Sunday, November 17, 2013

Five Success Factors in Strategy Execution

Strategy Execution takes both capabilities and disciplines.


We all know setting up a right strategy is tough, but executing a strategy could be even harder, Why is it so difficult to execute the strategy? As Execution is a broader arena which has to connect more non-linear dots and take multi-disciplinary understanding and capabilities.  Still, some high-performing organizations are excellent upon strategy execution, what are the most important factors to be successful?

1. Leadership Effectiveness 

Leadership is crucial in strategy execution, as effective leaders are like orchestra maestro who will implement the harmony in all stages, and they are also charismatic strategy champions who will achieve buy-in.

First of all, a leadership team is taking charge of setting ambitious and achievable strategic objectives. Most people get the maximum motivation when the company they work at is very ambitious with their strategy. Often trying to be the best, the most innovative organizations push people out to the comfort zone, or take extra mile,  Of course, strategy has to be clear and achievable

Besides strategy, an effective leadership team will also tune in the organizational structure and working /culture style in executing strategy smoothly.
STRUCTURE - do the department/ business units work together? Is it centralized or matrix oriented? Are there walls that need to be knocked down?
STYLE - What's the culture of the company? How do the top managers promote goals & share their values... These factors are all inter-weaved!

Leadership team shall also define ‘Execution Success' via multiple dimensions
1).Length.
2).Breadth.
3).Height.
4).Time.
5).Dimension

2. Communication Effectiveness 

The successful strategy needs good communication transmission that will create the sense of ownership. Everybody needs to be involved, at a certain point and at a certain stage of the strategy execution. Seek ideas / suggestions with the execution team and create a bonding within the team.

Involving all stakeholders right from the beginning; this will help the expectation management / perception management etc; a key consideration is to understanding that translating strategy is not a project to fix something which is wrong (reactive), it is a proactive mentality to move the organization to a future point.

Effective communication will enable better-translating strategy into project portfolio. The strategic plan drives an organizational project portfolio mix. The desired portfolio mix drives project selection criteria. This creates the linkage from strategy/vision to implementation. 

Effective communication will identify, and enforce both internal and external success factors in strategy execution, and help avoid roadblocks or overcome barriers. 
1) Internal factors for the strategy execution are the next:
-Best Management -Management capacity to implement strategy successfully.
-Sufficient resources and human resource.
-Knowledge management and skills to implement it.
-Technology to execute strategy.
-Goal setting-achieved results.
2)External factors for the strategy execution are the next:
-Favorable Law and regulations.
-Policy and Institutional environment.
-Economic favorable environment.
-Policy stability and certainty.
-External stakeholders’ effective relationships.

3 Excellent Execution Skills 


People, more specifically, talent skills are the most critical link to execution excellence. Do you have the expertise & core competencies to achieve strategy and make defined future happen? Is training needed? Do you have the right team in place, from a skill, culture, & per volume standpoint... People will make or break the operation's success.

Realistic time-frames for actual delivery - not just published ones: Translating strategy into operational readiness is a real skill and is typically a medium to long term goal with a number of dependent tasks. Building a roadmap with a clear set of timelines and milestones will lead the execution journey more effortlessly.

Focus: It is really important to focus on a few initiatives and priorities them. Senior Executives should say no to many of the initiatives and just choose a few where they will put most of the resources (resource, people) of the company. Today companies very often say yes to all the initiatives, with the consequence lack of focus. This is then spread through the organization and people no longer know where the priorities are.  

4. Strong Governance 

Management and Governance are interdependent disciplines, a strategy execution takes both for success. Statistically, the organizations with strong governance achieve better profitability and higher performing resulting than their competitors.

The effective governance practice should sustain the transformative change in business. Evaluate whether the governance leads to streamlining of processes, improve risk management and whether the organization is able to measure its strategic objectives more effectively and efficiently. If a strategy is not moving forward as desired, an organization has a cleaner structure to traverse in an attempt to identify the root cause and take mitigating actions.

Internal control to monitor the execution path: Strong governance disciplines enforce the ability to revisit and re-enforce what you have put into place at the start of the program consistently before moving on to new phases. Under strong governance, the well-defined KPIs will help measure results both qualitatively and quantitatively. So discipline and follow-up are the keys.

Effective governance mechanism is embedded into project management processes seamlessly. Project performance measures (success criteria) for each project are defined in relationship to the business strategy; performance measures for project team members are linked to the project performance/success criteria. Such linkages create more resource engagement as it should be clearer to people how their work impacts the organization as a whole.

Effective governance should oversee the following business components and ensure organization as a whole is more effective and efficient than the sum of pieces.
1). Resources (Time and Information are also resources)
2). Plan
3). System
4). Process
5). Executive Drive (Including Culture)  

5 Agility 

With the accelerating speed of business change, more often than not, the strategy is not static, but dynamic, the strategy execution phases will also be cascading, not linear steps. So alignment with the corporate strategy takes flexibility to rapidly change based on manifested conditions.

Agility is the ability to think and act promptly to the changes. A successful strategy execution needs to well orchestrate plans, allocation of needed assets, time frame, market conditions, preparing 'what if' scenarios, analyzing impact on / of customers & competition, and setting the ultimate fishbone diagram planning for multiple forks in the road for quick agile ability to react 

Strategy-Execution scenario should embrace the agile philosophy. Discussions of strategic plan issues must be ongoing and not merely a once-a-year exercise, strategy execution will keep the speed at sync, and strategic planning and execution should keep the long-term view within the short-term attention and focus of all key players and to facilitate change within the organization. That said, you are devising strategy, it needs to be relevant but also general to deal with the changes the organization will naturally experience

The strategy is both art and science; strategy execution takes both capabilities and disciplines, there's no magic formula, through in-depth understanding these key success factors, organizations can jump start at the horizon. 







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