Friday, May 22, 2015

Digital Master Tuning #89: How do you Measure Success of Strategy Execution Program?

If organizations measure the input to the implementation, but not the output, it's a recipe for disaster.

The purpose of the strategy is obviously to enable the organization to reach its strategic objective or vision. So, to measure the strategic execution is about how well organizations actually reach that goal or vision. What are the multifaceted aspect or logical steps to measure the success of your strategy execution program?

The first step is to translate the objective into KPIs that act as a proxy for the objective. However, in many organizations, KPIs are not linked to strategy or objectives, but rather measuring what can be measured. If we see a positive traction in the KPIs, then we know that the strategy is right and that it has been executed in the right way. Another important step is to break- down the objectives to understand the dependencies and logic behind the KPIs. If a KPI is "red" - what is a root cause to this. The execution planning first starts with a force field analysis of the "from and to" attributes in descriptive terms, then identifying the opportunities and barriers. Next, develop descriptive milestones for the "from/to" attributes and a scale that indicates how far the organization has moved from one to the other. If you feel more comfortable with quantitative metrics, develop a survey with a scale denoting 1 as no movement toward to 5 as "change fully achieved," then use statistical analysis to determine where you are. Next, make mid-course adjustments to keep moving toward fully implemented -- using this tool and combining with moving around the organization and asking qualitative questions about the change effort empowers rather than intimidates a majority of the employees -- not that quantitative and financial measures aren't paramount, but it has been able to identify far more root cause issues by first using qualitative measures and thought provoking questions then guiding the conversation to quantitative measures ...

Set “SMART” goals to link individual performance to the strategic initiatives: Measuring the success of strategy execution comes from experience. Good organizations do follow a process and tick the boxes. Better organizations measure the important issues as they go along and adjust the plan/objectives /goals as and when required. Logically, it is as simple as achieving the execution of the strategic initiatives and the benefits arising from them. The complication is that this achievement is managed through the activities of individuals whose goals are linked to the strategic initiatives, so each of these individuals and their goals (SMART) must be actively managed to achieve success.

Program Management are typical instruments for strategy execution. Indeed, you start programs as a manageable means that will go after well-defined benefits, aligned with the strategy. In a sense, program execution adds up to the strategic success, but programs are actually part of a more comprehensive framework, the portfolio. The portfolio expresses the strategic intent, and a proper portfolio execution leads to whatever you call "strategy success." Professional Project Management techniques require the definition of objectives, milestones, and goals linked to the interim and final program outputs and overall business needs. These are higher objectives than just cost, time and quality. Performance measures must be applied to both the input of the program activities and the output at various levels of hierarchy. The measures must be appropriate, real, and measurable if you are looking at a project to develop new software, you need to ask: has that software met its brief? and does the output of the brief meet the business requirements? Is the software objective compatible with other objectives in the whole program and strategy? Is it being used correctly? Has proper training being delivered? Have internal or external factors changed since the strategy was devised? etc.

The velocity of the strategy execution is another parameter you 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 execution success. For long-term implementations, it’s important to also review and confirm the initiative objectives, goals etc. periodically.

If organizations measure the input to the implementation, but not the output - a recipe for disaster. Selection of KPI is the another tricky part and selection must be aligned with the objective, and as business strategy is more dynamic than ever nowadays, therefore, there’s no one size fits all, you may have to adjust KPIs from time to time accordingly. The Objective is what you are looking to achieve, the KPIs are indicators of your progress towards achieving it.


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