For quite some time now, the focus of discussion on blogs and in newsletters and articles in the business performance management domain has been on the continued problems organizations experience with strategy execution. In fact, many recent informal polls suggest that this is one of the top issues concerning executives and business leaders in all sectors and industries. As a result, many of today’s performance management solutions focus on building strategy execution excellence in organizations.
While there is no doubt that companies can take certain steps to define and/or improve their strategy execution process and capabilities, it is important not to do this in isolation. I am always surprised to see that we tend to assume that (1) the strategy execution problem isn’t related to the strategy creation process and (2) that, generally, businesses are very good at formulating sound and executable business strategies and strategic plans.
Unfortunately, there are critical flaws in this line of thinking. First, the strategy creation and strategy execution processes exist and operate in a two-way relationship that looks something like this:
What this relationship means is that the strategy making process, the information it creates, and the outputs it produces all have a direct impact on the capability of the strategy execution process including the quality of the information it creates and the results it produces (and vice versa). Basically, if you don’t have a high functioning strategy creation process producing a great business strategy that is understandable and actionable then you are handicapping your strategy execution process right from the start.
And this brings me to flawed thought two. I’m not sure that we should assume that our companies and organizations have a high level of capability when it comes to the strategy creation process. Sure, organizations produce strategic plans on a regular basis but again and again I see them using the same sub-optimal process to produce a strategic plan that is short-sighted and virtually impossible for employees (the people who will make or break the implementation of your business strategy) to understand and take appropriate action on.
Frankly, it’s no wonder to me that so many organizations have a strategy execution problem – they are using a flawed strategy creation process that puts strategy execution excellence at risk right out of the gate!
A Better Approach to Strategy Creation – The Focused Planning Process
The focused planning process is designed to help you answer all of the questions a good strategic plan should answer: (1) Who are we?, (2) Where are we going and how will we create and deliver value along the way?, (3) How will we get from today to where we are going?, and (4) How will we know that we are moving in the right direction/that we have been successful?. However, it does it in a way that addresses the fatal flaws of the traditional strategic planning process used by most organizations (to read more on these fatal flaws, see another of my blog posts: The Strategy Execution Challenge ). It does this through a better process, focused on creating real strategic content, AND a better approach to executing that process (one that leverages meaningful participation by, and input from, a cross-functional team of employees – not just executives and senior leaders).
The focused planning process is an effective, streamlined five step process that is concentrated on creating a true strategic plan – one that identifies the critical drivers behind the achievement of your mission (the long-term part of a truly strategic plan) and details which sub-drivers or objectives the organization will focus on over the next three to five years to achieve its vision without sacrificing the achievement of its mission (the short-term part of the plan). In addition, the focused planning process is strategy execution “friendly” since it translates your business strategy into actionable terms that every one can understand and relate to quickly and easily. Let’s take a closer look.
Step 1: Understand the Landscape – The goal of this step is to ensure that the planning team enters the focused planning process with a solid understanding of the current situation faced by the organization (both internally and external to the business) as well as important emerging future trends.
Step 2: Define Who We Are, Where We’re Going, and What Success Looks Like – Leveraging the information gathered in step 1, the team works together to create a vision for the future (including your market positioning and customer value proposition). Defining the organization’s core values (shared beliefs and norms of behavior) and its mission (the organization’s ultimate purpose) addresses the “who we are” and “where we’re going” components of this step. Defining a time-limited vision for the organization (a clear and measureable statement of where the organization will be, and look like, by a certain period in time), takes care of the “what success looks like” component of this step.
Step 3: Define the CRITICAL Business Drivers – This step is unique to the focused planning process and is the critical element that separates it from the traditional strategic planning process. Leveraging the information gathered in step 1 and responding to the mission statement created in step 2, the planning team works together to identify the value creating business drivers, or business-critical strategic objectives, the organization must focus on to successfully achieve its mission. Leveraging the strategy map format, this step defines the key elements of the long-term business strategy while also expressing the strategy in operational, action-oriented terms. Applying weighting to the strategy map allows the planning team to select the sub-set of strategic objectives receiving targeted focus over the vision period (i.e. the next 3 to 5 years).
Step 4: Define the Roadmap to Get from Here to There – Once the business critical strategic objectives have been identified and defined, this step focuses on lining up all current strategic projects and core business processes with them. Doing this helps identify any obvious gaps in business activity. Existing gaps must be addressed with gap-closing strategic projects if the organization hopes to implement its plan and achieve its mission and vision. Completing this alignment exercise also allows the organization to link up its daily business activities (i.e. operational work processes and project activities) with the business strategy, opening the door for employees to see how the work they do every day connects with the key drivers of the business and the strategy. A second stage gap analysis exercise allows the planning team to identify any new/additional gap-closing projects and activities to be completed at various levels of the organization, this defining the roadmap for moving the organization from the current state to the future state.
Step 5: Define the Framework for “Real Time” Strategy Management – Once the strategy has been established, the organization must define the set of indicators that will allow the organization to measure strategic objective health and manage strategy implementation and mission and vision achievement. It must also define the governance framework (the process and accountabilities for managing strategy on an ongoing, dynamic basis) required to ensure that dynamic and continuous strategy execution and management actually happens. The natural next step in the focused planning process is the creation of cascaded/aligned strategy maps, strategic plans, and balanced scorecards at the business unit, department, team, and individual employee levels.
The Focused Planning Process – Providing a Solid Foundation for Strategy Execution Excellence
With the strategy map created in step 3 as its centerpiece, and completed using a cross-functional employee team-steering committee approach, the focused planning approach offers organizations an improved strategy creation process that produces a better output. The result is a truly strategic plan and a strong foundation for strategy execution and management success. The critical difference with the focused planning process is the identification of the value chain, in the form of action-oriented strategic objectives, required to achieve the organization’s mission and vision – presented in the form of a strategy map. By translating the business strategy into actionable terms AND defining strategy management accountabilities, the strategy map makes executing strategy easier than ever before.
Next blog: The second pillar of strategy execution excellence – the FOCUSED strategy execution process.