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Why Your Organization is Struggling with Strategy Execution

We’ve all heard the awful stats about strategy execution. Unfortunately, the poor results stubbornly continue despite our best intentions and every new idea and better approach to strategy execution and management that comes along. Based on my experience talking with business leaders, and the work I have done with clients helping them overcome their strategy execution challenges, I have noticed a few universal “truths” that might just help us better understand why strategy execution continues to be a problem in most organizations.

 

What’s Going Wrong

If strategy execution isn’t going as planned in your organization, it’s probably because your strategy formulation and execution process is riddled with breakdowns. It’s almost like broken telephone and, if strategy execution wasn’t such important business, it would almost be laughable to see the difference between strategic intent and reality.

If your company is like most, this is the way the strategy “picture” looks and feels like in your organization:

 

Broken state 1

Let’s be honest – most organizations do a pretty good job at collecting most of the information that typically goes into the traditional strategic planning process – your company is probably pretty good at it too. This SWOT information likely makes its way safely into the strategy formulation phase of the process, however, there’s probably a big disconnect somewhere between strategy formulation and strategy execution. Something just seems to get lost in translation!

The disconnects continue from there. For example, when you look at the results your strategy, and strategy execution efforts, produce, they just don’t seem to line up with where your plan said you wanted to be and what it said you would be achieving. From there, the use of results data to inform the strategy formulation process is usually inconsistent at best and the data that does make it’s way into the process is often considered to be suspect (people aren’t quite sure how we got those results in the first place so their value as a source of information is questioned).

Is this similar to what the strategy process looks and feels like in your organization?

 

 Looking closer at the strategy formulation and execution process that produces results like these, I often see something that looks and works like this: 

 

 Broken state 2

In most organizations, strategic planning is the job of the executive team and the Board and it’s done on an annual basis – are you surprised to know that these two factors (who is doing the planning and the frequency of planning activities) are actually the beginning of the strategy execution problem? Following this process, the product of strategy formulation is a strategic plan that outlines several high level strategies designed to get the organization from today’s level of performance to a performance and results destination 3 -5 years in the future.

With their work done, the senior team passes the strategic plan over to “the business” to interpret the plan and put it to action. I don’t need to tell you that, with only high level details as a guide, the variations in interpretation of what the plan looks like in action is wide and, with no additional guidance, operations carries on implementing the strategy the way they see it. Also, when it comes to resourcing the plan, it’s often a bit of a gamble as to whether the budget will (or won’t) adequately support execution of the strategies and resulting plans.

Finally, as part of their governance mandate, the executive team and the Board periodically review some set of results measures (often the financials and maybe some operational and HR metrics with a financial spin to them) to check that desired results are being achieved. At some point in the year, imagine their surprise when they discover that results aren’t going as expected. The typical response? Bewilderment and the quick implementation of a reactive results improvement plan that focuses predominantly on the symptoms, not the root causes of performance and results problems.

 

Do I sound cynical? Maybe. But come on – don’t tell me that you don’t see your company, or at least one that you have worked for, in these pictures.

The good news is that once you have an understanding of what’s getting in the way of strategy execution success, you can take steps to change the situation and achieve the strategy execution results you really want. So, now let’s talk about how you can turn these pictures around for your company so that it can become a strategy execution champion!

 

The Turnaround Plan

To get the strategy execution results every business leader wants, I have learned that there are five “must-have” changes you must make in both your approach to strategy formulation and execution, and the process that you use. You absolutely must: (1) ask, and answer, the questions that are most critical for value delivery and business success every step of the way; (2) leverage proven tools to develop a better strategy, take it off the shelf, and put it into action; (3) seamlessly integrate strategy formulation and execution into an aligned, continuous process; (4) make the planning-execution process faster and more dynamic; and (5) involve everyone in an ongoing discussion/conversation.

These five essentials really are the key to breaking down your strategy execution barriers.

The first step in your turnaround plan is to change your strategy process so that it looks like this: 

 

Ideal state 2
 

It’s not good enough to consider your external landscape as you approach the strategy formulation process – you must also include robust information about your internal environment including results and outcomes, the performance of your value-creating business drivers, and the capability of your organization to actually execute your strategy. Leveraging this comprehensive information, you must define who you are, your unique value proposition, where you’re going long-term (not just in the next 3-5 years), and what success looks like.

Next, by defining your business model, critical business value drivers and priorities, and a clear roadmap to get from here to “there” (your long-term future state), you make your strategy more clear and actionable, making it much easier for you to align your organization in a way that allows your company to actually do what it says it’s going to do. Your strategy map plays a pivotal role in this part of the process. It’s my observation that these two steps are also critical because they form the transition point between the strategy formulation and strategy execution phases of your strategic planning/strategy management process. A good transition reduces the risk that your strategy gets lost in translation.

In the last step, you define and implement a measurement framework like the balanced scorecard that supports quick, dynamic, and pro-active strategy management, and the improvement of your strategy formulation and execution efforts as required (rather than on an artificial annual calendar).

A very important and largely misused success factor in this new process is dialogue. Rather than making strategy the domain of the executive team and the Board only, everyone participates in all phases of this new process through two-way conversations. This feature alone plays a massive role in busting through the problem of strategy broken telephone which is often the key root cause in strategy execution failures.

 

When combined, these critical changes in your strategy process will result in significant changes in the way strategy management looks and feels in your organization:  

Ideal state 1

 

With this new picture (and experience), strategy formulation and execution are fully integrated with no handoffs. All of the information needed to execute the plan is translated into terms that are clearly and consistently understood by all involved. Measures are designed to provide the necessary feedback on results achieved, the company’s strategy execution capabilities, and the state and relevance of the strategy itself. The measurement of relevant results enables learning and guides the identification of opportunities for improvement through dialogue. Finally, the formal and informal feedback loops that have been implemented provide both data, analysis, and subjective information, gathered via two-way conversation with stakeholders inside and outside your organization, that are used to drive a continuous and dynamic cycle of refinement and renewal.

 

In my experience, organizations that make the commitment to implement this new approach and process to strategy development, implementation, and management see a significant lift in their strategy execution capabilities, and the business results and outcomes they achieve, in a very short period of time. The most powerful change you can make, however, is to introduce the involvement of more people, via dialogue and conversation, into your new strategy management process. Match this cultural shift with the required process changes and you’ll be well on your way to breaking down the strategy execution barriers for your company.  

How has your company improved its strategy execution capabilities? What changes did you make and what steps did you add to your strategy management process? How long did it take to see the results of the change and what were they? Please write a comment or send me a note at sandy@jetrichardson.ca to share your story!

   

 

2 Comments

  1. Jane Bromley
    Nov 12, 2012

    Hi. This article is very interesting. Thanks so much for the insights.
    Can you recommend any tools that you find are particularly good for converting strategy into action plans please?

  2. Sandy Richardson
    Nov 12, 2012

    A key tool that plays a critical role here is the strategy map. It’s vastly underutilized but that’s a mistake. The strategy map allows you to frame your business strategy in terms of action-oriented strategic objectives.
    Once you have your strategy map in place, you should align your business processes and projects with your strategic objectives. Since this is where all of the work in your business gets done, aligning processes and projects with your strategy almost automatically makes your strategy actionable. Process and project support gaps can be filled by new gap closing projects (more action).
    Finally, aligned processes and projects help your employees see their contribution to the execution of your business strategy – a critical success factor for translating your strategy into action that matters and produces results.
    Of course, your balanced scorecard also helps translate your strategy into action but I truly think that its impact in this regard is less than the impact of the strategy map.
    Sandy