Tuesday, May 19, 2015

How to Improve the Success Rate of Strategy Execution

The success of strategy management undoubtedly lies in the ''timely execution.''

If strategy making is more important, perhaps strategy execution is more difficult. If the strategy is deciding what to do, then execution is all about making it happen via engaged, competent and committed managers and employees. A recent executive survey indicated that execution excellence was the number one challenge facing corporate leaders globally, but more than two third of organizations struggle to implement their strategy smoothly. Hence, organizations need to address this aggressively to really start cranking up their execution abilities. And what are important factors in executing strategy more successfully?

The hybrid strategy management with a mix of centralized and decentralized approach: During strategy definition, the top leadership needs to take more of the lead, while engaging senior or mid-management and other experts from the organization. One could argue this is more of a centralized approach. Knowing how to plan and execute while overcoming the day-to-day 'surprises' that pop up is the most foundational capability any organization can have." It's leadership's responsibility to drive the execution of the business strategy, but strategy execution hasn't been a competency in modern day organizations. During the strategic planning and strategy execution, the senior or mid-management needs to take more of the lead since the subject now is the details of operations: what needs to be done to achieve the strategic vision? One could argue this is more of a decentralized approach.

Cross-functional communication and collaboration: Since no function in an organization can achieve its objectives in and by itself, there needs to be cross - functional cooperation in strategic planning and strategy execution. Consequently, there needs to be some sort of centralization - platforms for cross - functional decision making effectively, which requires a standardized approach to planning, performance and risk management. Strategy execution by nature requires long-term consistency in all of its actions and activities in a way that genuinely supports the approach selected. Organizations need less process and more cross-functional connection, trust, and communication within the intangible assets of organizations. How well your employees know, understand and are connected to the strategy will always directly correlate to its delivery and performance.

Employee engagement: The most fundamental ingredient for good execution is "engaged employees" Presence of, or absence of any other factor does not impact as much as having or not having engaged employees. However, one of the biggest turn-offs for employees is to be overloaded with yet another strategic initiative. That is the reason why execution excellence remains to be the most important challenges for CXOs across the world. The irony is that if you were to see the Gallup "State of the Global Workplace" report - just 13% of employees are "actively engaged," which is half the number of the actively disengaged employees. The real key to unlocking great execution is found through the heart and engagement level of people. The challenge is for an organization and a strategy execution management framework to create the committed and engaged employees. The approach and system include the integration of the strategic initiatives with individual’s primary job responsibilities in a process that establish a performance agreement between an employee and their manager. The performance agreement is then the basis for regular (monthly) progress meetings between the manager and subordinate. Achievement of an employee's goals contributes to the successful implementation of the strategic initiatives.

Measurement: Velocity of the strategy execution is an important parameter we can measure the execution success. Execution of a strategy is achieved through series of interdependent actions and decisions run in the iteration. How fast are you closing the decision loops and completing the various operational tasks, all coming up in the strategy execution path represents the execution velocity? These can be measured and taken as one of the indications of the strategy execution success. Balanced scorecard offers a way for a corporation to gain a wider perspective on its strategic decisions by considering the impact on finances, customers, internal processes and employee satisfaction. The analysis takes into account financial and non-financial measures, internal improvements, past outcomes and ongoing requirements as indications of future performance.

Governance: 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. Governance is an internal control to monitor the execution path. Strong governance disciplines enforce the ability to revisit and reinforce 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 key.

The success of strategy management undoubtedly lies in the ''timely execution'' and this can be achieved only through effective strategy-execution management, employee engagement and collaboration, continuous persistence and follow up with strong governance discipline. There must be a sense of urgency. Further, leadership at operational level must be competent, dynamic and smart to taste and digest the initiatives. Keeping fewer key initiatives increases efficiency and effectiveness. Digital Strategy - Execution is no longer linear steps, but an iterative continuum.


Post a Comment

Twitter Delicious Facebook Digg Stumbleupon Favorites More