White Paper # 1

Strategy Execution…Getting Results faster

The Issue

Changing the direction and level of performance of an organization is hard work with a very low success rate. Studies suggest that 60-90% of strategies don’t get implemented. How can that be? How can so many smart people spend so much time working on the strategic direction for an organization and yet fail to get the results that the strategy promised? Execution is the key. It is also the area that managers most often underestimate in terms of difficulty.

Most organizations have been through multiple strategy launches over the past decade. They have seen strategies, and the latest “big ideas”, come and go. As a result, most organizations have developed very sophisticated and subtle immune systems to new strategies and “big ideas”. On the surface, the immune system creates the appearance of embracing new ideas and strategies; but below the surface the immune system is working to maintain the status quo and preparing to hunker down until this new strategy/idea passes by or blows over. Management teams and their ideas may come and go but the front line folks still have their sales quotas to meet or must still keep the machinery operating on the plant floor.

Successful execution is about the process that a management team uses to take ideas on paper and turn them into action in the organization. Therefore to break through this cynicism you must make the strategy and its execution relevant and actionable to the people who must do the actual work. It means having the management team earn credibility for the strategy. In other words, the burden is on the management team to prove that this strategy is not the flavor of the month.

The old way of doing strategy just does not work. Execution is the key but often sounds a lot like motherhood and apple pie; who is not in favor of a focus on execution? So how do you rapidly implement a strategy, get an organization to focus on strategy and get to results? Why is it really going to be different this time?

Our approach

In our experience there are five very straightforward elements that lead to successful execution of a strategy.

I. Translate the Strategy into Operational terms

2. Align the Organization to the Strategy

3. Prioritize initiatives and Align Resources

4. Make Strategy Everyone’s Job

5. Make Strategy A Continual Process

Alone, any one of these ideas is not sufficient, but as a whole they form a systematic approach to execution that has proven to be a powerful driver of results. Each of these elements is described in more detail below.

1.) Translate the strategy into operational terms; The senior management team needs to ensure that they are on the same page regarding what the strategy really means. The best way to do this is to describe the strategy in more detail…what do we really mean by, for example, customer focus? In our experience 5 executives are likely to have 5 different answers to this question if you ask them for any detail. We help the management team create a map or a blueprint of what the strategy consists of. This map or blueprint is in enough detail to ensure that there are no disagreements on the senior team about what they are planning to do. It includes a clear articulation of a handful of strategic themes with specific objectives, measures and implementation plans for each theme. At the end you have a document that describes, in enough detail to be meaningful, where the business is headed and how we are going to track progress.

2.) Align the organization to the strategy; Now that you have had the senior management team articulate the strategy in operational terms, how does each part of the organization relate to the strategy map? Lack of relevancy and ownership is the death of a strategy. So how do you make the strategy relevant to each part of the organization? To do this each part of the organization must balance their alignment with the overall strategy and the articulation and inclusion of their unique organizational and business challenges. Our process for doing this builds both ownership and relevance for the strategy at the next level in the organization.

3.) Prioritize initiatives and align resources; Nothing kills a strategy faster than over committing resources. Just picture this… the Management team tells the organization; “Yes we know that you are already working at 120% of your capacity but we have these great new strategic initiatives that we now want you to devote 20-30% of your time to”. Is it any wonder what the front line, where real execution occurs, response is going to be? They will focus on how to kill the initiative as fast as possible or, even better and less risky, to stall on doing anything about it until the management team either asks a second or third time or turns its attention to something else. Finding the balance between running the business day-to-day and starting to implement the new strategy is probably one of the single biggest obstacles in strategy execution. There are no easy choices or silver bullets here; but our process ensures that you have a disciplined approach that drives accountability and transparency for the choices that are made. Ultimately this makes sure that you find the right balance between change and running the business today.

4.) Make strategy everyone’s job; We love to talk about “Dilbertesque” scenes here. Imagine a senior executive team that expects the organization to do a superb job of executing the strategy. Now have that same management team keep the strategy a “secret” for fear competitors may hear about it. Now expect front line people to execute something that they don’t really understand. Sounds like a Dilbert cartoon…in fact we use one in our presentations. If the strategy does not get translated down to each individual person in the organization then execution will not happen. People must have a “line of sight” between their role and work and the objectives and implementation of the strategy. For execution to occur the strategy must be communicated and then aligned with the personal objectives of individuals throughout the organization.

5.) Make strategy a continual process; We believe that strategy is really just a series of “educated best guesses” or hypotheses about the future of the business. If so, then these hypotheses need to be tested against reality and adjusted accordingly. In other words, we believe that “strategy” is a continuous process of learning about what works and what doesn’t in your market space and industry. When some part of your strategy is not working you need to examine why not. Has something changed in the environment? Have we not executed well? Or were we just wrong with our initial strategic direction? What’s the specific cause is not nearly as important as what you do about it. Thus accurate, timely feedback allows you to do things differently, to adjust to reality. Therefore our approach to strategy execution includes the development of a feedback mechanism so that the management team can make real time adjustments. The organization that learns and adjusts fastest is going to win. This is in essence real time strategy.

We believe that the whole is greater then the sum of the parts. Taken together, these five concepts provide the foundation for the successful execution of a strategy.

The Balanced Scorecard

Our approach for translating these five core concepts into reality has been developed around a management tool that has become quite well known and used – The Balanced Scorecard (BSC). David Norton and Bob Kaplan first wrote about the BSC back in 1993. There have been two, soon to be three, books written about it as well as numerous articles in various business publications. We at Leadership Perspectives have been working with them and the concept almost from the start. However, we have built a unique approach to using the BSC based on our collective experience of implementing the BSC in many and varied business situations and environments. Besides being a proven tool for driving accountability for execution, our BSC approach incorporates a number of unique aspects that enhance the effectiveness of this management tool;

• The 80/20 rule; you don’t need to get everything right the first time through this process. Get the approach in place and refine it as you go along-- don’t let perfection be the enemy of the good.

• Customer focus and validation is critical. Run your initial cut at the strategy map by some of your most influential and important customers. Gain the benefit of both their insight and reactions to what you are planning as well as their ownership for its success. Some market validation of your strategy is really a good thing!

• Involve the organization early in the process—it helps build buy-in and momentum. Use focus groups 2-3 levels down in the organization to get feedback to your initial draft of the strategy map. It is good to get early buy-in to your direction as well as getting the feedback sooner rather then later that some ideas are unworkable.

• You can’t over communicate with the organization about the strategy and this implementation approach. Time and time again great efforts at involving the organization in execution get bogged down when the rumor mill questions trust and credibility. Don’t let a vacuum occur. Strive to over communicate and you may get it right!

• Integrate this approach into how you run the business. The implementation plan that you embody in your BSC needs to be aligned and consistent with 2-3 critical elements involved in running the business; your budgets; management meeting agendas; your performance management process and training programs; and last but not least your compensation plans. There must be alignment and mutual reinforcement of these systems to keep the focus on strategy execution.

Final Reflections on success

Strategy execution is essentially a leadership challenge. In our experience, the number one factor that influences successful execution and the achievement of results is the quality and consistency of support for the effort by the senior leader and the management team. You and your team must be prepared to walk the talk. Your credibility is on the line whenever you try and introduce change into the organization. Successful strategy execution is based on blending analytical rigor and customer focus with a deep understanding that the “soft-side” of leading change is really the hard part.

Our experience has been that working on a disciplined process for strategy execution combined with a deep reflection on how you and your team “show up” to the organization as leaders are THE KEYS to success. These two management efforts, strategy execution and leadership of change, are essential and self-reinforcing. We believe that when used together, in a thoughtful and systematic way, it really is a case of 1+1=3. The rigor of our framework for strategy execution coupled with focused interventions on how leaders lead change has proven to have a huge impact on the success of strategic change efforts. We believe that the following whitepapers on the importance of a leadership model, leadership development, and ongoing support for the demonstration of new leadership behaviors (see white papers # 2, 3, & 4) make clear how and why leadership development and strategy execution go hand in hand in delivering world class execution and extraordinary results.