FOCUSING on the Second Pillar of Strategy Execution Excellence

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Depending on which statistics you believe, between 60 to 90 percent of organizational strategies won’t be successfully executed this year. This is a truly frightening statistic. And these results haven’t changed much since 1984 when they were first reported in a Fortune Magazine article.  Unfortunately, it seems that poor strategy execution has become the norm in our organizations regardless of sector, industry, or size.

Poor strategy execution comes with huge costs – something no organization can afford in this economy. The sub-optimization of business operations; physical assets, tools, and technology; financial investments; and human capacity has significant direct and indirect financial consequences. Poor strategy execution almost always translates into customer attraction, retention, satisfaction, and growth challenges. The ultimate result of poor strategy execution is the failure to achieve key organizational performance goals. Knowing this, it is easy to see that there are rewards and competitive advantages awaiting those organizations that get strategy execution right.

Recall that strategy execution excellence is achieved through the completion of two integrated business processes – the strategy creation and strategy execution processes which exist and operate in a two-way relationship that looks something like this:

Strategy Execution Excellence In my last blog, I focused in on the strategy creation process (the often forgotten first pillar of strategy execution excellence) and the need to put focus there in the drive to achieve strategy execution excellence. Now, let’s look at the strategy execution process itself because there is no doubt that there are opportunities for improvement in the capability of our organizations to complete this process well.

Putting Your Strategy into Action – The FOCUSED Strategy Execution Process

The focused strategy execution process is designed to help you put the output of your strategy creation process (i.e. a great strategic plan) into action and give you feedback on the effectiveness and viability of your business strategy. The goals of the strategy execution process are to: (1) test your business strategy “theory”; (2) learn what needs to change or be improved to keep you on track and in alignment with your organization’s vision and mission/ultimate purpose; and (3) move your organization forward in achieving the business performance goals defined in your time-limited vision statement. Your strategy execution process is critical for getting your business strategy from paper and to the front lines AND is a primary conduit of the internal performance information that gets fed back into the strategy creation/re-creation process.

All in all, being really, really good at completing the strategy execution process has a huge impact on an organization’s ability to achieve strategy execution excellence.

Let’s take a closer look at the essentials of the FOCUSED Strategy Execution Process.

Strategy Execution ProcessStep 1: Establish Accountabilities – The goal of this step is to prime your organization to step up and take ownership for putting your business strategy and plan into action. There are essentially three things all organizations must do to complete this step successfully. First, the elements of your business strategy, often called strategic objectives, as well as your indicators of strategic performance, must have assigned owners. In general, these owners have accountability for: keeping an eye on the performance of their strategic objective or performance indicator on behalf of the organization; taking the lead role in helping others understand when performance is sub-par and why; and overseeing and managing the improvement of the performance of their specific strategic objective or indicator over time.

Taking the step of building this accountability “network” sets a strong foundation for successful strategy implementation. This foundation can be further solidified by formalizing these roles and accountabilities in ways that are meaningful to owners’ every day work and performance. Building role accountabilities into job descriptions and individual performance goal plans, and assessing the performance of these accountabilities in annual individual performance appraisals provides a greater incentive for these owners to take their assigned accountabilities more seriously. Finally, organizations must take steps to build a culture of accountability. Companies that have achieved strategy execution excellence display a dedication to action and follow through, building it right into their culture. In fact, they go so far as to define, value, support, and reward this commitment to accomplishment from the front line up. All of this goes a long way to building a culture of accountability.

Step 2: Work the Plan – While it seems obvious, the next step in the process is to actually put your organization’s collective heads down and do what you said you were going to do. However, it’s not as easy as just looking at a set of planned actions and implementing them according to the plan – if only doing business was so simply and uncomplicated! Working the plan is really about making sure that everyone in your organization understands both the planned actions AND the intent and vision behind the plan. Understanding the intent is important because, as we know, exceptions and new situations arise every day requiring many people in your organization to make ad hoc, unplanned decisions. Not every decision can be closely managed to ensure alignment with strategy – your organization would become too slow and unresponsive if this was the case! Instead, when all employees understand the intent of your business strategy, they can make informed, appropriately prioritized decisions that support your strategic direction and then take action.

To work the plan well, it is important to make these informed decisions and then take imperfect action. Imperfect action means not waiting until you have the 100% proven action or risk-free solution at hand – if you waited for these conditions, your business would never move forward. Anyway, in most cases, perfection isn’t required for success in MOST business environments because there is “play” in the system that produces desirable business results. Creating a work environment where taking informed, imperfect action is ok goes a long way to ensuring that your organization truly works your strategic plan.

Step 3: Measure – Staying on course requires the ability to measure and manage progress towards mission and business goal achievement. A set of strategy-based performance indicators lets your company do that but measurement alone isn’t enough – organizations must focus on the relentless pursuit of the truth in every situation and performance result they face. When situations and results are less than ideal, they implement meaningful improvements that are based on what the real root cause issues are.

Step 4: Learn – As I have said in previous blog posts (read more here), measurement matters for very little unless you use it to learn – learn where your opportunities for organizational improvement are; learn whether your organization is making progress towards achieving your mission and vision; learn whether the theory of how your business works to produce results is correct; and learn whether your business strategy is still the right strategy to follow.

To achieve the goal of learning from organizational performance and business results, why not try this instead? At your next opportunity, pull out this month’s business results report and ask the people on your team these questions:

1. What are these measures/results telling us about our business/strategy/ operations?

2. What can we learn?

3. What actions could/should we take based on what we have learned?

Taking this step will go a long way to improving your organization’s ability to achieve strategy execution excellence.

Step 5: Adapt, Change, and Grow – The natural outgrowth of the learning step in this process is to do something with what you learn. Quite often, what you learn should stimulate a change in something – goals, actions, behaviour, measures, strategy management infrastructure, and/or your business strategy itself. Once the need and options for change have been determined, they can be fed back into either the strategy execution OR strategy (re)creation process where an appropriate response can be discussed, their implications explored, and required actions and changes can be defined and built into the right place in your organization and/or strategy management processes.

Strategy execution excellence requires the integration of two key business processes – the strategy (re)creation process and the strategy execution process. Because both processes are so intertwined, the foundations of strategy execution failure can exist in either process. While achieving strategy execution excellence is a challenging goal, focusing on the pursuit of process completion excellence in both the strategy (re) creation and strategy execution processes will take your organization a long way towards success.

Where are the opportunities for process excellence in your goal of achieving strategy execution excellence? What improvements in which of these processes can you begin making today?