300 WORDS POST

Key terms

business case p. 521

hypothesis testing p. 521

strategic issue-selling p. 512

strategic plan p. 521

strategic planners p. 503

strategy projects p. 520

strategy workshops p. 518

15 THE PRACTICE OF STRATEGY

Learning outcomes After reading this chapter you should be able to:

● Assess who to involve in strategising, with regard particularly to

top managers , strategy consultants , strategic planners and

middle managers .

● Evaluate different approaches to strategising activity, including

analysis , issue-selling , decision making and communicating .

● Recognise key elements in various common strategy

methodologies, including strategy workshops , projects ,

hypothesis testing and writing business cases and strategic

plans .

Strategic Position

Strategic Choices Strategy

in Action

Evaluating

Processes Organising

Changing Practice

M15_JOHN2552_10_SE_C15.indd 500M15_JOHN2552_10_SE_C15.indd 500 10/16/13 10:57 AM10/16/13 10:57 AM

Co py ri gh t © 2 01 3. P ea

rs on . Al l ri gh ts r es er ve d. M ay n ot

b e re pr od uc ed i n an y fo rm w it ho ut p er mi ss io n fr om t he p ub li sh er , ex ce pt f ai r us es p er mi tt ed u nd er U .S . or a pp li ca bl e

co py ri gh t la w.

EBSCO Publishing : eBook Collection (EBSCOhost) - printed on 12/25/2018 11:04 AM via AMERICAN PUBLIC UNIV SYSTEM AN: 1418653 ; Johnson, Gerry.; Exploring Strategy Text & Cases Account: s7348467

INTRODUCTION 501

15.1 INTRODUCTION

In 2012, 37-year-old Marissa Mayer moved from a senior position at Google to become Chief Executive of Yahoo, the struggling web-portal giant. She promised a ‘deep-dive’ review of Yahoo’s situation before developing a new strategy to save the company from its longstanding decline. In between, Marissa Mayer was also due to give birth to her fi rst child.

If you were appointed to a leadership position in an organisation, or took on the role of strategic planner or strategy consultant, what would you do to review and develop strategy? Who would you involve and how would you organise them? This fi nal chapter focuses on the practice of making strategy. Whereas Chapter 12 introduced the overall organisational pro- cess of strategy development, this chapter is about what people do inside the process. The aim is to examine the practicalities of strategy making for top managers, strategic planning special- ists, strategy consultants or managers lower down the organisation.

The chapter has three sections as shown in Figure 15.1 :

● The strategists . The chapter starts by looking at the various people involved in making strategy. It does not assume that strategy is made just by top management. As pointed out in Chapter 12 , strategy often involves people from all over the organisation, and even people from outside. The Key Debate at the end of the chapter addresses the controversial involvement of external strategy consultants. Readers can ask themselves how they fi t into this set of strategists, now or in the future.

● Strategising activities . The chapter continues by considering the kinds of work and activity that strategists carry out in their strategy making. This includes not just the strategy analysis that has been central to a large part of this text, but also the selling of strategic issues, the realities of strategic decision making and the critical task of communicating strategic decisions throughout the organisation.

Figure 15.1 The pyramid of strategy practice

M15_JOHN2552_10_SE_C15.indd 501M15_JOHN2552_10_SE_C15.indd 501 10/16/13 10:57 AM10/16/13 10:57 AM

Co py ri gh t © 2 01 3. P ea

rs on . Al l ri gh ts r es er ve d. M ay n ot

b e re pr od uc ed i n an y fo rm w it ho ut p er mi ss io n fr om t he p ub li sh er , ex ce pt f ai r us es p er mi tt ed u nd er U .S . or a pp li ca bl e

co py ri gh t la w.

EBSCO Publishing : eBook Collection (EBSCOhost) - printed on 12/25/2018 11:04 AM via AMERICAN PUBLIC UNIV SYSTEM AN: 1418653 ; Johnson, Gerry.; Exploring Strategy Text & Cases Account: s7348467

502 CHAPTER 15 THE PRACTICE OF STRATEGY

● Strategising methodologies . The fi nal section covers some of the standard methodologies that managers use to carry out their strategising activities. This includes strategy work- shops for formulating or communicating strategy; strategy projects and strategy consulting teams; hypothesis testing to guide strategy work; and the creation of strategic plans and business cases.

Figure 15.1 integrates these three sections in a pyramid of practice . 1 The pyramid highlights three questions that run through this chapter: who to include in strategy making; what to do in carrying out strategising activity; and which strategising methodologies to use in this strategising activity. Placing strategists at the top of the pyramid emphasises the role of managerial discretion and skill in strategy making. It is the strategists who drive both the strategising activity and the strategy methodologies that are at the base of the pyramid. Strategists’ choices and skill with regard to activity and methodologies can make a real differ- ence to fi nal outcomes. The rest of the chapter seeks to guide practising strategists through the key choices they may have to make in action.

15.2 THE STRATEGISTS

This section introduces the different types of people potentially involved in strategy. It starts at the top management level, but also addresses strategic planners, consultants and middle man- agers. One key issue is who should be involved in strategy making.

15.2.1 Top managers and directors

The conventional view is that strategy is the business of top management. This view suggests that top management are clearly separated from operational responsibilities, so that they can focus on overall strategy. 2 If top managers are directly involved in operations such as sales or service delivery, they are liable to get distracted from long-term issues by day-to-day responsi- bilities and to represent the interests of their departments or business units rather than the interests of their organisation as a whole. In the private sector at least, top managers’ job titles underline this strategic responsibility: company directors set direction, managers manage.

In most organisations, it is the board of directors (or their equivalents) who holds ultimate responsibility for strategy (see Chapter 4 ). However, different roles are played by different board members, whether chief executive offi cer , the top management team or non-executive directors :

● The chief executive offi cer is often seen as the ‘chief strategist’, ultimately responsible for all strategic decisions. Chief executives of large companies typically spend about one third of their time on strategy. 3 Michael Porter stresses the value of a clear strategic leader, some- body capable of setting a disciplined approach to what fi ts and what does not fi t the overall strategy. 4 In this view, the chief executive offi cer (or managing director or equivalent top individual) owns the strategy and is accountable for its success or failure. The clarity of this individual responsibility can no doubt focus attention. However, there are at least two dan- gers. First, centralising responsibility on the chief executive offi cer can lead to excessive personalisation. Organisations respond to setbacks simply by changing their chief executive offi cer, rather than examining deeply the internal sources of failure. Second, successful chief executives can become over-confi dent, seeing themselves as corporate heroes and

M15_JOHN2552_10_SE_C15.indd 502M15_JOHN2552_10_SE_C15.indd 502 10/16/13 10:57 AM10/16/13 10:57 AM

Co py ri gh t © 2 01 3. P ea

rs on . Al l ri gh ts r es er ve d. M ay n ot

b e re pr od uc ed i n an y fo rm w it ho ut p er mi ss io n fr om t he p ub li sh er , ex ce pt f ai r us es p er mi tt ed u nd er U .S . or a pp li ca bl e

co py ri gh t la w.

EBSCO Publishing : eBook Collection (EBSCOhost) - printed on 12/25/2018 11:04 AM via AMERICAN PUBLIC UNIV SYSTEM AN: 1418653 ; Johnson, Gerry.; Exploring Strategy Text & Cases Account: s7348467

THE STRATEGISTS 503

launching strategic initiatives of ever-increasing ambition. The over-confi dence of heroic leaders often leads to spectacular failures. Jim Collins’ research on ‘great’ American com- panies that outperformed their rivals over the long term found that their chief executive offi cers were typically modest, steady and long-serving. 5

● The top management team , often an organisation’s executive directors, also share respon- sibility for strategy. They can bring additional experience and insight to the chief executive offi cer. In theory, they should be able to challenge the chief executive offi cer and increase strategic debate. In practice, the top management team are often constrained in at least three ways. First, except in the largest companies, top managers often carry operational respon- sibilities that either distract them or bias their strategic thinking: for example, in a business the marketing director will have ongoing concerns about marketing, the production director about production, and so on. In the public sector the top management team will also, very likely, be heads of operating departments. Second, top managers are also frequently appointed by the chief executive offi cer; consequently, they may lack the independence for real challenge. Finally, top management teams, especially where their members have similar backgrounds and face strong leadership, often suffer from ‘ groupthink ’, the tendency to build strong con- sensus among team members and avoid internal questioning or confl ict. 6 Top management teams can minimise groupthink by fostering diversity in membership (e.g. differences in age, career tracks and gender), by ensuring openness to outside views, for example those of non-executive directors, and by promoting internal debate and questioning. Research indicates that organisations with cultures of internal ‘contestation’ are more able to meet the challenge of strategic change over the long run (see Illustration 14.5 ). 7

● Non-executive directors have no executive management responsibility within the organisation, and so in theory should be able to offer an external and objective view on strategy. Although this varies according to national corporate governance systems (see section 4.3.2 ), in a public company the chairman of the board is typically non-executive. The chairman will normally be consulted closely by the chief executive offi cer on strategy, as he or she will have a key role in liaising with investors. However, the ability of the chairman and other non-executives to contribute substantially to strategy can be limited. Non-executives are typically part-time appointments. The predominant role for non-executive directors in strategy, therefore, is consultative, reviewing and challenging strategy proposals that come from the top management executive team. A key role for them also is to ensure that the organisation has a rigorous system in place for the making and renewing of strategy. It is therefore important that non-executives are authoritative and experienced individuals, that they have independence from the top management executive team and that they are fully briefed before board meetings.

15.2.2 Strategic planners Strategic planners , sometimes known as strategy directors, strategy analysts or similar, are those with a formal responsibility for coordinating the strategy process (see Chapter 12 ). Although small companies very rarely have full-time strategic planners, they are common in large companies and increasingly widespread in the public and not-for-profi t sectors. As in Illustration 15.1 , organisations frequently advertise for strategic planning jobs. Here, the personal specifi cations give a clear picture of the types of role a typical strategic planner might be expected to play. In a large corporation a strategic planner would be not only working on a three-year strategic plan, but investigating acquisition targets, monitoring competitors and

M15_JOHN2552_10_SE_C15.indd 503M15_JOHN2552_10_SE_C15.indd 503 10/16/13 10:57 AM10/16/13 10:57 AM

Co py ri gh t © 2 01 3. P ea

rs on . Al l ri gh ts r es er ve d. M ay n ot

b e re pr od uc ed i n an y fo rm w it ho ut p er mi ss io n fr om t he p ub li sh er , ex ce pt f ai r us es p er mi tt ed u nd er U .S . or a pp li ca bl e

co py ri gh t la w.

EBSCO Publishing : eBook Collection (EBSCOhost) - printed on 12/25/2018 11:04 AM via AMERICAN PUBLIC UNIV SYSTEM AN: 1418653 ; Johnson, Gerry.; Exploring Strategy Text & Cases Account: s7348467

504 CHAPTER 15 THE PRACTICE OF STRATEGY

ILLUSTRATION 15.1

Wanted: Team member for strategy unit

The following job advertisement is adapted from several recent

advertisements appearing in the Financial Times ( exec-appointments.

com ). It gives an insight into the kind of work strategic planners do and

the skills and background required.

Strategy Analyst sought for a fast-paced role in a

multinational media business.

Reporting to the company’s Chief Strategy Officer,

the Strategy Analyst will be involved in driving the

company’s overall growth strategy across the business in

Europe. The person appointed will be expected to

carry out in-depth analyses of current and potential

business strategies, business unit performance, cus-

tomer markets and segments, and potential acquisi-

tion targets or joint venture partners in different

territories. The person will probably have a Business

Administration, Accounting or similar qualification.

Key responsibilities:

● collection of business and competitor intelligence

● evaluation of business unit performance, actual

and potential

● evaluation of new market opportunities and initiatives

● evaluation of possible acquisition targets and joint

venture partners

● contribution to strategic planning at the

corporate-level

● assistance to business units in preparing their own

strategic plans

Essential competences :

● good team player able to work in multicultural

environments

● confidence with senior management

● comfortable with complex or ambiguous data and

situations

● good project management and work priorisation

skills

● excellent strategic and market analysis skills

● financial modelling skills, including DCF

● excellent Excel and PowerPoint skills

● good presentation, communication and influence

skills

● prepared for frequent travel

Desirable experience :

The person appointed will be familiar with a multi-

national corporate environment and be comfortable

working in different country contexts. Top-flight

academic qualifications and relevant professional

qualifications are also highly desirable.

Team :

The person appointed will join an existing team of

four junior and senior Strategy Analysts based in the

corporate head-office in central London. Previous

post-holders have progressed to challenging roles

elsewhere in the business within two to three years of

appointment.

Questions 1 What would be the attractions of this job for

you? What would be the disadvantages?

2 What relevant skills and experience do you

already have, and what skills and experience

would you still need to acquire before you

were able to apply for this job?

M15_JOHN2552_10_SE_C15.indd 504M15_JOHN2552_10_SE_C15.indd 504 10/16/13 10:57 AM10/16/13 10:57 AM

Co py ri gh t © 2 01 3. P ea

rs on . Al l ri gh ts r es er ve d. M ay n ot

b e re pr od uc ed i n an y fo rm w it ho ut p er mi ss io n fr om t he p ub li sh er , ex ce pt f ai r us es p er mi tt ed u nd er U .S . or a pp li ca bl e

co py ri gh t la w.

EBSCO Publishing : eBook Collection (EBSCOhost) - printed on 12/25/2018 11:04 AM via AMERICAN PUBLIC UNIV SYSTEM AN: 1418653 ; Johnson, Gerry.; Exploring Strategy Text & Cases Account: s7348467

THE STRATEGISTS 505

helping business unit managers with their own plans. Thus the role is not just about analysis in the back offi ce. Strategic planning also involves communications, teamwork and infl u- encing skills.

Although the job in Illustration 15.1 is being advertised externally, strategic planners are often drawn from inside their own organisations. Internal strategic planners are likely to have an advantage in the important non-analytical parts of the job. As internal recruits, they bring to the planning role an understanding of the business, networks with key people in the organisation and credibility with internal audiences. Moreover, an internal appointment to a strategic planning role can serve as a developmental stage for managers on track for top management roles. Participating in strategy provides promising managers with exposure to senior management and gives them a view of the organisation as a whole.

Strategic planners do not take strategic decisions themselves. However, they typically have at least three important tasks: 8

● Information and analysis . Strategic planners have the time, skills and resources to provide information and analysis for key decision-makers. This might be in response to some ‘trigger’ event – such as a possible merger – or as part of the regular planning cycle. A background of good information and analysis can leave an organisation much better pre- pared to respond quickly and confi dently even to unexpected events. Strategic planners can also package this information and analysis in formats that ensure clear communication of strategic decisions.

● Managers of the strategy process . Strategic planners can assist and guide other managers through their strategic planning cycles (see Illustration 12.2 in Chapter 12 ). This can involve acting as a bridge between the corporate centre and the businesses by clarifying corporate expectations and guidelines. It could also involve helping business-level man- agers develop strategy by providing templates, analytical techniques and strategy training. This bridging role is important in achieving alignment of corporate-level and business-level strategies. Researchers 9 point out that this alignment is often lacking; many organisations do not link fi nancial budgets to strategic priorities, or employee performance metrics to strategy implementation.

● Special projects . Strategic planners can be a useful resource to support top management on special projects, such as acquisitions or organisational change. Here strategy planners will typically work on project teams with middle managers from within the organisation and often with external consultants. Project management skills are likely to be important.

In addition to these tasks, strategic planners typically work closely with the CEO, discussing and helping refi ne his or her strategic thinking. Indeed, many strategic planners have their offi ces physically located close to the CEO. Although strategic planners may have relatively few resources – perhaps a small team of support staff – and little formal power, their closeness to the CEO typically makes them well-informed and infl uential. Managers throughout an organ- isation are likely to use them to sound out ideas.

15.2.3 Middle managers As in section 15.2.1 , a good deal of conventional management theory excludes middle man- agers from strategy making. Middle managers are seen as lacking an appropriately objective and long-term perspective, being too involved in operations. In this view, middle managers’ role is limited to strategy implementation. This is, of course, a vital role.

M15_JOHN2552_10_SE_C15.indd 505M15_JOHN2552_10_SE_C15.indd 505 10/16/13 10:57 AM10/16/13 10:57 AM

Co py ri gh t © 2 01 3. P ea

rs on . Al l ri gh ts r es er ve d. M ay n ot

b e re pr od uc ed i n an y fo rm w it ho ut p er mi ss io n fr om t he p ub li sh er , ex ce pt f ai r us es p er mi tt ed u nd er U .S . or a pp li ca bl e

co py ri gh t la w.

EBSCO Publishing : eBook Collection (EBSCOhost) - printed on 12/25/2018 11:04 AM via AMERICAN PUBLIC UNIV SYSTEM AN: 1418653 ; Johnson, Gerry.; Exploring Strategy Text & Cases Account: s7348467

506 CHAPTER 15 THE PRACTICE OF STRATEGY

However, there is a strong case for involving middle managers in strategy making itself. First, in fast-moving and competitive environments, organisations often need to decentralise strategic responsibilities to increase speed of response: it takes too long to refer everything to the top. Second, in knowledge-intensive sectors (such as design, consulting or fi nance, but many others too) the key source of competitive advantage is typically the knowledge of people actually involved in the operations of the business. Middle managers at operational level can understand and infl uence these knowledge-based sources of competitive advantage much more effectively than remote top managers. Many knowledge-intensive fi rms (e.g. lawyers or accountants) are organised as partnerships, where a signifi cant proportion of staff have a right to consultation on strategic decisions in their formal role as partners, even if they are not themselves members of the top management group.

Against this background, there are at least four strategy roles middle managers can play: 10

● Information source . Middle managers’ knowledge and experience of the realities of the organisation and its market is likely to be greater than that of many top managers. So middle managers are a potential source of information about changes in the strategic position of the organisation.

● ‘ Sense making ’ of strategy. Top management may set strategy, but it is often middle managers who have to explain it in the business units. 11 Middle managers are therefore a crucial relevance bridge between top management and members of the organisation at lower levels, in effect translating strategy into a message that is locally relevant. If misinterpretation of that intended strategy is to be avoided, it is therefore vital that middle managers understand and feel an ownership of it.

● Reinterpretation and adjustment of strategic responses as events unfold. A strategy may be set at a certain point of time, but circumstances may change or conditions in particular units may differ from assumptions held by top management. Middle managers are necessarily involved in strategy adaptation because of their day-to-day responsibilities in strategy implementation.

● Champions of ideas . Given their closeness to markets and operations, middle managers may not only provide information but champion new ideas that can be the foundation of new strategies.

Middle managers may increase their infl uence on strategy when they have:

● Key organisational positions . 12 Middle managers responsible for larger departments, business units or strategically important parts of the organisation have infl uence because they are likely to have critical knowledge. Also, managers with outward-facing roles (e.g. in market- ing) tend to have greater strategic infl uence than managers with inward-facing roles (such as quality or operations).

● Access to organisational networks . Middle managers may not have hierarchical power, but can increase their infl uence by using their internal organisational networks. Drawing together information from network members can help provide an integrated perspective on what is happening in the organisation as a whole, something that otherwise can be diffi cult to get when occupying a specialised position in the middle of an organisation. Mobilising networks to raise issues and support proposals can also give more infl uence than any middle managers can achieve on their own. Strategically infl uential middle managers are therefore typically good networkers.

M15_JOHN2552_10_SE_C15.indd 506M15_JOHN2552_10_SE_C15.indd 506 10/16/13 10:57 AM10/16/13 10:57 AM

Co py ri gh t © 2 01 3. P ea

rs on . Al l ri gh ts r es er ve d. M ay n ot

b e re pr od uc ed i n an y fo rm w it ho ut p er mi ss io n fr om t he p ub li sh er , ex ce pt f ai r us es p er mi tt ed u nd er U .S . or a pp li ca bl e

co py ri gh t la w.

EBSCO Publishing : eBook Collection (EBSCOhost) - printed on 12/25/2018 11:04 AM via AMERICAN PUBLIC UNIV SYSTEM AN: 1418653 ; Johnson, Gerry.; Exploring Strategy Text & Cases Account: s7348467

THE STRATEGISTS 507

● Access to the organisation’s ‘strategic conversation’ . Strategy making does not just happen in isolated, formal episodes, but is part of an ongoing strategic conversation among respected managers. 13 To participate in these strategic conversations middle managers should: maximise opportunities to mix formally and informally with top managers; become at ease with the particular language used to discuss strategy in their organisation; familiarise themselves carefully with the key strategic issues; and develop their own personal contribu- tion to these strategic issues.

In the public sector elected politicians have traditionally been responsible for policy and public offi cials supposed to do the implementation. However, three trends are challenging this division of roles. 14 First, the rising importance of specialised expertise has shifted infl uence to public offi cials who may have made their careers in particular areas, while politicians are typically generalists. Second, public-sector reform in many countries has led to increased externalisation of functions to quasi-independent ‘agencies’ or ‘QUANGOs’ (quasi-autonomous non-governmental organisations) which, within certain constraints, can make decisions on their own. Third, the same reform processes have changed internal structures within public organisations, with decentralisation of units and more ‘executive’ responsibility granted to public offi cials. In short, strategy is increasingly part of the work of public offi cials too. The Wychavon case at the end of this chapter exemplifi es some of these issues.

15.2.4 Strategy consultants External consultants are often used in the development of strategy. Leading consultancy fi rms that focus on strategy include Bain, the Boston Consulting Group and McKinsey & Co. Most of the large general consultancy fi rms also have operations that provide services in strategy development and analysis. There are also smaller ‘boutique’ consultancy fi rms and individual consultants who specialise in strategy.

Consultants may play different roles in strategy development in organisations: 15

● Analysing, prioritising and generating options . Strategic issues may have been identifi ed by executives, but there may be so many of them, or disagreement about them, that the organ- isation faces a lack of clarity on how to go forward. Consultants may analyse such issues afresh and bring an external perspective to help prioritise them or generate options for executives to consider. This may, of course, involve challenging executives’ preconceptions about their views of strategic issues.

● Transferring knowledge . Consultants are carriers of knowledge between their clients. Strategy ideas developed for one client can be offered to the next client.

● Promoting strategic decisions . Consultants do not take decisions themselves, but their analy- sis and ideas may substantially infl uence client decision-makers. A number of major consul- tancies have been criticised in the past for undue infl uence on the decisions made by their client organisation, leading to major problems. For example, General Electric blamed McKinsey & Co.’s advice that the economic crisis of 2008 onwards was only temporary for its decision to delay cost cutting and rationalisation until long after many of its competitors.

● Implementing strategic change . Consultants play a signifi cant role in project planning, coach- ing and training often associated with strategic change. This is an area that has seen con- siderable growth, not least because consultants were criticised for leaving organisations with consultancy reports recommending strategies, but taking little responsibility for actually making these happen.

M15_JOHN2552_10_SE_C15.indd 507M15_JOHN2552_10_SE_C15.indd 507 10/16/13 10:57 AM10/16/13 10:57 AM

Co py ri gh t © 2 01 3. P ea

rs on . Al l ri gh ts r es er ve d. M ay n ot

b e re pr od uc ed i n an y fo rm w it ho ut p er mi ss io n fr om t he p ub li sh er , ex ce pt f ai r us es p er mi tt ed u nd er U .S . or a pp li ca bl e

co py ri gh t la w.

EBSCO Publishing : eBook Collection (EBSCOhost) - printed on 12/25/2018 11:04 AM via AMERICAN PUBLIC UNIV SYSTEM AN: 1418653 ; Johnson, Gerry.; Exploring Strategy Text & Cases Account: s7348467

508 CHAPTER 15 THE PRACTICE OF STRATEGY

The value of strategy consultants is often controversial (see the Key Debate at the end of this chapter). But consultants are often blamed for failures when it is the client’s poor management of the consulting process that is ultimately at fault. Many organisations select their consultants unsystematically, give poor initial project briefs and fail to learn from projects at the end. There are three key measures that client organisations can undertake to improve outcomes in strat- egy consulting: 16

● Professionalise purchasing of consulting services . Instead of hiring consulting fi rms on the basis of personal relationships with key executives, as is often the case, professionalised purchasing can help ensure clear project briefs, a wide search for consulting suppliers, appropriate pricing, complementarity between different consulting projects and proper review at project-end. The German engineering company Siemens has professionalised its consult ancy purchasing, for example establishing a shortlist of just 10 preferred management consulting suppliers.

● Develop supervisory skills in order to manage portfolios of consulting projects. The German railway company Deutsche Bahn and automobile giant Daimler both have central project offi ces that control and coordinate all consulting projects throughout their com panies. As well as being involved in the initial purchasing decision, these offi ces can impose systematic governance structures on projects, with clear responsibilities and reporting processes, as well as review and formal assessment at project-end.

● Partner effectively with consultants to improve both effectiveness in carrying out the project and knowledge transfer at the end of it. Where possible, project teams should include a mix of consultants and managers from the client organisation, who can provide inside informa- tion, guide on internal politics and, sometimes, enhance credibility and receptiveness. As partners in the project, client managers retain knowledge and experience when the consul- tants have gone and can help in the implementation of recommendations.

15.2.5 Who to involve in strategy development?

This chapter has introduced a wide range of people who could potentially be involved in strat- egy: as well as the chief executive and the top management team, non-executive directors, strategic planners, strategic consultants and middle managers.

The general trend in recent years has been to include more people in the strategy process, moving towards more ‘open strategy’. 17 Openness comes in two dimensions. First, there is openness in terms of including more participants from different constituencies inside and even outside the organisation (e.g. middle managers and other staff internally, and key suppliers or partners externally). Second, openness can come in the form of greater trans parency about the strategy process itself, in other words what is revealed to both internal audiences such as staff and external audiences such as investors, partners and regulators. Openness is typically a matter of degree and rarely complete. There are pros and cons to greater openness. On the one hand, strategy can improve strategy formulation by accessing more ideas, and improve implementation by increasing key audiences’ understanding and commitment. On the other hand, openness to too many participants can slow down the strategy process and risks the leaking of commercially sensitive information to competitors. The transparency of the process will be dealt with later in this chapter under the heading of Communicating ( section 15.3.4 ). This section deals with who to actually include in making strategy.

There is no general rule about inclusion or exclusion in strategy making, but there are criteria that can guide managers. Research by McKinsey & Co. indicates that the people

M15_JOHN2552_10_SE_C15.indd 508M15_JOHN2552_10_SE_C15.indd 508 10/16/13 10:57 AM10/16/13 10:57 AM

Co py ri gh t © 2 01 3. P ea

rs on . Al l ri gh ts r es er ve d. M ay n ot

b e re pr od uc ed i n an y fo rm w it ho ut p er mi ss io n fr om t he p ub li sh er , ex ce pt f ai r us es p er mi tt ed u nd er U .S . or a pp li ca bl e

co py ri gh t la w.

EBSCO Publishing : eBook Collection (EBSCOhost) - printed on 12/25/2018 11:04 AM via AMERICAN PUBLIC UNIV SYSTEM AN: 1418653 ; Johnson, Gerry.; Exploring Strategy Text & Cases Account: s7348467

THE STRATEGISTS 509

ILLUSTRATION 15.2

The Barclays Jam

Barclays Bank used workgroups and ‘jamming’ to involve all its

employees in its new strategy.

In October 2011, Ashok Vaswani became CEO of

Barclays’ UK Retail and Business Bank. With 35,000

employees and 1,600 branches, Barclays is one of the

leading retail banks in the country. Like other UK banks,

it had been hit both by recession and by accusations

of mis-selling of financial products to consumers.

However, the global head of retail banking had

declared an ambition to make Barclays the ‘Go To’

bank for consumers, and Ashok set out at once to

make this happen.

Ashok launched two initiatives to involve employees

in the strategy. He immediately convened six

workgroups of graduate trainees and young man-

agers from around the country to address key issues

for the implementation of the strategy. With about

eight to ten members each, these workgroups were

tasked to work on strategic issues such as customers,

communications, colleagues and community. Working

in their spare time, and mostly communicating

virtually, these workgroups produced a flood of ideas,

some of them taken up even before the final report-

out. The formal reporting took place at a senior

management retreat in December, from which a new

strategic concept emerged: STAIRS, in other words

Speed, Transparency, Access, Information and

Results.

Ashok’s second initiative was the ‘Great Barclays

Jam’, launched in March 2012 in order to involve all

employees in the new STAIRS concept. Barclays called

on IBM’s jamming technology, an online collaboration

platform designed to facilitate communications and

debate among large groups of people. The launch of

the Jam was preceded by an intensive communica-

tions campaign. Ashok first ran a series of leadership

days for 400 of the company’s senior managers. A

‘teaser film’, voiced by a well-known British TV per-

sonality, was produced, promising employees the

chance to discuss the company’s future. Over 8,000

employees were invited to more than 70 information

events held at 16 cinemas across the country,

where they saw another specially produced film.

Further presentations were held in branches and call

centres to reach remaining employees.

With this build-up, the Great Barclays Jam finally

took place in March over three days. The Jam gave

every employee the chance to debate the practical

meaning of the STAIRS strategic concept and to

contribute ideas on how to deliver it. During the Jam,

there were live Question and Answer sessions with key

executives, including Ashok Vaswani and Bob

Diamond, the Barclays Group CEO at the time. Volunteers

from across all areas of the business facilitated the

discussion, based on the 30th floor of the Barclays

head office, easily accessible by the Group’s top

managers one floor above. The volunteers signposted

the most popular threads, highlighted top jammers and

alerted participants to senior manager contributions.

The Great Barclays Jam attracted 19,000 registered

participants, producing 20,000 comments over the

three days. Participants were equally divided between

managerial and non-managerial employees and reflected

the bank’s age distribution. Participation remained

high throughout all three days. In all, the Jam pro-

duced 650 distinct ideas for business improvement.

Ashok Vaswani instituted six new ‘Business Councils’

focused on various parts of the business with the

specific task to implement STAIRS and take forward

the most promising ideas from the Jam.

Sources : Interviews with Ashok Vaswani, Julian Davis and Tim Kiy at

Barclays, and Richard Mound at IBM.

Questions 1 What do you think were the direct and

indirect benefits of Ashok Vaswani’s initia-

tives to involve Barclays’ employees in the

strategy?

2 If you were a smaller company, without the

information technology resources of Barclays

and IBM, how might you be able to get

employee input into strategy development?

M15_JOHN2552_10_SE_C15.indd 509M15_JOHN2552_10_SE_C15.indd 509 10/16/13 10:57 AM10/16/13 10:57 AM

Co py ri gh t © 2 01 3. P ea

rs on . Al l ri gh ts r es er ve d. M ay n ot

b e re pr od uc ed i n an y fo rm w it ho ut p er mi ss io n fr om t he p ub li sh er , ex ce pt f ai r us es p er mi tt ed u nd er U .S . or a pp li ca bl e

co py ri gh t la w.

EBSCO Publishing : eBook Collection (EBSCOhost) - printed on 12/25/2018 11:04 AM via AMERICAN PUBLIC UNIV SYSTEM AN: 1418653 ; Johnson, Gerry.; Exploring Strategy Text & Cases Account: s7348467