Planning and executing a new company strategy is challenging.
The City of Germantown took a unique approach to strategy planning and execution because it chose to follow a corporate framework versus a more traditional local government model. The city views its citizens as customers, staff as teams, and operations as goods and services.
This shift in thinking came about in 2015 after city administrators read the book, “We Don’t Make Widgets: Overcoming the Myths that Keep Government from Radically Improving.” The general idea is to build and execute a strategy around what citizens want, focusing on outcomes. For example, citizens don’t want a bigger police force; they want whatever ensures a safe community and low crime rate.
The city’s first step in taking a “for-profit” approach to organizational strategy was to create the “Germantown Forward 2030” vision. The 2030 vision was built over a methodical, one-year process by a 30-person steering committee and incorporated input from more than 200 citizens. Once the vision was finalized, a citizen task force created a measurable, actionable strategic plan with objectives, projects, and performance measures. Every quarter, Germantown’s city administrator meets with department directors to review progress and results, which are then shared publicly with citizens via a community dashboard. Strategic planning isn't always easy, but the City found great ways to overcome the biggest pain points in the process to achieve success.
Over the past four years, Germantown has seen success with this approach to strategic planning and execution. The city operates more efficiently and cost effectively, and there is greater transparency both internally and externally on goal progress. The results have been so positive that Germantown won a 2019 Malcolm Baldrige National Quality Award from the U.S. Department of Commerce. The city is one of only four municipalities nationwide to have ever earned this presidential-level honor, which is the highest level of recognition for performance excellence that a U.S. organization can receive.
Best Buy is an ideal example of a company that completely reinvented itself and found the secrets to successful strategy execution. In 2012, Best Buy had plummeting profits, sales, and stock prices. It had lost relevance and was failing to compete with Amazon.
In a last-ditch effort to survive, the company hired Hubert Joly as its CEO. Joly proved to be a visionary leader, most notably for launching Best Buy’s Renew Blue transformation strategy. Here are the five key goals of the strategy, including some of the most successfully executed initiatives for each:
The Renew Blue strategy planning and execution has been an unheralded success. When Joly transitioned from CEO to executive chairman in June 2019, Best Buy had five consecutive years of comparable sales growth, increased its non-GAAP operating income rate, achieved $1.9 billion in cost savings and efficiencies, improved profitability and shareholder return, increased its Net Promoter Score, and hit record-low employee turnover rates.
In 2017, Origin Bank realized it was losing traction in the market and wasn’t keeping up with the banking industry’s pace of innovation. The bank decided to completely scrap its strategic plan and start fresh with a new strategy that focused on:
Using these guidelines, Origin Bank began its strategy execution process by whiteboarding its high-level goals. From there, it became a “waterfall” approach where goals were broken down into objectives, objectives divided into projects, and projects into action items. Origin Bank also developed measures to track progress for each of those waterfall elements.
Companies with good strategy execution always take this next step, too: developing a reporting process to consistently monitor and evaluate performance. Origin Bank established three meetings, each with a distinct purpose, to be held each quarter. The focus of the meetings ranges from a general performance overview of the strategy to detailed “red alerts” indicating where strategic elements are off track. Every quarter at the conclusion of the meetings, proposed changes to the strategy are presented to Origin Bank’s board of directors for approval.
Changing its strategy has helped Origin Bank increase its profits and customer service levels. Overall, the bank has been able to take an innovative approach to its operations with a strategic plan that reflects its vision, includes more accountability and collaboration, centralizes project management, and requires all changes to be vetted through a “decision tree.”
In the 1980s, IBM was the dominant technology brand, with sky-high revenue and market share. But the company failed to evolve along with customers’ computing needs, and it became siloed and dependent on hardware sales. IBM’s power position eroded over the next decade, culminating with the announcement of an $8 billion second-quarter loss in 1993 (the largest in corporate America’s history at the time).
Louis Gerstner, brought on as IBM’s CEO in 1993, led the company’s transformational shift from products to services. In essence, IBM changed its strategy from being a multinational technology provider to a holistic, shared-services partner. Core elements of the strategy were to:
IBM’s new strategy worked and is hailed as one of the greatest corporate turnarounds of all time. IBM quickly proved that the services business was more viable than hardware product sales, successfully diversifying its offerings and investing in strategic growth areas. During Gerstner’s tenure from 1993-2001, the company increased its income from $3 billion to $7.7 billion, revenue from $64 billion to $86 billion, and stock market value to $180 billion.
Cobb EMC, a not-for-profit electric cooperative, made a distinct strategy shift in 2014 after consistently underperforming and failing to achieve key goals. There was a lack of alignment across the organization, with no clarity on whether they were making progress on the strategy and aligning departments to corporate results.
Cobb EMC deliberately and thoughtfully formed a new strategy that would play out over the next few years:
Taking these steps to create a new strategy was hugely beneficial to Cobb EMC. The company had centralized, real-time data for the first time and created its first three-year strategic plan that closely aligned departmental projects and corporate goals. Within two years of executing its plan, Cobb EMC was able to uncover new operational efficiencies and cost savings: The company saved $8 million through restructuring, lowered utility rates by $5 million for its customers, and gave $1.3 million to charity. Additionally, Cobb EMC was able to increase staff morale levels throughout these significant changes.
Whether the goal is to stay at the front of the pack or avoid extinction, strategy shifts are critical for organizations in every industry. As you’ve read in this article, this process can take many forms—what’s most important is that you execute on the new strategy you carefully created.