In a recent article in The Financial Times, a consultant who advises strategy consultants on strategy (no, really, that’s what it said) informs us that the two buzzwords on every organization’s lips at the moment are strategy and execution. As our work on Valuing your Talent reaches its conclusion, I have to agree. From a talent perspective, organizational leaders absolutely understand how critical it is to have the right people and skills – or human capital – in place to successfully execute strategy. Fail on this critical juncture and you will never know whether your strategy was the right one or not. The plane will never leave the ground simply because there is no fuel in the tanks.
Interestingly, many companies I have been talking to are trying to combine the two: their strategy is to be better at execution. I have heard this from global leaders in banking, insurance, FMCGs, IT, retail, consulting, and the mobile phone industry. Ah, the mobile phone industry! Where do I start?
I am currently out of contract with my mobile phone provider. They have informed me that I am now entitled to an upgrade. I have been for some time but the demands of leading a major research project involving over 40 organizations, holding down a visiting professorship at Copenhagen Business School, not to mention teaching my students at Lancaster University Management School is keeping me busy in the triangle between Lancaster, Copenhagen and London, that has become my life.
We are all busy. Part of the reason why we are so busy is the 24:7 world enabled by the incredibly advanced technology of the telecommunications industry. And does the industry have a service level to match? I am afraid not. Nor am I alone in my thinking. The mobile industry is frequently pulled up for the opacity of its price plans by industry watchdogs and parliamentary investigations with pricing algorithms making the calculations behind big data look tiny.
The problem, though, turns on talent. More specifically, on the basis of my sorry customer experience, the industry simply does not have the skills in place to provide the service busy customers need. I spent two hours in a local store one Saturday morning, setting up new phones for my wife and daughters, not to mention my own, only to be told that I could not activate the upgrades because the company that has been acquired by the major firm whose shop I was now in was blocking my data’s safe passage. So much for big data: any data would have been a start!
The personnel were personable enough. Well turned out, full of mobile speak, which frankly meant nothing to me. Nevertheless, I placed both myself and my financial details completely in their hands; exactly where their leadership and strategy teams, not to mention shareholders, would want me to be. But not only did I leave without spending the several hundred pounds on new technology, nor the four figure sum in future service charges, but fifteen minutes later, when trying to use my original phone, it turns out that it, too, had been, well, executed; dead as a Dodo. It is business execution but not as we know it.
I could go on and share the wasted time on the (landline) phone trying to explain to several very nice but utterly hopeless staff why they would not be able to ring me when on the move with my family because, well, I did not have a mobile phone in operation. Am I the only person these days who carries just one phone? But this is not the point I want to make.
American strategy firm AT Kearney suggest the rate of growth in the number of mobile customers across the globe is set to halve (a CAGR 2012-2017 of 4.2% compared with a CAGR of 8.3% 2008-12). Welcome to the same world other, more mature industries are operating in. Top line growth is now giving way to an emphasis on securing margins. We have seen the shift to high value products in FMCGs and now in banking with the pursuit of high value customers. Additional value is carved out from an existing revenue stream. It is hardly rocket science.
Two phenomena arise out of tighter margins and ferocious competition on the high street. First, prices tend to converge, as anybody who has spent an unreasonable amount of their life ploughing through the different offers from mobile providers only to see they are largely ubiquitous will have learned. Second, if we cannot compete on price, competing on the ease with which it is to do business with you is an effective strategy, which brings us back to execution.
I have recently seen wonderful data charts exploring how mobile companies are exploring complex models to create high value customers from existing as well as new customers. Not a single stone is being left unturned in the mobile industry’s relentless pursuit of future revenues. All apart from one. If you want to compete on service, you require the right people, with the right skills in the right place at the right time. If you cannot execute on your talent strategy, it will not be long before the competition executes your market share, and with it your leadership team’s longevity.