Strategy 101: Key Factors for Successful Strategy Execution
February 2nd, 2009 by binnur
I previously discussed the challenges of building a successful strategy, and key areas where you need to build a foundation for your strategic plans to be successful.
From experience, I have seen strategies fail at various stages and for various reasons. Some common threads were:
- lack of ownership/sponsorship as the manager moved on to bigger & better things;
- organization’s inability to change;
- lack of excitement, momentum, push and motivation;
- poor transfer between functional groups;
- organization not willing to take risks;
- decision process and information flow is f*#!?d up;
- inability to move from powerpoint slides to real-life execution: conflicting interests, values and priorities;
This blog is focused on factors that are key to successful execution of your strategy.
Define operational structure
I am not talking about a new organizational structure. Many companies reorganize to execute strategy, without realizing that they have not defined the key operational elements:
- clear communication and enforcement of roles, responsibilities and accountabilities;
- recognition and rewards linked to performance;
- well understood decision making process;
- information flow to the right people at the right time;
I can’t emphasize enough the importance of establishing AND enforcing clear roles, responsibilities, ownerships and accountabilities for success. At the end of the day, roles and ownership responsibilities have to make sense. As an example, you can’t realistically be accountable for the schedule if you are not responsible for managing the features. Any program manager will tell you, Chewbacca does not live on Endor! Yet, for many firms, the linkage between roles, performance and rewards is still poorly managed.
I previously talked about RACI and the concept of Decision Quality. Drucker also outlined seven elements for effective decision making: determining if a decision is necessary, classifying the problem, defining the problem, deciding on what is right, getting others to buy into the decision, building action into the decision, and testing the decision against actual results. A well designed metrics program will enable firms to focus on what is really important and what adds value, thereby improving the decision quality. However, your metrics, and your decisions are only as good as the information you have received. Establishing a good, unfiltered information flow at all parts of the organization, especially with the troops on the front lines, will improve your decision quality.
Stay agile and adapt
Today, being agile and quickly adapting to changing circumstances is more important than ever. Along the same lines, your strategy process needs to be agile and adaptable. Traditional processes where all the information is well known and understood are not viable for entering into new markets or developing new products.
Assumption-based strategic planning processes, such as Discovery-Driven Planning, enable organizations to understand what they don’t know but need to know, and forces a discipline of learning and retesting. Also, understanding your risk profile and communicating with your organization will not only improve your decision making process, but will also save time and prevent disappointments.
Manage white space
A strategy almost always look great in powerpoint slides, with full color, pictures and 30 point bullet lists. Powerpoint slides assume a perfect world where everything will be just right. Yet, the real world is full of white space, a fuzzy space where you don’t know what you don’t know, where things are vague and very gray.
Hand-offs, such as with technology transfer or R&D to manufacturing, should be a key focus area. Maintaining the energy, passion and momentum is key to success. Having shared purpose and rewards help, but ensuring continual ownership and accountability for performance is a must.
So, learn to manage this white space and reward those that do. For ideas on managing white space, check out my previous article: Two sides of the same coin: Managing white space.
People.. People.. People
The success of your execution is dependent on people: your team, your firm as well as the larger ecosystem of suppliers, service providers, labor unions, partners, … Each group comes with their own values, motivations, priorities and goals. How effective you are at managing this complex ecosystem and navigating the waters will determine your success levels. Transparency in your communication will help build trust and openness. A clear understanding of roles and responsibilities will support the decision making process and the overall agility of your organization.
As people, we have the tendency to resist change. Recognizing the complexity of change and developing an attack plan to address resistance will improve chances of success.
Technorati Tags: strategy execution, strategic planning
Classic mistake of forming Structure before Strategy. I’ve seen it time and time again where companies first form the structure then, through a cumbaya exercise, collaborate on a strategy. Why is this ineffective?
Strategy requires elements that are prescriptive — not wholly collaboration. One does not “collaborate” a troop into battle, the troop must be *led* to the battle field.
Strategy should always be first; form the structure after, with an eye toward execution.
I’m really amazed at how this same kind of information gets rehashed and redelivered over and over again. Is that because we’re too stupid to get it the first time, or because the market for this crap is feeding an endless supply of bootstrapping optimists?
Mike,
There is a big difference between knowing and doing. Many well established corporations struggle with bridging the knowing-doing gap, not just the bootstrapping optimists. We have to successfully execute the fundamentals before we are done with it. Firms that have successfully moved on from the fundamentals are now tackling issues of design thinking and sustainability.
Happy holidays!
–B