Strategy = Execution
Scaling Requires a Modern Mindset in Change Management
Many change management schools of thought regard scaling and rollouts as cardinal sins. In their view, every employee is supposed to tackle their own process improvement. That may have worked once upon a time, but it won’t any longer. We need to see bottom-up change and the taboo on detailed, planned execution for what they are: outdated dogmas. It’s time for a more modern take on
strategy execution. I explain why in my book Strategy = Execution, where I discuss Scaling, Building Block 11.
Allow me to make a few caveats:
- Everyone is involved in both running the business and changing the business. So, everyone already contributes to executing and improving their job and the organization as a whole.
- In terms of changing the business, your role may not always be the same. Sometimes you play first fiddle and are involved from day one in the analysis and design; at other times, you play second fiddle and are asked to join in only in the execution phase.
- If you happen to play second fiddle, just do what you need to do. Refrain from trying to create elbow room for yourself. You can assess whether the first fiddle’s work is thorough enough and ask questions, but only ask questions to seek clarification. It’s not your job to cast doubt on everything and look for loopholes and wriggle room.
- Generally, professionals no longer accept the absence of a clear framework; they see this as a sign of negligent leadership. They get annoyed when someone claims to have “deliberately refrained from providing too much detail to leave room for interpretation,” while it’s clear to everyone in the room they simply haven’t done their job.
From continuous development to scaling
Building Block 11, Scaling, is quite different from continuing to develop your MVP: the new business process you developed with a small group of customers and employees now needs to be scaled to all customers and employees, and often to all vertical links in the supply chain, to business partners, as well. Hence, it’s time to take a look at scaling methods.
Base your choice of scaling method on the following variables: execution capacity, urgency, ambition and risk of reputation damage. These are the factors that determine how fast you can scale up, in which chunks, and in which organizational units. Figure 1 shows six archetypal scaling methods. You need to make an informed choice, and that always involves picking the lesser of two evils.
- The Big Bang method is what you go for when urgency and execution capacity, or change capacity, is high.
- The shock wave method is suitable when your execution capacity is mediocre or uncertain and there are big differences between the organizational units where the changes need to be rolled out.
- The exponential scale-up is the method to choose when the design’s potential risk or odds of success are unknown or when a lot has been left undecided and the prototype has to be concretized during execution. Depending on whether the prototype leads to positive results, the next increment can be bigger.
- The linear sequential method, or waterfall method, is appropriate when your execution capacity is low or very uncertain and there are great differences between the organizational units where the changes need to be implemented. Each organizational unit requires great dedication to the execution.
- The hybrid method is similar to the waterfall method, but is appropriate for situations of heightened urgency that require acceleration for critical parts of the prototype.
- The delicate method is the most appropriate method if your execution capacity is extremely low and your design has a high risk of reputation damage.
Balance
The devil is in the details. Once you start scaling your prototype with the help of your chosen method, you’ll find yourself programming activities in quite a linear way. What you’re trying to do is find the best balance among several variables that are all vying for priority treatment. And that’s okay. Let practice decide how to best apply theory.
In rollouts, “pull” works better than “push.” I have seen more than once that a geographically removed division asks why they are last in line, because they’ve heard such great things about the first results. That’s always a good sign. If you can do something about it by bumping this division up to a higher place, then do it. But if your hands are tied, you should carefully explain why this is the case.
Sometimes, the cohesion of an increment needs to be disrupted because the execution requires smaller chunks. Even if a rollout seems to be going perfectly, it may still be necessary to cut it up into smaller increments. Continue evaluating your chosen scaling method and change tack if need be. It’s not just the design that benefits from this approach of achieving small chunks and waves of execution. The approach itself is a learning process, too. The method you initially selected can be adapted along the way. Execution practice is your best teacher.
Depending on how fast and how well things go, you can speed up or slow down, or recombine several chunks into new waves.
Over the top? No!
Many people think the idea of cutting up execution into chunks is a bit over the top. My answer to them is: think again. Dividing your execution into manageable chunks is essential. Always. More than 60% of strategy execution fails, and one of the major factors contributing to this is the practice of rolling out too much, too fast. Obviously, there are always some “binary” issues, such as introducing a new top tier or changing the management and legal structure after a merger or acquisition. Compare it to being pregnant: you can’t be “sort of” pregnant. Either you are, or you aren’t. But most issues can be cut up. Hard-earned lessons from decades of strategy execution have shown that this is the most effective way of going about it. Iterative development in short cycles has become commonplace anyway, especially in radical innovation, as we have learned from Eric Ries’s Lean Startup model.
Let practice decide how to best apply theory
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