Strategy = Execution

Strategy Equals Execution Truer Than Ever in Times of Hyper Crisis

In this blog Turner's Jacques Pijl is giving recommendations for strategy-execution in this extraordinary crisis.

Strategy Execution triggered by the coronavirus crisis is—literally—Hyper Strategy Execution. Organizations of all sizes need to act timely and calmly to ensure continuity, whatever it takes.[i]

I’m deeply impressed by the speed, energy and creativity so many are showing in the face of this challenge, despite the strict—and sometimes even draconian—measures the authorities have understandably imposed. Our hope is that when things eventually get back to normal, this innovative capacity will endure. Until then, most industries are coping with a crisis of unprecedented proportions.

Anyone writing about the coronavirus crisis should critically ask themselves whether their contribution adds value to the ocean of facts and opinions out there. This past week, I have been deluged by questions and remarks about strategy execution. In times like these, our adage ‘Strategy Equals Execution’ is truer than ever. Therefore, I’d like to share 10 principles and several examples—best practices—of Hyper Execution that have been demonstrated over the past few weeks (which have felt like months, by the way). This is a list of best practices executed by you, your people and your organizations, in the public and private sectors.

Which means that this post is meant to celebrate you, the people responding to this crisis in the best ways possible. This analysis is, of course, based on Turner’s consulting experience and represents our own views. We have categorized our observations according to the applicable elements of Strategy = Execution.

[i] See FD: Draghi redde de euro, Lagarde zet die nu weer op het spel, fd.nl/opinie/1337976/draghi-redde-de-euro-lagarde-zet-die-nu-weer-op-het-spel

1. The all-time No. 1 in any crisis: manage cash flow and reduce cost

  1. “Flatten the curve, not your business,” someone wrote. The backbone of successful crisis management is safeguarding continuity by means of cash management and timely cost reduction. It’s simple: in a crisis, your sales drop and that reduces your cash flow and your ability to keep operations going. Healthy organizations have sound ratios and buffers, giving them time to change their strategy rather than wait for things to get back to normal. Radical change also costs time and money. The greatest danger is to focus solely on sales and innovation. That’s indispensable anyway. Now is a time to do both, cut and spend. This is a time for making razor-sharp choices about what every cent and minute should be spent on[i][ii].

[i] hbr.org/2019/05/how-to-survive-a-recession-and-thrive-afterward?utm_source=linkedin&utm_medium=social&utm_campaign=hbr

[ii] www.mckinsey.com/business-functions/strategy-and-corporate-finance/our-insights/ten-tips-for-leading-companies-out-of-crisis

2. Redefine crisis management (meet an unprecedented crisis with an unprecedented response)

  1. I’ve been discussing the situation with several private and public sector clients. As a result of the crisis, some organizations have seen a 70 to 100% drop in sales in most divisions and business units over the past two weeks. Let that sink in for a minute. Clearly, regular contingency and crisis management is not going to suffice (and yes, ‘regular’ crisis management is an oxymoron). Waiting for this storm to ‘blow over’ is not an option.
  2. One board member I talked to said he was scared out of his wits when his fellow board members calmly suggested reinstating their 2008 crisis plan. That was no small crisis, but this one is potentially far more serious. No one knows for sure, but the only right approach is to hope for the best and plan for the worst. An unprecedented crisis requires unprecedented action.
  3. ‘Running the business’ and ‘Changing the business’ now have to be run by the same team. However, the difference between the two remains relevant. While the store needs to be minded, it also needs to be adapted, and fast. Note that the priorities for Changing the business have to be rearranged drastically: the focus should be on necessary innovation and cost containment.

3. Instant Crisis Execution Coalitions (CECs)

To achieve your critical crisis management objectives, you need effective coalitions of people whose feet are all firmly planted in reality and who have skin in the game. These Execution Coalitions must cut through any existing structures with a scope that encapsulates the entire ecosystem.

4. Common sense instead of urgency or excitement

  1. For the time being, utility and necessity are the same. Make use of this.
  2. Put all options on the table. You might have to consider retracting the wage increase you just promised for 2020. By the same token, the idea of restricting and postponing dividends can no longer be taboo. 
  3. As one client told me, “the honeymoon of this crisis is over; we have no time to wallow.” Organizations that were hit hard had less than a week to go through every stage of grief[i].

[i] Psychiater Elisabeth Kübler-Ross (2006) described the five stages of grief: denial, anger, bargaining, depression and acceptance

5. Direct and decide: Execute, don’t debate

  1. Know your position, your options and the possible scenarios. Uncertainty and the unknown rule. Face it. As Dutch Prime Minister Mark Rutte aptly put it, “it’s having 50% of the information you need to make 100% of your decisions.”
  2. Pause. What are the facts? What do the best possible conservative and realistic prognoses look like? Don’t allow any poisonous ideas to be floated in the prognosis or the pipeline. Opportunism is unethical at this point. Forecast your sales, cost, margin and cash flow. What government measures have been announced? Can you apply for them already, when will they affect your liquidity, and to what extent? Will this aid be structural or one-off? What measures can you take to cut costs and preserve liquidity? Make those calculations for every level and ASAP. What is your deadline?
  3. Decision-making = execution. There is no time or need to debate decisions. As leaders, we’re prepared for execution. That’s the case under normal circumstances too, but now it’s abundantly clear.
  4. A week seems to last three months. Therefore, step up the frequency of your evaluations to once a week and categorize the issues you’re faced with in ‘in-trays’: Tray No. 1 represents anything that demands your immediate attention. Tray No. 2 is urgent: must be researched, decided and put into action quickly. Tray No. 3 represents issues that need further exploration and preparation for decision-making in either Tray 1 or 2. Tray No. 4 contains any other issue on the longlist for the other three trays.
  5. Keep your eye not only on the ball, but also on the field. Make short-term decisions based on the best possible picture of how they contribute to your long-term strategy and innovation. But make sure your longer-term appraising doesn’t lead to paralysis.

6. Instant innovation and dual-tracking

  1. Suddenly, every process has to be digitalized in days, or even hours. This is impossible to achieve in your existing organization and consultation infrastructure. Set up a (dual-track) team with executive powers immediately. Do it within 24 hours.
  2. Everything needs to be digital. This is your point of departure, and there need to be good reasons for making an exception. As one international change and program manager told me, she was already doing all execution processes remotely and digitally before the crisis. Even kick-offs with new people. At Turner, we’ve been working on e-change (see seca.nu/) for a long time and now we’re redoubling our efforts.
  3. The success factor is radically changing the paradigm and making digital the norm. Everything is digital, barring exceptions. That’s the only way to get everyone who’s not yet used to this way of working on board. So, no gradual, linear change and no neither-fish-nor-fowl approach.

7. Execution in 72-hour blocks

Modern strategy execution is implemented in blocks, in 6 to 8-week waves. Now, these need to be shortened to 72 hours. Spend 80% of your time on executing these ultra-short blocks, not on discussing the implications of the way you’re handling the crisis.

8. Responsibility and freedom

  1. It’s incredible how people are responding to this crisis. That’s how most of the senior managers I talked to last week feel. Like me, they’re amazed by the resilience we’re seeing from individuals and organizations.
  2. At the same time, we’ve heard: ‘Highly educated professionals, and particularly those of Dutch origin, agree that we need all those interventions, yet consider themselves the exception to the rule’. Let’s call each other out on this.

9. Crisis leadership? Too much cheering is a bad sign

  1. We all know there are fair-weather captains. Adjust your leadership. Intervening is as simple as it is hard: it is by definition better to do too much too early than too little too late. This is true both for opportunities in sales and innovation, and for threats in the areas of cost and cash flow.
  2. Stay in your assigned leadership roles. Don’t start doing everything with everyone. But also, don’t be too rigid: talk to each other openly and often.
  3. Don’t be lulled to sleep by ‘unflappable’ leaders. The first mistake you can make in any crisis—and particularly in this one—is to stay calm and wait too long, to the point where you’ve lost the space to act[I].  In every crisis I’ve experienced, that’s the mistake that caused the most damage.
  4. Never mind if people label you ‘panic-stricken’. Panic is an overused term anyway. It’s often wrongfully applied to timely management decisions that are not based on certainty, but on a comparison of scenarios and a choice for the course of action that best guarantees the organization’s continuity. It’s all about deliberate calm and bounded optimism[II].
  5. The mother of all priorities: have empathy when you have to let people go. Keep a cool head and a warm heart.
  6. Ethics comes first. Employees will consider you as reliable as your behavior in a crisis. This is not to say that they should like your interventions. That’s a different matter altogether.
  7. Keep communications simple. That’s a ground rule anyway, but one that’s paramount now. You want everyone to be on the same page, especially about the essentials.
  8. Cut out all drivel, enough’s enough! As of last week, any old-fashioned ‘change management chit chat’ and whining about the need for more bottom-up participation has become a thing of the past. This has once and for all been relegated to the realm of drivel. Another positive side effect of this crisis: finally, the much-maligned open-plan office can now also be abolished. A great way to finally get rid of the 10 to 20% loss of productivity open-plan offices are said to cause.

[I] See: Niall Ferguson, ‘De eerste fout bij de corona-uitbraak was kalm blijven’, fd.nl/economie-politiek/1338132/de-eerste-fout-bij-de-corona-uitbraak-was-kalm-blijven

[II] www.mckinsey.com/business-functions/organization/our-insights/leadership-in-a-crisis-responding-to-the-coronavirus-outbreak-and-future-challenges

10. Reinventing the wheel ‘on the go’? Now is not the time!

  1. I started this series of 10 best practices with the all-time No. 1 of crisis management. But there are more ‘classics’. The basics of crisis management remain important. You don’t want to waste your time reinventing the wheel in times of crisis. So, assign someone to refresh your collective memory for 72 hours. There are more than enough sources, including very recent ones, see endnote[i].

[i] See these practical sources, for example:

  1. www.inc.com/bruce-condit/7-critical-steps-to-crisis-management.html
  2. hbr.org/2020/03/build-your-resiliency-in-the-face-of-a-crisis
  3. www.nfx.com/post/28-moves-survive-thrive-downturn/
  4. hbr.org/2020/03/coping-with-fatigue-fear-and-panic-during-a-crisis?utm_source=linkedin&utm_campaign=hbr&utm_medium=social
  5. hbr.org/2020/01/what-organizations-need-to-survive-a-pandemic?utm_source=linkedin&utm_medium=social&utm_campaign=hbr
  6. hbr.org/2020/03/slow-down-to-make-better-decisions-in-a-crisis?utm_campaign=hbr&utm_medium=social&utm_source=linkedin
  7. www.tiggelaar.nl/leiderschap-in-tijden-van-corona/
  8. www.mckinsey.com/business-functions/organization/our-insights/leadership-in-a-crisis-responding-to-the-coronavirus-outbreak-and-future-challenges
  9. fd.nl/opinie/1337866/de-crisisreflex-van-leiders-te-veel-sturing-en-te-weinig-vertrouwen
  10. fd.nl/achtergrond/1338084/vijf-tips-die-de-kapitein-door-de-coronastorm-kunnen-loodsen

 

And these scholarly sources: www.sciencedirect.com/topics/nursing-and-health-professions/crisis-management

I have a request: please send me your examples. Now, more than ever, I want to collect, analyze and apply what works. The more specific, the better. To get you started, I will give a few examples below. I’d like to thank our customers and the Turner professionals for their input. And to conclude, I’d like to say: these are strange times. My son Nathan told me about a video chat between his teacher and a classmate. The teacher said, “You’re late, go report to the principle, digitally.” The classmate replied, “But sir, I didn’t know what classroom I had to be in.” Humor is a serious business. I’m glad that people keep sharing jokes on social media in these dark times. Let’s take good care of ourselves and others.

Strategy = Execution. Improve, Renew and Innovate Faster

How can organizations make strategy execution their number one priority? And improve, renew and innovate faster? This I describe in my book Strategy = Execution. Strategy = execution is based on the research that Turner started years ago into the success factors of strategy execution and innovation. We interviewed 60 directors and professionals and analyzed more than 75 cases, 300 relevant books and articles.

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