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Strategy Execution

It is one thing to develop a top business strategy and quite another to see that strategy effectively executed. Simply view this glaring figure from Fortune Magazine, which recently stated that “less than 10% of strategies effectively formulated are effectively executed.”

As this statistic easily shows, organizations too often fall within the majority rather than the minority when it comes to strategy execution. Many strategic plans are doomed during the initial stages of development because they lack foresight or fail to incorporate all areas of operations. And even if a strategic business plan is well-developed, seeing it out requires at least as much or even more dedication.

Like anything in the business world, strategy execution requires persistence, patience, and flexibility among many other things. With the everyday demands that come with running a business and performing ongoing work tasks, it is quite easy for strategy execution to fall by the wayside. Yet studies (and common sense) indicate that organizations able to execute mediocre strategies far outperform those with brilliant, yet poorly implemented strategies.

If strategy execution has proven itself to be so difficult, what can management teams do to better ensure success? They can focus on “Enterprise Strategy Execution,” a proven, ongoing process that encompasses a series of stages, steps, and methodologies, which together help organizations evolve toward a more performance-focused, strategically-aligned, results-driven culture.

So what exactly is Enterprise Strategy Execution? Basically, Enterprise Strategy Execution (ESE) empowers every employee toward a common strategy by focusing on a continual process of prioritization, improvement, and control.
In other words, ESE solidifies your workforce towards contributing to the development and implementation of a successful strategy via these three important parameters. Your organization plans and deploys strategic objectives during prioritization, while employees and management continually fix performance gaps in the most critical areas throughout improvement, and subsequently lock-in on improvement gains during control.

Each of these three major areas contains sub-sets or specific focus areas that help an organization progress:

PRIORITIZATION
Exposure and Epiphany where a critical organizational need creates an impetus for change (an “ah-ha” moment occurs within the leadership team)

Executive Buy-in & Support where additional leadership approval is gained to continue the focus on Strategy Execution (this typically occurs among the executives charged with developing strategies and/or carrying out operational tactics to achieve them)

Strategic Planning & Mapping during this phase, a strategic plan is developed to lay out the short- and long-term direction for the organization, and a “strategy map” is created, which distills the often-unwieldy strategic plan into a simple, visual depiction of this year’s plan. The strategy map is an important step in encouraging the organization to focus on the critical few priorities.

Top-Level Balanced Scorecard this tool takes the prioritization of the strategy map one step further, making the organization’s top objectives both visible and actionable by identifying ways to measure progress of the objectives against agreed-upon targets. This begins to take the Strategic Planning Process from what can be an academic into a tactical plan for achievement.

Cascading Balanced Scorecards where your organization builds a more comprehensive framework upon the foundation of the Top-Level Balanced Scorecard by creating layers of linked, related, but not identical versions of the Balanced Scorecard, down and across the organizational hierarchy. This results in organizational linkages and alignment to strategy, as well as a means for achieving cross-functional strategic goals.

IMPROVEMENT
Performance Improvement during this stage, your organization learns to systematically identify the root causes of critical performance gaps (made obvious through the cascaded Balanced Scorecard framework) and then execute improvement initiatives to permanently remove the root causes. By focusing improvement efforts on the priorities identified in the Balanced Scorecard framework, rather than on bubbled-up fire-drill issues, your organization learns to apply its valuable resources to the highest impact needs.

Scorecard Business Reviews where an organization’s business reviews transform from superficial examinations of stale reports into productive, real-time, scorecard-based reviews that allow executives and managers to drill down from high-level problem areas, across and through contributing factors to ensure root causes have corrective actions in place.

CONTROL
Process Management where leading, causal measures are identified, performance or process improvements are locked-in, and all information needed to manage the business process successfully and predictably are identified.

Employee Goal and Compensation Alignment where employees work with their supervisors to develop personal-level goals, such as training and development objectives that will contribute to departmental and organizational needs and strategy, rather than the typical employee development goals, which too often focus on an employee’s unrelated interests. Ideally these should be tied into incentive compensation programs, further emphasizing how an individual’s contribution impacts the organization’s top- and bottom-line performance.

Budget Integration where Strategy Execution is truly integrated with the day-to-day business operations and their financial foundations. This stage ensures that performance and process improvement projects deemed necessary for executing the current year’s strategy have the appropriate resources allocated.

As you can see, organizations cannot flip a switch and achieve Enterprise Strategy Execution overnight. Rather, it is much more of an evolutionary process, which must be approached in steps. Trying to tackle all of these areas at once is not feasible and rather counterproductive, since strategy execution requires the continual development of new skills and behaviors. But the good news is that each of these steps comes with incremental benefits. And an ongoing dedication to Enterprise Strategy Execution gives organizations the absolute best odds for long-term results.

Learn more about the specific tools, steps, and even history of strategy execution with the articles below, and visit ActiveStrategy.com for all of your strategy execution needs. No matter where you are on your own Strategy Execution evolution, we can help you improve your results faster.

About the Author

http://www.activestrategy.com/strategy_execution/index.aspx

Strategy Maps and Balanced Scorecard

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