Thursday, May 7, 2015

Five Key Factors in Strategy Execution

Strategy and execution are interdependent, and they are not linear steps, but an iterative continuum.

Strategy execution is difficult. A recent executive survey indicated that execution excellence was the number one challenge facing corporate leaders globally. Statistically, about two-thirds to three-quarters of large organizations struggle to implement their strategies. Why does strategy execution unravel, and what are the key factors to lead the effectiveness of strategy execution?

Communication is KEY: For far too long we have been taught that strategic choices are determined at some off-site retreat and imposed on unsuspecting employees through communication, engagement, and alignment tactics. This is hard work and bad work. Engaging employees in conversations on the preferred strategy (as a strategy determination process) engenders inclusion and employee commitment when the final strategic imperatives are decided upon. People need to be communicated to, engaged and aligned after the strategy determination process. People must be engaged when the strategic choice is actually being made, not after. Implementation will then be a piece of cake. Regarding alignment, actions needed to achieve the strategy or some part of it, it needs to be apparent in each manager's and each employee's performance plan. A good question to ask is, "how does this individual's performance contribute to the achievement of some part of the strategy?" If it doesn't, misalignment of goals needs to be addressed, stratify down, aggregate up.

Setting priority right: It takes commitment and discipline to stay focused on the real priorities of the business instead of being distracted by what seems to be more urgent on any given day. The best way to find the balance between working on the business while doing business is to utilize the process - create a rhythm of meetings that establish clarity around the top priorities of the company, and then review those priorities on a regular basis. The key to success is for the team to hold each member accountable for doing their part and this is where many teams fail.

Strategy Execution doesn't go for perfect: One of the inhibitors to progress on strategy can be the view that nothing should be done until everything is lined up and all the fingers are crossed, and the whole concept of this is true at so many levels across the board. In practice, an unexpected result or potential "problem" or mistake, can be your greatest opportunity, and offers an opportunity for growth. A real problem is when the same negative situation happens over and over despite resources and help being given and put in place. Punishing employees for every little thing that goes wrong just keeps your employees from trying anything without full permissions and total sign-offs and bogs down timelines and keeps your organization as mediocre at best.

Strategy Execution is a process: If we look at Strategy Execution as a process, and the question is whether progress is being made, then we are looking for "intermediate KPIs." Every Strategy should have a plan documenting what the organization will need to do. Since Strategy Execution mechanism is not a goal in itself, but a tool, its success should be measured by comparing the actual performance of the organization with the expectations of the owners. Thereafter, Performance Management should review whether these activities have indeed been executed and whether they have had the expected impact. Execution requires the leader to have the discipline and the courage to confront performance issues with individual team members and to resolve them on a timely basis. Otherwise, the Leader risks sending a message that says "mediocre performance is okay," which often times results in sluggish performance and derailment of the business.

The leadership maturity and talent accountability: While communication is critical for success, accountability is also important, talent plays a role, but being realistic about the number of tactics is key to execution. Execution to no more than for critical tactics facilitates focus as well as momentum with the ability to execute cleanly and quickly. Hence, the maturity of the leadership team (not just the individuals, but the time the team has had working together), the alignment of the team around key initiatives and the team’s ability to prioritize those initiatives are all components of a successful execution capability.

Strategy and execution are interdependent, and they are not linear steps, but an iterative continuum. The strategy is more important to keep business navigating through the transformation journey, but the execution is more difficult due to its complexity, by leveraging the key factors listed above, businesses can cultivate overarching business capability, and build the culture of collaboration to manage strategy execution effectively and efficiently.


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