Pharmaceutical Executive Europe - May 2008 - (Page 14)

14 Corporate Strategy May 2008 Pharmaceutical Executive Europe Use Your Strategic Discretion Discretionary tasks are key to ensuring the strategic goals you set in the boardroom are actually scored, says Dr Brian Smith. N aïve leaders and management textbooks see strategy implementation the same way. The bosses decide where time and money will be spent and their subordinates do it. In theory, there is no difference between the intended strategy and the realised strategy. Except, of course, that isn’t the way the world works, and the gap between strategic intent and implementation reality vary from 50% to 90%. It is this problem that a new research project at Europe’s largest business school is trying to understand. The implementation gap is not new, nor has it been neglected by managers and academics. Most approaches to it see it as a command and control issue. “What gets measured gets done” is the mantra of this school of thought, exemplified by Kaplan and Norton’s balanced scorecard and strategy maps. Our research, however, points to a more subtle aetiology of implementation failure and is beginning to suggest some more effective cures. Human factors At the core of implementation is, of course, human activity. Every strategic decision, large or small, moves from plan to doing as the result of what some human action. But these actions differ greatly in their discretionary content. Some strategic directions (for instance, increase the size of the sales force by 10%) offer the implementers little room for discretion as the action can be measured, timed and rewarded or punished accordingly. Other actions though are much less quantifiable. The time, energy and thought put into recruiting the sales team, or the alacrity with which that team goes after new target customers, or the creativity with which a business intelligence analyst looks at the market are all much harder to judge in an quantifiable manner. Such high-discretion tasks form the majority of strategy implementation in knowledge-based industries like pharmaceuticals. Any one who has set management objectives for their team knows the difficulty of doing so in a way that is both measurable and reflects the reality of the job. Too often, this process ends with a catch-all task along the lines of “other activity commensurate with the role.” It is the management of these discretionary tasks that, in our research, seems to emerge as critical in ensuring the strategies happen as intended. Done correctly, implementers follow the strategy with persistence and energy, even learning new ways to solve unforeseen problems. Done badly, implementers at best go through the motions and at worst actively subvert their leaders’ strategy. The frequency of the latter and the ingenuity of strategy saboteurs is both striking and strangely impressive. More practically useful, however, are the lessons from firms that close the implementation gap. These relate to the ways that strategy makers set goals for strategy implementers and can be grouped into three categories: goal decomposition, goal commitment and goal management. Broken goals Strategy implementation begins with the decomposition of high-level goals into cascades of lower level objectives. On the surface, this seems a straightforward, almost arithmetic task and therein lies the problem. Common practice is to break-down quantified targets into sub-targets (Region to country to district, for example). This has the merit of being easy and, best of all, measurable. But like many Digital Zoo/Getty Images http://www.balancedscorecard.org/BSCResources/AbouttheBalancedScorecard/tabid/55/Default.aspx http://www.balancedscorecard.org/BSCResources/AbouttheBalancedScorecard/tabid/55/Default.aspx

Table of Contents for the Digital Edition of Pharmaceutical Executive Europe - May 2008

Pharmaceutical Executive Europe - May 2008
Contents
From the Editor
News and Analysis
Calendar
Rising in the East
Use Your Strategic Discretion
A Blueprint for Success
Market Access and the Patient
Activating Effective Product Differentiation
What Doctors Want
IC Success in Four Steps

Pharmaceutical Executive Europe - May 2008