Leadership Spotlight

It was at the 2002 dedication of Jon M. Huntsman Hall that Vice President Dick Cheney said of his longtime friend: "In his creative gifts, in his business success, in his great philanthropy, in his human qualities, Jon stands in a class all of his own."

Huntsman views the Wharton School as the pre-eminent preparation for running global enterprises. It is inside this Wharton experience, he believes, that playing by the rules becomes a core element of training.

This duty to give back is the nucleus of Huntman's message in Winners Never Cheat. He has contempt for those who measure success by how much they make rather than how much they give away. But the duty to give is not just for the wealthy. Huntsman lets no one off the hook, insisting that philanthropy is not based on economic status.

It's Not Whether to Execute: It's How

Making Strategy Work: Leading Effective Execution and Change, Lawrence G. Hrebiniak

It's even tougher to execute strategy than to design it. And without effective execution, even the best strategies are worthless.

In 2002, when Larry Bossidy made these points in his best-seller Execution, they seemed revelatory. Three years later, the centrality of execution is so obvious it's nearly a cliché. But there's a big difference between talking about execution and actually improving it.

In Making Strategy Work, Wharton Professor of Management Lawrence Hrebiniak targets that gap. In place of anecdote and guesswork, he offers a disciplined, research-based process model for fully aligning your organization's skills, resources, and culture behind the strategies you define.

Strategy formulation and execution are even more interdependent than many managers realize, says Hrebiniak. Moreover, certain strategy flaws have especially serious implications for execution. One example: the failure to integrate enterprise strategy with strategy at the business or division level.

Consider the company that views one division as a mature cash cow, while that division has identified new opportunities for transforming itself back into a "star." The strategy mismatch leads to wars over resource allocation and performance metrics—and neither the enterprise nor the division executes successfully.

Hrebeniak's model doesn't just illuminate the ways corporate strategy should drive business strategy: it encompasses organizational structure, short-term operating objectives, incentives, controls, and more.

Drawing heavily on the recent Wharton Executive Education Survey, Hrebeniak notes that many companies still fail to structure themselves for effective execution. "Design or redesign efforts are handled badly... Integration or coordination of diverse structural units is poor or incomplete. The link to strategy when changing structure is unclear or often simply missing."

That link is, of course, crucial. Hrebiniak shows how cost leadership, product differentiation, diversification, and growth-oriented strategies each imply different choices about structure. Should you centralize or decentralize? Move towards "process" or "purpose"-based structures? Apply matrix management? While nobody works from a clean slate, his insights will be invaluable in evolving your organization alongside your strategies.

Having discussed how to define operating units, Hrebiniak turns to integrating and coordinating them. One key insight: the types of interdependence that exist amongst your units directly impact your ability to execute.

Consider the case of "reciprocal interdependence," where each unit or function can "change the rules," and even veto the actions of others. In such an environment, it's tough to achieve consensus amongst marketing, engineering, and production. If your strategy is built upon rapid introduction of new products, you'd better pay far greater attention to coordination. Hrebiniak offers detailed solutions—ways to clarify responsibilities and strengthen accountability.

Which brings us to the final element of his model: incentives and controls. Among the topics he covers: making sure you're incenting the right things, and using performance appraisals to support strategy, not undercut it.