Is Your Workforce Good Enough to Execute the Business Strategy?
It's a bit of a spoiler, but yes, your workforce is good enough to execute your business strategy. However, there's a pretty good chance that it won't. In a joint American Management Association (AMA)/i4cp study, strategy development was found to be a top-five competency in leadership development programs at high-performance organizations (HPOs). The fact that strategy development ranks so high means that HPOs are separating themselves from middle and low performing companies by virtue of their focus on this competency, and that there is a very good chance this competency is lacking across a very large amount of companies.
Perhaps it is no surprise then, to learn that having a clear and well thought out strategy is 2.5x more likely to occur at HPOs than at low-performing companies (LPOs). As one of the 25 KPIs that correlates to high market performance--according to The People-Profit Chain™ from i4cp--strategy is dependent on internal and external variables and is often the culprit in corporate failures, not the workforce itself. The positive side of this news is that the problems in a strategy and plan are much easier to address than systemic problems within the workforce.
Strategy in actionFor a current case example of strategy implementation, let us look at Pep Boys, an automotive parts and service company that has been around since 1921. After an unexpected quarterly net loss, Pep Boys' CEO, Mike Odell resigned in September of 2014--during a major restructuring of the organization that hinges on the "Road Ahead" strategic plan, which addresses a perceived shift in Pep Boys' market. As the customer base shifts from a DIY mentality (either because of improving economic conditions or more complicated vehicles), the central focus of Pep Boys' business must shift as well, which is what the "Road Ahead" strategy attempts to address. This entails not only rebranding, but also restructuring its physical locations, and most tellingly, implementing a massive employee retraining program that focuses on the "cycle of service."
The physical changes to the stores alone could take four months to complete, and no timeframe is yet available on when the employee retraining is expected to finish. However, from last month's sudden resignation, it appears that Pep Boys is expecting the strategy to have a more sudden impact. Time will tell how successful Pep Boys will be in its strategy execution, but a paraphrased CEO quote from long ago comes to mind:
It isn't the lack of a strategy that causes me to lose sleep, but rather the organization's inability to execute against that strategy.
Strategy is one of the five Domains that comprise The People-Profit Chain™ performance improvement model. Download a complimentary copy of the report for access to the other four Domains.