Monday, January 27, 2014

What are the ‘Right Tools’ to Follow Up Strategy Execution

 Humans are still the Masters for any Tools.

Statistically, more than two-thirds of strategy execution fail to reach the expected result. Execution excellence is difficult to achieve because it is both art and science, hard and soft; decisions and acting, quantity and quality. What are the right sets of tools to keep track of strategy execution?

Business Architecture: The goal of Business Architecture is to enable execution of the business plan. Business architecture is about boundary conditions. Establishing those boundaries and understanding their interactions is key to how businesses are structured. It is the development of better transformation roadmaps through the use of business architecture capability mapping (current and future state) and treating change management as a core work stream. From systems thinking perspective, a holistic approach would be to look at the purpose of the business (who is the customer, what they want, what’s the value to them and how they want it delivered), then look at the function (products and markets), processes required and the structure, resources, authority of the system. This forces the organization to look at things holistically, and look at business capability (including organization, skills, culture; process; and technology) rather than just some elements while ignoring others. 

Program Management: One of the best strategy execution tools is program management. As it can be used right from where the strategy is formulated till the objective are met by operationalizing the product or services intended to bring the strategic changes in the organization. Results are best as the processes are robust not only in terms of initiation, planning, execution, monitoring & controlling, closing as well as in change management. These helps periodically review the strategy plans so as to be close to the objective in eve-dynamic business environment. The best strategy in the world is only as good as the outcomes it produces. It's the aligned programs that produce the outcomes; hence, good program management is essential for successful strategy execution. Without effective program management, you will have nothing to populate your balanced scorecard with!

Agile strategy ‘Scrum’: More and more organizations start embracing the concepts of "agile business development," a derivate from the "Agile Manifesto of software development." Accordingly, one could refer to it as "strategy scrum’, the strategy execution will follow the agile guiding principles as below:
-Collaborative strategy development over processes and tools
-Working business models over comprehensive paperwork
-Customer collaboration over contract negotiations
-Responding to change over following a plan.

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. The Balanced Scorecard framework is a great way of selecting, scoping, and aligning specific projects to overall strategic objectives and the budget.  A well-defined scorecard should contain a good mix of outcome measures (or long-term strategic value) along with performance drivers to track the progress in the short term (operational value). In spite of capturing multiple perspectives, the balanced scorecard must still retain a strong emphasis on financial outcomes.

As today, the problem in the execution is mainly driven by management that is not prepared for systemic approaches or is only focused on short term effect. Thus, the tools discussed above can encourage system thinking. All good strategy planning, problem-solving, decision making or optimization tools are built on "system thinking principles”, and provide the framework to keep track of performance metrics more systematically.


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