Thursday, October 23, 2014

Business Strategy Execution Challenges

Strategy execution is not linear steps, but an iterative continuum. 

Many companies spend a significant portion of time for formulating rock solid strategies, focuses on business strategy development and puts a lot of efforts to develop a great strategy with strategic initiatives. On the other hand, strategy execution does not get the same attention which leads to misalignment with business objectives and not achieving the expected results. But more specifically, what are the business strategy execution challenges?

Strategy implementation complexity due to the velocity and ambiguity of business dynamic. Any leader will say that 'Strategy Execution' trumps 'Strategy Formulation'. It is better to execute a strategy that may be even slightly flawed than to keep on spending time/ effort/resources formulating the 'Best Strategy'. By the time, the strategy formulation is completed; the whole environment may have changed, making the whole 'Best Strategy' redundant. One of the factors for strategies to fail at the implementation phase is its complexity. There’s ambiguity in such strategy. The expectation is not communicated clearly to all and is neither well understood by all stakeholders or well defined into the achievable business goals and objectives. 

Strategy-to-performance gaps: Executing strategy has been and is still an ongoing educational journey. Leaders have now started realizing the interdependence between efforts needed to formulate a strategy and the importance and indeed the need of building internal capabilities to executive it. There are more practical solutions to bridge the strategy-to-performance gap like formulating a strategy committee involving the sponsor and the Strategy Champions. Strategies really are not meaningful unless they include an implementation plan, developed by the stakeholders and the executive team together. Strategies should be simple to be understood by all. A strategy can be defined in following two statements: 1) where should we improve, and 2) how to succeed where we choose to improve. The plan also has to be dynamic so that it can deal with changed conditions and unforeseen circumstances.

Organizational Resistance: Assuming that the Strategy Formulation is properly conducted, the gaps have been identified, the main challenges to Strategy Execution will be 'Organizational Resistance'. There needs to be the acquisition of capable personnel to execute those strategies. Create an Operations Plan that details roles and responsibilities, governance, etc; and it should be communicated on a regular basis, keeping track if there are any slippage or deviation. It is rather essential to note that strategy is everyone's responsibility and therefore a clear communication to all levels of an organization is indeed a tool that may guarantee successful execution and achieve desired results. One of the key things is that organizations tend to do too much when they are developing their strategic plan. It has more items that can be termed as a strategic mission than pure strategic objectives. Along with that, the objectives are unclear to most of the stakeholder developing the strategic plan, let alone the people delivering it.

Talent as the weakest Link: Talent is the weakest link in strategy execution. Build the right team and empowering them to implement the strategy. Organizations are usually wrong in believing that engaging the management team is enough to build the right team. Managers may or may not be fully respected and followed by team members, but there will be people in the teams who are known for high performance, right attitude of helping co-workers and who are highly regarded and followed by other team members. A strategy implementation team should be built with such people because these are the people who can drive changes efficiently, break the resistance of people and encourage them to accept new changes. It is advisable for any organization to adapt step by step process to manage strategy and build internal capability with it. The process, however, needs periodical reviews to test if the process is understood by all and that produces expected outcomes.

Lack of agility: It’s important to follow the logic steps, but be agile and flexible to adapt to the emerging changes for strategy execution: 1).Identify your Strategy Champions and select qualified execution team, the best people to execute a strategy are those who have contributed to the development of it. 2). Get sponsorship and endorsement from the C-Level for your dynamic plan. 3). Perform consistent clear communication (CCC) between all stakeholders. 4). Conduct periodic follow-ups to review/refresh checkpoints, manage internal/external changes, and mitigate risks. 

It is important to stress the importance of strategy execution. Planning and execution are interdependent. Execution involves more people than strategy.Strategy- Execution is no longer linear steps, but the iterative continuum.  


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