auditorium - DEKRA Certification

COLUMNActionor just finewords?Awkward questions from Ulrich Grothe – Part 3. Strategies are often developedat great expense, but are then seldom implemented successfully. Why? The writersees the main challenges at precisely the points where the consultants normallyleave the companies to their own devices after presenting their fine-soundingstrategic approaches.At which points docompanies’ strategicreorientations fail?The problem is evident: managers andconsultants are far too concerned withdeveloping strategies. They need to shifttheir focus to implementation. A surveycarried out by MAB Consulting St. Gallendiscovered that just 30 percent of allstrategy ideas are put into practice – andonly a few of these successfully.The author:Ulrich Grothe is a partner of MABConsulting St. Gallen, Director of theInstitute for Strategic Managementat the Boston Business School andlecturer in the St. Gallen ManagementProgramme. He advises well-knowncompanies on corporate strategyand innovation management.Contact:grothe@mab-consulting.chThe reason is that new strategies onlyyield a competitive advantage if theygenuinely help to distinguish a companyfrom its rivals. The traditional methodof doing business within a particularsector often needs to be abandoned infavour of a new approach. For establishedproviders this quite often involves painfuldecisions. Not recognising the full implicationsof the new approach until later,many companies lose heart half wayalong the road.What are successfulimplementers doingdifferently?An example: Bertelsmann was far too halfheartedin its move to sell books via theInternet. BOL, Bertelsmann’s Internetbookstore, was competing with the company’sown clubs to sell the books. Amazonexploited this timidity. Bertelsmann,by contrast, is now writing down lossesrunning into the hundreds of millions.Similarly, the major computer manufacturersshrank from radically restructuringtheir sales organisations. This then madeit childsplay for Dell to assume marketleadership.Rapid and short-lived changes of strategyand management usually follow hard onthe heels of a half-hearted strategy implementation:Grundig, Swiss, ABB, Opel– the list goes on and on. If, on the otherhand, you compare the successful implementerswith traditional operators,the former understand the importanceof focussing all their energies on a cleartarget. Ryanair, for instance, has enjoyedgreat success by dispensing with in-flightcatering, customer loyalty systems, seatreservation, connecting flights etc. By contrast,anyone looking for an incomparableflight experience should try Virgin Atlantic.They show that it is also possible tobe successful in the high-priced segment.What are thedecisive aspects of theimplementation?An implementation system was developedin St. Gallen bearing the survey resultsmentioned above in mind. Taking thechosen strategy as its basis, this assesseswhether all the company’s activities –right down to individual employees – arepulling in the same direction, i.e. towardsthe joint target. The bitter reality in dailypractice: the overall strategy might wellbe clearly defined, yet the functionalstrategies have already started to take ona life of their own and, at the departmentalor employee level, there are scarcelyany direct links to the overriding strategy.This deficiency needs to be remediedsystematically and decisively.A call for actionSee it through from beginning to end.You can save the large sums of money youintend to spend on strategy consultantsif you are not prepared to turn yourcompany’s organisation upside down ifnecessary! Only companies which areprepared to implement a good strategyright down the line are best placed forsuccess.