EFFECTIVE STRATEGY EXECUTION

Effective Strategy Execution in a Middle East public sector environment

Effective Strategy Execution in a Middle East public sector environment

Introduction

In the IBM 2006 Global CEO Study, which was based on interviews conducted with 765 corporate and public sector leaders worldwide, 65 percent of leaders anticipated fundamental change in their industries in the next two years. As a strategic response, many CEOs are innovating in operations and/or products and services. But firms that were financial out performers put twice as much emphasis on business model innovation as underperformers (see Exhibit 1). As one CEO told us, “Products and services can be copied; the business model is the differentiator”.

But what exactly does the term business model innovation encompass? And what type yields the best results? To find answers, we first identified three main types of business model innovation, which can be used alone or in combination: innovations in industry models, in revenue models and in enterprise models. We then compared these three types of business model innovation across 35 best practice cases. A key finding was that each type of business model innovation, with the right strategy and strong execution, can generate success.

Another important finding was that innovations in enterprise models that focus on network plays (i.e. external collaboration and partnerships) seem to be the most common, with 15 of the 35 cases we studied, or almost half, using this type of business model innovation. Moreover, we found that companies using network plays realized similar financial results as companies that used other strategies. We also found that while network plays are being used by diverse companies in different industries and regions and of varying age, size and other characteristics; this tactic has been a particularly useful strategy for older companies.

Purpose of the Study

The purpose of this paper is to find out what exactly the term business model innovation encompasses and what type yields the best results.

Aims of Research

The aim of research can be summarized as follows:

1)    Poor Strategy planning capabilities

2)    Failure to cascade strategy into the organization (linking it to day-to-day operations)

3)    Lack of effective communications and stakeholder management

4)    Lack of leadership in driving strategy execution

5)    Non existence of proper strategy execution management program

Literature Review

Because business leaders interviewed had difficulty defining business model innovation, we developed a framework that identified three main types. This framework is based on our experience, an extensive literature review and an analysis of our 35 best practice cases plus a scan of over a dozen others.

Industry model: This approach involves innovating the “industry value chain.” This can be accomplished via horizontal moves into new industries as Virgin has done with its moves from its beginnings in music and retail into such diverse industries as airlines, railways, beverages, financial services, etc., thus leveraging its superior skills in consumer management. It can also be accomplished by redefining existing industries as Dell has done by eliminating intermediaries and going directly to customers and as Apple has done by delivering music directly to customers via ...