How do you successfully execute a fundamental change in your business?
Strategy with an eye toward execution: Don’t develop your strategy in a vacuum.
Bring the Heat.
Take an unvarnished look at your company
Thoroughly evaluate your company to get a realistic picture of your position and a detailed understanding of your current and potential customers. Identify any gaps in your business model, the market potential, your competitive standing and your resources. Following a planning framework, such as SWOT, will help ensure that you haven’t missed any elements, enabling your resulting strategy to be more precise.
Solicit employees and managers for input
By communicating the business reasons for the change early and often, you help transition your company culture into the new model. This aids buy-in. Educate with clear, accurate information how all stakeholders will benefit from the new model. Then, continuously follow up throughout the year with every department, so the message can be internalized and you can receive feedback.
Focus on a few key initiatives
Some functions will need to be created or increased, whereas others will need to be decreased or eliminated. Be prepared to closely examine and evaluate every aspect of the business because old processes, outdated systems, and people without necessary skills can drag down performance. If you’ve communicated well with the affected employees and treated them with respect, it will ease the process.
Ensure that your infrastructure and resources can support your strategy
Do you have the infrastructure and operational procedures available to support your strategic initiatives? Do you have financial, physical, and human resources ready and available? If not, you must be willing to invest in them up front before taking steps to execute your strategy.
CEO + Founder
Provide dedicated resources to new initiatives
Your key strategic initiatives will need a structured implementation team with project management and committed staff. You will need to ensure that you have resource allocation methods in place for staffing, capital expenses, etc., to support both day-to-day business and the strategic initiatives. Regular reports on the progress of both day-to-day business and strategic initiatives will be important to successful outcomes.
Understand strategic leadership needs
Make sure that everyone in the top layers of leadership is on board with the strategy. Have a personnel plan that accounts for the differing skills that are needed. Often those who are good at running regular operations are not good at change management. You need people with the right skills and the right attitude to implement major strategic change.
Change means taking a hard look in the mirror.
Have you taken an unvarnished look at where you stand?
Your employees and managers
Have you solicited their input?
Have you focused on three to five key initiatives for your strategy?
Can it support your strategic initiatives?
Can you provide dedicated resources to the new initiatives?
Is everyone on board with the strategy? Do you have the right skills to execute strategic change?
Answers are easier than you think.
A NEXTLEVEL CASE STUDY
We’ve been there, done that.
A bank holding company had the highest and second-highest deposit market share in its two states of operation but faced competitive and potential acquisition threats. The company wanted to review its operations to respond to the potential threats.
The Senior Vice President and Manager of Corporate Planning and Development, now a NextLevel executive, assisted top executives in reviewing and resetting strategy and operations goals. He led a team that analyzed approximately two dozen competitors across the country. The team built a profile of “breakout” companies by analyzing their financial performance, business line composition and stock price performance. The team also performed a gap analysis of those companies’ structures and performance as compared to their own company.
The NextLevel executive then designed and implemented, with top executives’ participation, a total-organization restructuring to pursue a breakout strategy. The company redefined business lines, shifting from legal/state boundaries to company-wide businesses. They repositioned three businesses without natural geographic assets as national businesses to boost visibility and earnings momentum.
As part of the restructuring, the company built new corporate measurement systems and realigned incentives with the new metrics. They also changed corporate resource allocation processes and promoted several new leaders of the company. The restructuring was completed within six months.
Under this leadership, the company identified, negotiated and closed key acquisitions in two contiguous states to expand their base business. As a result, the company grew from $19 billion to $33 billion in assets over seven years. Ultimately, the company was sold at a substantial stock premium.