Episode 31: Paul Leinwand
Listen to Episode on:
Watch the Unabridged Interview:
Order Books:
Coherence: Closing the Gap Between Strategy and Execution
Two-thirds of executives say their organizations are incapable of supporting their strategies. In this episode, Paul Leinwand, Adjunct Professor of Strategy at Northwestern's Kellogg School of Management and PWC Global Managing Director, talks about his book Strategy That Works. The author shed light on how successful companies like Lego and Ikea bridged the gap between strategy and execution.
Join Paul and Greg as they discuss how these ideas permeate actual execution within the company's culture. Paul shares with us how to apply this strategic perspective to an organization. Rather than working against the company culture, Paul shared how companies should shape it to suit their team’s needs. He talked about why and how a Chief Coherent Officer can help companies implement a consistent and accountable strategy across the organization.
Episode Quotes:
What is the concept of coherence, and how does it differ from the capabilities approach?
“Coherence is really the link between what you state to the world that your purpose is, what value you're going to create, and the capabilities you're building that deliver that value.
If you say I'm going to deliver at low prices, you might need some procurement capabilities and logistics capabilities that drive low cost. Then, the third element is your portfolio. So if I've got a set of products and services that don't really matter to that promise to the world, that's going to drive incoherence. Whereas if these three things are working together or regenerate a lot of coherence. So, if these things work well together —if I've got a clear value equation, if I've got a few capabilities —I can drive a lot of economic scale behind those capabilities and bring that scale to all the portfolios.”
Do you think this trend towards creating mission statements is a healthy one? Can formulating one help companies figure out a strategy?
“Employees alone, right, require an understanding of why they are there. How is my job connected to what this organization is doing, and what is this organization doing? If the organization can't define what it's doing, it's actually hard to bring that to me. But, people who go to work every day want to know how they're contributing. It doesn't necessarily mean it has to be a lofty goal. It just has to be tangible. I think too many organizations lack that, lacking an understanding of purpose. It isn't just a problem for the strategy. It's a problem when all the people who are required to transform the organization don't understand why they're there.”
Doing so many things at once runs the risk of losing coherence, what can you do to avoid that?
“We do see lots of organizations that have expanded in so many directions. And by the way, this is true for nonprofits, right? I mean, nonprofits, they're coherent. It's usually about, you know, “Do they have a clear mission?” But then are they delivering all their services? Or, what are they doing against that mission? Or, do they have donors, maybe that are pulling them in lots of different ways? Maybe great things, but that's not really core to what the purpose is all about.”
How do you close the gap between strategy and execution?
"This division between strategy and execution has a lot to do with how we think about those topics. As much as it is related to the people who are maybe doing the work —if we think about these as different topics, in other words —strategies about the future, about the direction and making choices. Execution is taking this strategy somehow and putting it in place. The strategy has to encompass not just direction, but what will it take to actually get that done?"
Show Links:
Guest's Profile:
His Work:
Beyond Digital: How Great Leaders Transform Their Organizations and Shape the Future
Strategy That Works: How Winning Companies Close the Strategy-to-Execution Gap
The Essential Advantage: How to Win with a Capabilities-Driven Strategy
Cut Costs, Grow Stronger : A Strategic Approach to What to Cut and What to Keep