Hello everyone, and welcome to this module on strategy execution. For most of this course, you've been focusing on the formulation of strategy, analyzing business environments and looking at different competitive strategies. In this module, we're going to take a little different approach it's not so much on formulating or creating strategy. But actually making it happen, executing and driving the performance of the firm through the kinds of ways that we design the organization and manage the people in it. As we go through this module, think about a couple of things related to strategy execution. We're going to find out that many organizations struggle, when it comes to strategy execution. And it turns out to be a differentiator for those who succeed in their industries versus those who have a little more difficult time. So why is that? Think about those issues, what's driving these challenges with regard to execution? And how can we analyze the process to look at the critical drivers? What matters most? There's no shortage of things that we want to look at, that influence the firm's ability to execute. But we want to find that precious few that make the biggest difference. And the third is why do companies that really have an approach achieve that kind of success? What's the key to it? What works best for them? It's not so much that we're going to to find best practice that works for everyone. But try to understand what might works for your organization and what would represent the keys to driving success in your firm. The objectives that we have at the end of this module, we want you to be able to do a couple of things. First of all, evaluate and determine what's required for success in strategy execution. Look at those different kinds of things that make the biggest difference. I think we could probably find dozens of things that have an impact, but which ones are the most critical. And then taking that, let's try to diagnose the underlying causes for why companies struggle. Where do the hurdles occur and the stumbling blocks? And diagnose those in your own organization because at the end of the day, what we want to do is identify the most critical interventions. The things that keep the company on track and the practices that drive breakthrough performance. Now, let's start with an example of a company that I think probably all of you know very well. Nissan Motors a very, very respected company, really one of the best in the industry. But for many years Nissan struggled. In fact from the 1970s, which was the top of the market share for them, they had 25 years of declining performance. They were losing market share, they were mounting debt and their performance was really suffering. And by the 1990s, they call that the lost decade, where Nissan had really lost its way. Now what's interesting about this, is it there was a succession of three CEOs that tried to turn around the business. And they were doing very normal kinds of things that would be needed. They're trying to focus on efficiency, eliminate debt, increase the life cycle of their products and driving that profitability of the organization, but nothing changed much. The organization continued to struggle and by the end of the 1990s, they were losing lots of money. Their market share was really in the tank, but then something happened. A new CEO came in, his name was Carlos Ghosn. And Carlos Ghosn had come from Renault, the parent company that worked with Nissan. And Ghosn did a couple of things, he went in and the first thing he did was he reorganized the management team. He reduced it from 43 different officers down to about 7, 8 or 9, a much tighter group. And he got the organization aligned around seven key cross functional priorities. He eliminated a lot of the extraneous kinds of things and got the organization to focus on what was critical to make the organization successful. He went in and he also simplified the organization, he closed down operations that weren't working very well. And he made some really tough choices about engaging people in the organization. Through that, he engendered a much more engaged culture around high performance expectations and he held people accountable for their results. He unwound the keiretsu, this web of suppliers, and vendors, and the Central Bank to make the organization cleaner and leaner. And then he empowered the dealers and the distribution network to be much more flexible and responsive to customer needs and wants. So just a few of those kind of things and in two years Ghosn had turned around the company. He had reduced debt by 50%, he had cut about 9 or $10 billion of cost out of the organization. And actually came out with over 22 different models that were very much what people were expecting in the marketplace. So in that short amount of time, Ghosn had really done a 180 with this company and got it back on track in terms of market share and financial performance. What's interesting is that Ghosn really didn't change the strategy. What he did was simply focus on execution of the current strategy that the other CEOs had put in place. So Nissan's I think a very interesting example of the power of the execution over and above the formulation of the strategy itself. So when asked about this Ghosn said, only about 5% of the challenge is strategy, 95% is execution. And what we want to do is dig deeper into what Ghosn and other managers do to drive execution excellence. What are the keys to it? What were the secrets? What can we learn from companies like Ghosn?