the individual who had sparked its journey had left the company.
Early on December 14 2004 at a large industry convention, a 57-yearold man with an idea took to the stage. He said, Heres what I think we
should do. I think we should save 100,000 lives. And I think we should
do that by June 14 200618 months from today. Some is not a number and soon is not a time. Heres the number: 100,000. Heres the
time: June 14 20069am.
The audiencea large group of healthcare leaderswas surprised.
This wasnt what theyd expected at all. Of course there was a problem.
At the time, everyone knew that the improvement potential was huge.
Between the healthcare we have and the care we could have lies not
a gap, but a chasm, concluded the US Institute of Medicine in 2001
in their landmark report about healthcare in the next century. But its
one thing to know about an execution gap, and another to close it. The
road to the finish line was filled with road blocks. And the healthcare
leaders just didnt see how Donald Berwick, CEO of a small not-forprofit organization, could mobilize 3,000 hospitals75 percent of all
US hospital bedsto buy in to his crazy idea to save 100,000 lives in
18 months.
But they were proved wrong.
Exactly 18 months later, Berwick took to the stage again and said,
Hospitals enrolled in the 100,000 Lives Campaign have collectively
prevented an estimated 122,300 avoidable deaths and, as importantly,
have begun to institutionalize new standards of care that will continue
to save lives and improve health outcomes into the future.
On July 7 2010, Berwick left his position as president and CEO of
the Institute for Healthcare Improvements (IHI). But his legacy lives
on. By December 2008, 4,050 hospitals had joined the program. Eight
states enrolled 100 percent of their hospitals in the campaign. Other
countries like Brazil, Canada, and Denmark also embraced the program. On top of that, there was a clear spillover effect to other domains like the 100,000 Homes Campaigna national movement of
1.
Villains on the Execution Road
We all have great ideas. And we often need the help of others to let
them shine. But getting people to support our brainchild is easier said
than done. We knowand have probably experienced firsthandthat
people dont always do what we like them to do. Sometimes they just
dont seem to care about our idea and we wonder why they dont see
the same benefits that were seeing. Sometimes they seem to make all
the wrong moves and we wonder, How difficult can it be? And sometimes they just seem too busy with other things and we think, Why
dont you push a little harder. Just like we do.
We all struggle to get our ideas across. And thats because successful H3-connections are much harder to make than many of us realize.
And failure doesnt come so much because of the quality of the idea,
but because of age-old, programmed human behavior. It turns out
that human nature kills big ideas. Why not join me in the lab for a few
interesting experiments?
Imagine youre sitting with 15 other people in a small room. The
host asks your neighbor to tap out the rhythm of a famous song like
Happy Birthday on the table. You have to guess the tune. How much
chance do you think you have of guessing the song correctly?
Youve just taken part in an experiment designed by Elizabeth
Newton from Stanford University. Over the course of the study, Newton repeated the process 120 times. Only 4 songs2.5 percentwere
guessed correctly. Not many, is it? But heres the interesting thing. Before the Listeners tried to guess the song title, she would ask the Tapper and the Listeners to predict their success rate. While the Listeners thought they would get 10 percent of the songs right, the Tappers
thought the Listeners would guess a whopping 50 percent of their
songs.
Isnt that amazing? The average Tapper got the message across
1 time in 40, but they thought theyd hit a homerun 1 out of 2. They
overestimated their communication abilities by a factor of 20. So what
happened? Does tapping make you a poor judge of your abilities? The
simple answer is yes. The scientific name for this human phenomenon
is the Curse of Knowledge. Heres how it works. When a Tapperthe
idea creatortaps the song, the tune is playing along in his head. Hes
hearing the melody to Happy Birthday in his head while tapping the
song. But the Listeners dont hear that music. The only information
they get is a strange Morse code. Its very hard for a Tapper to judge the
quality of his taps as he cant undo the tune playing in his head while
tapping. The knowledge has cursed him.
If we transport the Curse of Knowledge to the business world, its
not difficult to imagine that when an idea creatora CEO, manager,
policymaker or entrepreneurfinishes communicating and thinks,
Im sure everybody gets my great idea after my extensive communication efforts, hes probably reached no more than 3 percent of his
But theres more. Lets try a second experiment. This time, draw an imaginary E on your forehead with your finger.
Researcher Adam Galinsky of Northwestern University and his
colleagues divided participants into two groups. Those from the first
were primed to feel powerful. How? They had to recall and write about
an incident where they had power over others. The other group was
asked to write about an incident in which someone else had power
over them. Next, all participants were asked to draw the letter E on
their foreheads.
Now, there are two ways to draw an imaginary E on your forehead. One way is as if youre reading it yourself, with the solid bar on
your left and the openings on the right. The other way is to draw the E
as if another person is reading it, with the solid bar on your right and
the openings on the left. The first choice produces a backward and illegible E from the viewers perspective. The second choice leads to an
E thats backwards to you.
The result? Surprisingly, the high-power participants from the first
group were 3 times more likely to draw a self-oriented E. Galinsky argues that power makes us blind. What does it mean? It means that the
more power we have, the harder we find it to imagine the world from
someone elses perspective. We draw the letter backwards because we
are used to others adapting to our point of view. It also means that
the effect of the Curse of Knowledge is likely to be reinforced when
the person communicating is the boss. Houston, we might have a big
problem.
Through a series of lab tests, I wanted to show you that our instinctive
behavior complicates H3-connections. They are much harder to real-
10
the group was allowed to dig in and eat the cookies and the second
group was asked to eat radishes.
Next, Baumeisters team gave the participants a second, supposedly unrelated challenge. They had to trace a geometric figure without
retracing any lines or lifting their pencils off the paper. After a brief test
period, they were told that they had as many attempts as they wanted.
They would be judged only on whether or not they could finish tracing
the figure. If they wished to stop beforehand, they had to ring a bell.
Unknown to the participants, these geometric figures were impossible to solve. The researchers wanted to test the effect of Willpower Depletion. In other words, would the group who had eaten the cookies put
in more execution effort than the group who had selected to eat radishes? The effect of the manipulation was immediate and undeniable.
On average, the cookie contestants kept going for 18 minutes,
making 34 attempts to solve the puzzle. However, the radish group
gave up after 8 minutes, having made only 19 attempts. As they had
to resist the cookies and force themselves to eat vegetables, they could
no longer muster the will to fully engage in another torturous task.
They were already mentally exhausted. They ran out of willpower. The
villain won.
11
12
2.
The Shortcut Roadmap
We learn from successful idea journeys such as the 100,000 Lives Campaign and Alcoas zero injuries ambition that it all starts with a triple
connection: our strategy needs to connect with the heads, hearts, and
hands of those involvedthe travelers. But we also learn from science
that those connections are much more difficult to make than we think
because of the intricacy of human nature.
This book offers a coherent set of tested movesa shortcut
mapto navigate these human complexities and make successful
H3-connections.
13
14
make others more aware of our big idea, make them care, and boost
their energy levels to move it forwards. But the shortcut journey isnt a
free ride. Traveling the execution shortcut requires effort. Dont expect
to cruise a 5-lane highway in a red convertible on a Wednesday afternoon, wind blowing in your hair, stopping for a nice coffee. Instead,
you should expect a long trek, carrying your own supplies, in a far-off
country. The signposts are unreadable and youre with a group of fellow
travelers who arent sure if they should be following you or not. But what
might initially feel like an impossible journey is just a tough hike across
a country you dont know so well. You might even come to enjoy the trip.
In the end, to succeed as a strategist, we need a thorough understanding of what makes people tick. And thats on top of industry dynamics, customer behaviors, and financial savyiness. We need to have
a deep understanding of how people process information and make
decisions, what makes them care about an idea, and what gives them
the energy to take action. And when we do, the execution shortcut becomes visible.
IN SEARCH OF the execution shortcut, were going to venture out of
the lab and into the real world. Well go to Canada and find out about
a crucial decision pattern. Well go to Egypt and learn about the importance of no in strategy. Well go to a monastery high up in the Indian Himalaya to understand the importance of focus. And well meet
amazing people like Stephen Denning who reshaped the future of the
World Bank with a single strategy story. Well also meet Ratan Tata who
inspired 600 engineers to design the cheapest car in the world and
Billy Beane who turned a crumbling baseball team into a winning machine. Well join a South Pole expedition to learn about the power of
habit, run a marathon to test the impact of measurement, and take a
combat course to experience what happens if you truly believe in your
abilities.
The point of all of this is to answer 2 simple questions that lie at the
heart of what we would all like to accomplish as executives, managers, policymakers, and entrepreneurs. Why is it that some great strategies get executed and others dont? And what can we do to deliberately
speed up and control successful strategy journeys of our own?
15