Saturday, October 10, 2015

How to Improve the Effectiveness of Strategy Execution

The most efficient way to make sure both design and execution stay aligned is to integrate the expectations of critical internal stakeholders into the design.

The word "strategy" is pretty amorphous with so many individual interpretations and nuances of its meaning that conversations about it often go astray amidst a blizzard of the latest buzzwords. To make it worse, more than 70% of strategy fails in execution. It is about many different matters like resistance to change, silos or units with competing agendas, lack of clear and decisive leadership, leadership actions inconsistent with strategy, poor communication of strategy, lack of accountability on follow-through; inability to measure impact, too focused on short-term results, and maybe the most popular and big obstacle: making it meaningful to frontiers, translating strategy to execution, aligning jobs to strategy. So how to improve strategy execution effectiveness?

Outline benefits: A strategy for business change should outline the anticipated benefits - with the benefits being delivered and executed via programs and projects. When we use the word “strategy,” it must have long term objective, company level implications, and deals with the business eco-system. If the plan does not involve any one of these, then it is just a business plan – not a “strategy.” Further, one should call a plan or a course of action to have pre-defined result only when “strategic people” are involved. “Strategic people” means who have decision-making authority or who can veto a decision. If the key strategic benefits have not all been delivered, and the strategy has been properly designed with adequate buy-in, then something has gone wrong with the program design and/or program and project level benefits realization. Or reorient a badly planned strategy that overlooks the expectations of the executive ranks tends to fail if the executives have no incentives or bad incentives to engage in organizational success. They turn to themselves, collect short-term profits, and leave. That can be easily avoided by taking into consideration those expectations in the first place. If executive ranks feel engaged, they will align their individual priorities with those of the designed strategy and push for its success.

The significance of design: The most efficient way to make sure both design and execution stay aligned is to integrate the expectations of critical internal stakeholders into the design. If your strategy is designed with these expectations in mind, execution will succeed. Gaps are created when strategies are misaligned with the expectations of the implementation team. This requires an internal branding component of the initial strategy to be attached. The whole concept of design of strategy includes the expectations of the line managers as well as anticipation of execution issues. Hence, the design of the strategy is definitely important. A lousy strategy remains lousy even when implemented. Hence, the significance of design, which decides whether you can be on a path of mediocrity or greatness. Define the strategy through wide participatory processes greatly increases the likelihood that the defined strategy is implemented. The strategy is a living document that should be amended by changes in the business directions, market conditions, unforeseen events, and current and past execution learning. Implementation is about the realization of such a concept or plan. It is all about an integrated system approach and every step is essential in reaching a specific outcome, and it is not about what is more important but rather about the whole thing and the result.

Internal capacity: What is missing is the internal capacity to understand the strategy to the extent that the management and executive teams can participate actively in strategy development and honestly drive implementation. Sometimes strategy makers spend more time designing the content of strategies than thinking how to implement them successfully. In other words lack of accountabilities, lack of decision rights, and inter & intra-divisional tensions. They have to drive implementation, otherwise, the emergent strategies will continue to be the other of the day and nobody is adequately prepared to function well in this reactive mode. Hence, planning the strategy execution during the design stage in detail is very critical. It is clear that in many cases, often the strategy that is eventually realized, in many cases, differs from the original plan.

Change Management: Strategy implementation is a change management problem. Many executives who don't understand change management or the maths behind it believe they can 'execute Strategy' by just telling their team to 'get on with it,' and when that fails they then remove the 'poor managers who didn't deliver' when the fault lies solely with themselves. The success in executing a strategy depends on the kind of inputs, data, information, management assumptions that go into strategy formulation. So, what is more, important and relevant is the process, ingredients, and people involved in formulating the strategy. Detailed time planning of all tasks associated with strategy execution in relation to the strategy formulated; flexibility in the execution plan, so that the change in results of individual steps can be accommodated to plan subsequent tasks. Management should, however, be prepared to consider changes along the way, given the current rate of change that exists.

Path-finding: Obviously, when it comes to the doing of Strategic Planning, there needs to be a process for effectively uncovering what this strategy might be before any planning might take place. At a high level, this could involve creating a framework for understanding the organization's core capabilities more effectively or perhaps a mechanism for generating a survey which can identify employee expectations for the company. In short, you can't just 'design' a strategy, you need to think about how you're designing it. All strategies are intents. Some of them become actionable with plans. Many plans lose viability during their expected window of opportunity. Modifying a plan does not necessarily change the strategy, but it may mean that the strategy has to be re-implemented. Execution (or implementation if you will) is always more important than design in a VUCA world. Yet the act of planning (or design) is important as a way of gaining shared intents, Strategy design is not just, about defining what is our goal, but it is the path, to the achievement of the goal. Whereas, in strategy design, most often elaborations are put on what is the strategic goal, what are the key success parameters of that strategy, and not how to reach those goals. The path is left for the executors to find themselves and succeed.

Setting metrics: On the strategy execution side, there are a few areas in implementation. Firstly, the organization needs to think about what metrics and KPIs could be used to communicate the strategy to the business. Metrics and KPIs will be different for each function/business unit dependent upon what role they play in executing the overall strategy. And then the dashboards of these metrics need to be regularly discussed in executive meetings to discuss progress/whether resources could be reallocated to the most important initiatives if others are falling short. it all depends on how often the business shifts directions. Implementation" of a strategy is 90% about initiating and managing necessary changes from the current state to both the strategic positions and designated action capability at the positions.

Strategy execution is difficult, there are many roadblocks on the way, however, it can be managed well: From effective leadership to execution culture; from proactive planning to rigorous processes; from measures to balanced scorecards; the super execution is the result of synchronization of all key business factors; organizational agility, intelligence, strong disciplines, and management practices.


Strategy should be the common perspective of all involved

Strategy should be the common perspective of all involved

Post a Comment