Alexander Loudon has released another new book. In ‘The Execution Advantage’, the seasoned management consultant and author explains how organizations can successfully implement strategies. We spoke to Loudon about the book.
You have now written your third management book. What made you take up writing again?
“In my consultancy practice I see that many of my clients struggle with the implementation of their strategy. When I started researching this, I was shocked by the figures: 85% of organizations fail to achieve at least two-thirds of their strategic objectives.
“What do the 15% of organizations that succeed do differently? I started researching that and this has led to this book with recommendations.”
Why do things go wrong so often?
“Changes, such as the rise of generative AI, are happening at breakneck speed today and that requires a different approach to strategy. Decision-making must be faster and, above all, implementation must be faster. In addition, we also deal with many more stakeholders than just the shareholder.”
“In short, the traditional management books no longer apply. Such as the focus on shareholder value, which was promoted by former GE CEO Jack Welch, among others. Nowadays it is about value creation for all stakeholders – not just financial, but also sustainability, for example.”
What do you see as the biggest risk for companies?
“That continuous change requires a completely different approach to strategy. For example, short planning cycles, thinking big and taking small steps, giving autonomy instead of micromanaging and learning by doing.”
“Companies that are successful today, for example, think in quarters instead of years, have great ambitions and are focused on delivering the first results as quickly as possible, pass on mandates to teams as soon as objectives, scope and deliverables are clear, the teams receive a ‘license to deliver’.”
“If companies cannot embrace this new approach, they risk the continuity of their organization with possible negative consequences, such as loss of market share or reduced business results.”
What do companies that successfully convert their strategy into results do differently?
“Organizations that do succeed in effectively implementing their strategy put their people first. After all, strategy is people work. People are not rational, have limited ability to deal with complexity and are sensitive to peer pressure, for example.”
“They recognize that every organization is unique and choose a strategy execution that is appropriate for their organization and that they continuously improve based on learning by doing and inspiration from outside. Mutual cooperation is an important part of this, for example paying attention to team effectiveness.”
What does successful strategy execution yield?
“Being successful in the implementation of your strategy means that you can achieve more strategic goals faster and better. This leads to better financial performance. BCG research shows a positive correlation between strategy execution performance and financial performance.”
“In addition, good strategy execution leads to more involvement and focus among employees. This in turn leads to a reduction in work-related stress. In a tight labor market, this is a not unimportant additional benefit.”
“In short, I see plenty of opportunities to turn strategy execution into your competitive advantage! Not to mention the fact that this makes strategy fun again – it doesn’t have to be a dusty and energy-consuming exercise.”
Which companies fulfill an exemplary role for you in this area?
“A good example is Hema. CEO Saskia Egas Reparaz has consciously chosen to invest in good cooperation in her approach to strategy execution. For example, she combined developing the strategy with family constellations. An unconventional way to build understanding and trust in the management team.”
“Her approach to investing in good cooperation is not without results; in the first two years, Hema has been able to make progress on various strategic priorities such as online sales, and is once again seeing the black figures.”
What three strategy execution tips do you have for our readers?
“The book is really a practical guide with many how-to’s, checklists and tips. But here are my most important tips for leaders. First: involve the people who have to implement the strategy in the development of the strategy. This provides valuable input from practice and increases the chance of acceptance and therefore a flying start to implementation.”
“Second, make real choices and stick to them along the way. If you can’t write down what you’re not going to do, it usually means that you haven’t made any real choices (yet).
“Third, as a leader, don’t disappear once the plans are completed. Regularly discuss progress and communicate about the what, why and how of the strategy – in an energetic and inspiring way, of course.”
Do you have practical examples of this?
“Of course! Installation company Breman allowed employees to vote twice on the strategy, on the ambition and strategic choices, which increased their involvement and support. An important part of Burberry’s successful turnaround under the leadership of then CEO Angela Ahrendts was a number of clear strategic choices that were closely adhered to throughout the implementation.”
“At the Reykjavik Energy Group, the largest supplier of electricity, heating and water in Iceland, CEO Bjarni Bjarnason ensures that he meets all 542 employees, per group of 20, to discuss the strategy with them. This approach effectively engages employees and creates a sense of purpose and direction.”
What did you personally learn from writing this book?
“Writing in addition to my consultancy work and a family with three young children, one of whom also needs a little more attention, was quite tough. There were moments along the way when I was completely done with it.”
“However, it has also given me many insights and depth about what putting people at the center of strategy execution actually means. Such as the timing: there is energy and momentum for a change. Without that you can push whatever you want and nothing will happen. To a certain extent, this also applies at home and that insight also helps me to be a better parent.”
Can we expect another book from you in the future?
“Of course! My head is already full of ideas, but I have promised at home that for the time being I will spend my free time doing other things than writing a book.”
About Alexander Loudon
Alexander Loudon is an international strategy consultant working for clients across a range of industries including Arla Foods, Korn Ferry, TotalEnergies and Vodafone. He specializes in strategy execution. His previous two management books have been published in multiple languages.