I know - this is a rather indelicate question but it's an important one to answer if your organization is ever going to achieve its strategy execution goals and objectives. So let's proceed....
I think that we can agree that strategy execution excellence is elusive for many organizations at any moment in time. When you ask people what gets in the way of strategy execution success, they usually give you a long list of the typical challenges. While I agree that many things go into ensuring that your company actually implements the strategy you envisioned, I believe that it really comes down to three essential elements: content, infrastructure, and management capability.
What I mean by content is you must have an operationalized strategy with the right planning horizon in place (i.e. a long term strategy with aligned medium term goals), ready for implementation, execution, and refinement. An operationalized strategy is one where the actions required to actually bring the strategy to life are clear and obvious to every employee in the organization. There is no doubt in my mind that the strategy map is the best vehicle for clearly communicating a company’s strategy in understandable, action-oriented terms. However, a strategy map isn’t enough to support strategy execution excellence. Smart organizations will also align their business processes, projects, and resources with their business strategy and share that information with employees and other stakeholders. Aligning these key business elements with strategy serves several purposes: it ensures that your strategy is adequately supported (or not!) by core and strategic business activities and the required resources; and it helps employees connect their work directly to the business strategy via the aligned processes and projects they work in and/or contribute to. Translating your strategy into action is the first essential for successful strategy execution.
Strategy execution excellence also requires a robust supporting infrastructure including: assigned roles for the strategy execution and management process; an organizational strategy execution accountability framework; and a defined strategy governance framework.
Every successful strategy focused organization identifies an executive sponsor for their strategy execution and management activities as well as a strategy execution and management process champion or owner. The role of the executive sponsor includes providing greater insight into and new information on the strategy/strategic plan, and playing a strategy communication role between the executive team and the Board. The role of the strategy execution and management process owner includes: steering the performance measurement framework utilization, expansion, and improvement processes; defining strategy and performance management procedures and policies; coaching employees, leaders, managers, supervisors on your strategy; and facilitating enhanced cross-functional organizational integration and team work. These are the minimum roles required for a robust strategy execution and management infrastructure.
Strategy execution success won’t happen without an accountability framework including clear performance expectations that have been embedded in job descriptions and personal performance plans, and adequate resource supports for the fulfillment of these expectations. A variety of roles support the implementation and management of strategy including strategic objective owners, performance indicator data and commentary owners, project and process owners, and functional subject matter experts, with each making specific contributions to the strategy execution and management process.
The final required infrastructure element is a defined strategy governance framework that details: the performance measurement data and commentary collection process and timelines; regular performance measure review meetings (including objectives, agenda, and participants); regular strategy execution review meetings (including objectives, agenda, and participants); and the strategy change process (including strategic objective, strategy map, indicator, and performance target changes). Putting a certain level of formalization around these components of the strategy execution and management infrastructure increases the likelihood that an organization will actually put their strategy into action.
Much has been written about how to overcome the strategy execution challenge by leveraging these first two elements – content and infrastructure. Less time, however, has been spent on the role of management capability and its impact on strategy execution success. In my mind, there are four management capability pillars that must be in place for a company to achieve strategy execution excellence: committed and active leadership; expectations for accountability; living the strategy; and managing in a new way.
Committed and Active Leadership
Every recognized leader in your organization must understand, be knowledgeable in, and be committed to your business strategy, and what it takes to achieve it – even when it is difficult and challenging to do so. Successful companies also ensure that “non-sanctioned” organizational leaders (those people who don’t have formal leadership roles but who others look to and take their cues from) share these same attributes. However, this level of leadership commitment doesn’t benefit an organization unless it is visible and demonstrated to others. When leaders at all levels of an organization share their knowledge of the business strategy with others and actively facilitate and model strategy execution excellence, the likelihood of strategy execution success increases significantly.
Expectations for Accountability
Taking the time to link every key strategic action to a person who has responsibility for getting it done (right and on time), and assigning (often shared) accountabilities for results achievement, is an important part of establishing an organization’s accountability framework. However, simply establishing an accountability framework is not enough. It is also critical for management to establish clear expectations for accountability fulfillment and then reward (or penalize) people based on their commitment to accomplishment and actually fulfilling their accountabilities. In other words, being accountable has to truly mean something in your organization for your accountability structure to deliver any real benefits for your strategy execution efforts. Ensuring employee accountability in this way must be a fundamental role and requirement for every manager/leader in your organization.
Living the Strategy
Once your business strategy has been defined, it’s up to management to see that your organization actually lives it. This includes ensuring that the actions the company takes, its priorities, resourcing, and business decisions are always aligned with the values and business strategy of your organization – even when the pressure is on to do otherwise. While it is absolutely critical that the executives in a company exhibit this behavior consistently, strategy execution success can only be achieved when every person in the organization lives the strategy every day. Business leaders play an important role in cascading this imperative throughout the organization. However, people aren’t perfect and misaligned decisions and actions will happen. When it does, it’s important for managers to recognize, acknowledge, and accept that this has happened and then take positive steps to correct the situation. This is what it takes from a management perspective to truly live your business strategy.
Managing in a New Way
To achieve strategy execution excellence, leaders must manage in a new way – they must actually lead! Leading includes: establishing the playing field and boundaries for employees (i.e. your organizational value and strategy map); opening up the lines of communication across the company; facilitating, connecting, and integrating people across the organization; and then “getting out of the way” so that people from all over the company can create innovative ways of putting the business strategy into action.
Managing in a new way involves: looking out, looking in, and looking ahead; always asking “Are we doing the right things right?”; and thinking about the impact of today’s actions and business decisions on the future of the business – in other words, thinking strategically. Managing in a new way means helping employees at all levels of your organization begin thinking in this way and seeing that they have the time to actually spend on this as part of their regular work activities (not as an “add on” to their current job/work). Practically speaking, managing in a new way means asking employees knowledgeable questions, with a focus on strategy, in group forums and one on one situations about the fundamentals of their proposed strategy execution action plans, testing their validity, probing on action plan progress, and facilitating cross-organizational dialogue.
A lot of the discussion I see revolves around the “hardware” required for strategy execution excellence: content and infrastructure. Unfortunately, many organizations limit their strategy execution improvement efforts to these two elements because they are tangible and I think easier (i.e. less emotional) to address. However, experience shows that stopping here is not enough - investments in just the hardware side of the strategy execution excellence equation often deliver sub-optimal results. Not dealing with what is often perceived as the “soft” component of strategy execution excellence – management capability – severely limits the success and impact of your organization’s strategy execution improvement activities.
Smart (and successful!) organizations know that they must take a pro-active approach to ensuring that developing the required management capability fundamentals is a key part of their strategy execution management and improvement plans.