Strategic Planning an Execution – Paper to complete the course (University of Virginia)

from Daniel Metz

Strategy Execution Plan

Introduction
Scania is a world-leading provider of transport solutions, including trucks and buses for heavy transport
applications combined with an extensive product-related service offering. Scania offers vehicle
financing, insurance, and rental services to enable our customers to focus on their core business.
Scania is also a leading provider of industrial and marine engines. Scania employs 50,000 people in
around 100 countries. Together with their customers, the company is driving the switch to sustainable
transport systems and in this way is creating a mobility world that is better for companies, society and
the environment.

The following is about the Scania Germany and Austria business unit. As in most other countries, the
market is characterized by 6 competitors: Mercedes, MAN, DAF, Volvo, Iveco, Renault and Scania. The
market shares in Germany are distributed as follows:

Iveco Renault
5% 1%
Volvo
9%
Mercedes
DAF MAN
Mercedes
10% Scania
33%
DAF
Scania
Volvo
11%
Iveco
MAN Renault
30%
Others

Strategy formulation
As part of Scania's business strategy, Scania has formulated three focus areas in which the company
has to deliver in order to work sustainably in the future: CO2 reduction, circular economy and
employee sustainability. In order to achieve the latter part of the goal, Scania pushed back to initiate
a transformation from the area of Human Resources: Human Resources becomes “People & Culture”.

Scania’s people are the key to the future, and Scania needs to enable Scania’s workforce to have the
right size, shape, dynamics and performance. Scania needs to create new skills and conditions to
enable and propose new solutions. Acceleration of their transformation is also depending on their
leadership, and Scania must contribute by strengthening their managers to the next level.

The following is about the strategy to implement the transformation to ”People & Culture”. The “War
Room” approach is taken as an example for the strategy formulation. Unlike a traditional office
environment, war rooms are spaces where key people get together to solve a difficult problem. Also
known as situation rooms, or command centers, war rooms should always have the goal of solving a
difficult or specific problem via clear communication and improved workflows.

1. Storyboards

“The first and perhaps the primary element of this approach involves what are known as storyboards,
and this could also be known as sequential thinking or indicated thinking or visual sequencing. (…) This
includes some kind of visual representations, the nature of your assumptions, and the strategies you
think the organization might unfold.”1 So this is about the description of the status quo and the joint
development of the strategy for how these transformations could succeed.

2. Involvement of organisation members

In order to put the strategy development on a broad basis, the inclusion of a wide variety of people is
crucial: Managing Director, Managament (incl. HR Director), members of the current HR-Team,
employees from other departments and other Steakholders. In the end, the aim is to achieve a mutual
commitment that the strategy that has been worked out will also be implemented.

3. Involvement of experts

In order to establish this process of agile strategy development, it is advisable to involve experts who
accompany this process in a structured manner - especially if there is little experience at the procedural
level. The involvement of experts can also be interesting, who not only accompany the strategy
development on a procedural level but also provide ideas and suggestions in terms of content.

4. Input from diverse perspectives

The inclusion of the most varied of perspectives is very relevant here, and is ensured by the compilation
of the participants and the involvement of experts. However, it is particularly important with this topic
that different perspectives are brought in from the HR area.

5. Collaboration

In order to be able to fully exploit the potential of this approach, it is important to encourage
cooperation between all parties involved and to incorporate everyone's opinions, regardless of their
hierarchical position in the company - from managing director to employees in the HR department,
from the employees of the other departments and external experts.

For illustration purposes, a checklist for the War Room is attached:

1
https://www.coursera.org/lecture/strategic-planning-execution/strategy-formulation-the-strategic-war-
room-XAuEv
Illustration: https://www.designabetterbusiness.tools/tools/war-room-checklist

Strategy analysis
The hypothesis test is used here for strategy analysis. This is a useful tool to analyze the strategic
options or strategic actions that Scania could now take to reach the transformation goal of the strategic
focus area of employee sustainability. If Scania wants to remain the leading provider of sustainable
transport solutions in the future it has to increase its attractiveness on the job market, differentiate
itself positively from its direct competitors and bind the high potentials within the organization more
closely to itself.

1. Value Test - Identify mission and values

Based on Scania's core values2, which include team spirit and integrity, leads the transformation from
HR to “People & Culture” to the mission of becoming the most attractive employer in the industry -
and thus a company that will increase its market share.

2. Analyze the competitive environment

With a view to the competitive environment, I would like to focus on the market-leading companies in
Germany and Austria: Mercedes and MAN. Both companies have a long tradition, have established a
market very successfully and are strongly influenced by a German mentality. Like Scania, MAN is also
part of Traton, a brand in the VW Group in which the truck business is bundled.

2
https://www.scania.com/group/en/home/about-scania/scania-in-brief/how-we-create-value/the-scania-
way.html
 3. Analyze competitive position

In this German-Austrian market, the focus on People and Culture offers promising opportunities to
make a clear competitive difference. The Scandinavian understanding of successfully shaping
cooperation together offers every opportunity for future and current employees to position Scania as
an attractive employer. The focus on a culture that expresses the appreciation of the individual,
promotes individual skills where they are also useful for the company and in which team spirit shapes
this will be decisive. Especially in comparison to the classic German corporate structures, as can be
found at Mercedes or MAN, this creates attractiveness for the younger generation, who nowadays
have different expectations of an employer.

4. Data collection

Internal data can be obtained from the employee survey that has just been carried out, which shows
areas of action and which should be taken into account in the context of the upcoming transformation.
Targeted surveys on employees' wishes for an attractive culture in which the employee is the focus
should also be carried out here. External data expressing the attitudes and expectations of the younger
generation up to the age of 25 can be found for example in the Shell study.3 Other data from
competition analyzes are available, for example on the following platforms: e.g. Hoovers Bloomberg,
Lexis-Nexis Academic Universe or Compustat.

5. Next steps

Based on the knowledge gained here, the next step is to develop the strategy for implementation. Here
too, everyone should be included: Managing Director, Managament, members of the current HR-
Team, employees from other departments and other Steakholders.

Strategy implementation
“About 70% of strategic initiatives failed not because the strategy was bad, but because the
organization was poor at execution.”4 To meet this challenge, the 4A Model can be used for the
implementation phase.

Illustration: https://www.achieveit.com/resources/blog/reframing-your-framework-4a-planning-model

3
https://www.shell.de/ueber-uns/shell-jugendstudie.html
4
https://www.coursera.org/learn/uva-darden-strategic-planning-execution/lecture/G5qnh/the-4a-model-of-
strategy-execution
 1. Alignment

Strategic alignment in external and internal respects is the most important step in strategy execution.
External alignment means that the strategy for implementing People & Culture must be integrated into
the corporate strategy. This is ensured, in addition to the focus on the market and finances, the focus
on Scania’s employees enables future success. Internal alignment is all the processes and practices,
and structures work together, and they reinforce one another. For Scania, this is about a connection
to many activities that are already promoting the Scania culture in certain areas and that focus on
employees again and again. Ultimately, leadership alignment is also necessary to ensure
implementation from the top of the organizations to the lower organizational units by the executives.

2. Ability

“Everything starts and ends with people.”5 The abilty to implement the strategy depands on the people
at Scania. This means that you focus on topics such as talent management, personnel development
and succession planning. For this reason, we are currently in the process of putting a corresponding
concept on the way. The following diagram shows further aspects of the talent system.

Illustration: https://www.coursera.org/learn/uva-darden-strategic-planning-
execution/lecture/NNaVO/investing-in-talent

3. Architecture

The question of the right architecture is not about creating a bureaucratic and underorganized
organization. Rather, it is about creating an organization with a view to the VUCA6 world, which is on
the one hand adaptable and on the other hand able to consistently implement its strategy. For Scania,
it depends on flat hierarchies that ensure a good flow of information on strategy implementation and
enable individual adjustments to requirements at lower levels. A matrix structure ensures this.

5
https://www.scania.com/group/en/home/career/graduates/young-potential-trainee-program/people.html
6
https://whatis.techtarget.com/definition/VUCA-volatility-uncertainty-complexity-and-ambiguity
 4. Agility

Agility enables Scania to react to changes in the environment as part of its strategy implementation as
well as to necessary internal adjustments. Regular experimentation as part of the strategy
implementation ensures that unforeseen challenges can be permanently solved. It is made possible
that the differently distributed knowledge in the organization can be used and continuous learning is
ensured. It is made possible that the differently distributed knowledge in the organization can be used
and continuous learning is ensured.

Conclusion
In order to continue to position Scania as a leading provider of sustainable transport solutions in the
future, the transformation of the HR department to People & Culture is required as part of the
"employee sustainability" business strategy. This transformation will change the entire organization,
focus on employees and promote a culture that focuses on team spirit and integrity. The
implementation of this strategy will result in being perceived as an attractive employer in the industry,
finding the right and future talent and retaining them at Scania. A successful implementation can be
ensured on the basis of a well-founded strategy analysis and strategy formulation. the focus must be
on the permanent support of the implementation. This means that employees and managers are
equally challenged to ensure joint success: Everything starts and ends with people.