~ 6 MIN READ
Strategy Execution: 5 Organizations That Have Done It Well
Planning and executing a new company strategy is challenging. Here are a handful of examples, from all different industries, to learn from.
Every organization must make a big strategy shift at some point or another to stay at the forefront of its industry. In some cases, a big strategic change may also be necessary to simply survive. Successfully shaping and executing a new strategy is challenging, but there are a few standout examples we can all learn from. Here are five companies with good strategy execution, coming from different markets and industry positions.
1. The City of Germantown, Tennessee
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.
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.
2. Best Buy
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:
- Reinvigorate the customer experience. Best Buy implemented a price-match policy, improved the online and in-store shopping experiences, offered free in-home technology consultations, and provided 24/7 customer tech support.
- Attract “transformational leaders” and energize employees. The company enhanced employee training, expanded employee benefits, provided paid time off for part-time workers, and offered backup child care.
- Work with vendors to innovate and drive value. The company invited leading technology brands to create their own in-store kiosks and established a groundbreaking partnership with Amazon to sell Amazon Fire TVs.
- Increase the company’s return on invested capital by growing revenue and efficiency. Best Buy shut down stores, exited geographic regions, and cut administrative and non-product costs.
- Make the world a better place through recycling efforts and giving people access to technology. Best Buy significantly reduced its carbon footprint and introduced the largest consumer electronics recycling program in the U.S.
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.
Is your strategy execution stalling? Learn how to make your organization's transformational strategy a reality in this step-by-step guide.
3. Origin Bank
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:
- Consolidating strategic priorities
- Aligning the vision and strategy
- Analyzing results with data—primarily, metrics tied to strategic outcomes
- Reviewing past performance and predicting future performance
- Gaining leadership buy-in
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:
- Offer the best technology stack to clients (even if it included competitor products) versus pushing standalone hardware sales.
- Tie employees’ pay to company performance (versus department performance).
- Consolidate marketing and branding efforts under one agency, instead of 40+ agencies.
- Standardize processes and reporting procedures for all internal functions and consolidate those activities in key centers.
- Divest low-growth, low-margin product lines and technologies (e.g. memory chips, printers, personal computers, etc.).
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.
5. Cobb EMC
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:
- 2014: The board of directors and senior leadership completed a SWOT analysis, using it to develop new strategic goals and update the company’s core values.
- 2015: Leadership reviewed the strategic goals and aligned them with company objectives. Cobb EMC also brought in a consulting group to complete another, more extensive SWOT analysis.
- 2017: Cobb EMC consolidated all strategy-related data, creating scorecards for goals at the department, division, and corporate levels.
- 2018: Newly appointed CEO Peter Heintzelman increased the company’s focus on project-based operations, dedicating resources to align department-level projects to organization-level strategies. The “Idea Machine” is introduced, allowing Cobb EMC staff to anonymously submit feedback and suggestions to leadership.
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. If you need help with strategy execution, check out our toolkit below.