Strategy Failure Runs Rampant

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You cannot be effective with a weak foundation.

Strategy Failure Runs Rampant – Effective Strategy Execution Explained

According to Robert Kaplan and David P Norton in the Harvard Business Review, an astonishing 95% of employees are unaware of, or do not understand, the strategy for their organization. This lack of understanding is a significant reason why a vast majority of even the best strategies fail, with some studies suggesting that up to 70% fail due to poor execution.

Don’t leave your company’s strategy execution to a roll of the dice. You can dramatically improve your chances of success by following a systematic approach that leverages four key elements:

  1. Create three to five strategic initiatives
  2. Get everyone engaged and aligned
  3. Assign executive leadership for each initiative
  4. Make refinements and course corrections

Let’s look closer at each of these steps.

Creating strategic initiatives

You cannot be effective with a weak foundation. You must start with three to five strategic initiatives that are the top priorities for achieving the vision of your organization. Specifically, your executive leadership team needs to craft a strategy using a rigorous process that includes:

  • Stakeholder Input: This includes owners, executives, employees, customers, suppliers, and the communities where you operate.
  • SWOT (Strength, Weaknesses, Opportunities, and Threats) Analysis: An objective assessment of your organization in terms of internal and external factors.
  • Value Stream Assessment: The evaluation of your critical business processes and how you deliver value to your customers and other stakeholders. Determine how well your processes meet customer expectations and how cost effective they are at delivering results.
  • Planning Retreat: A time for your executive team to debate and discuss the critical inputs; refine the vision, mission, and values for your organization; and then identify the strategic initiatives required to close the gap between where you are and where you want to be.

This first element in effective strategy execution is critical. If you do not have a great strategy in terms of well-formulated strategic initiatives, you have no chance at implementation.

Get everyone engaged and aligned

The next key element is to get everyone engaged with the vision, mission, and values.

  • Engage the Team: Take the output from the executive planning retreat and communicate it to everyone in a manner that will generate excitement and commitment. Each strategic initiative needs to be clearly articulated.
  • Implement the Stop List: The big opportunity for many organizations is to evaluate current projects that do not align with the new initiatives and wind these projects down quickly. This will free up resources and send a message that the new strategy is the only game in town.
  • Measurement Workshops: Performance measurements need to be reviewed and aligned with driving behaviors. The vision should have been developed in terms of a balanced scorecard, and this will provide an excellent format for the review and adjustment of other performance measurements.

Assign executive leadership for each initiative

After everyone is engaged and aligned, the next step is to take a disciplined approach to managing each strategic initiative.

  • Initiative Workshops: Each initiative begins with the executive sponsor directing the development of the business case and securing resources in terms of people and other expenses required to succeed. A formal launch meeting will bring the team together to review the business case and develop a list of required projects that run 60 to 90 days and deliver frequent incremental results.
  • Improvement Projects: All improvement projects need to be directly linked to and sponsored by one or more of the strategic initiatives. The scope for each project should be clearly defined and the project team organized for success.
  • Individual Plans: Most value-added work comes from individuals working as part of a team. It is critical that action items for each project are assigned to the right individual and that these people have the time, talent, tools, and desire to accomplish the task at hand.

This element is the workhorse when it comes to effective strategy execution. It as an absolute imperative for each strategic initiative to have a fully engaged executive sponsor. This does not mean the executive sponsor is in every project team meeting or that they need to approve every decision. It does mean they are committed to success and have prioritized their workload accordingly.

Make refinements and course corrections

Turning initiatives into projects with action items will get you off to a great start. But then, something somewhere changes and you need to react. You must have processes in place for the routine assessment of your progress and the ability to make course corrections to meet new challenges and new opportunities.

  • Performance Review Meetings: The balanced scorecard of performance measurements should be reviewed monthly. Those areas with poor performance require root cause analysis and development of action items to correct the root cause.
  • Quarterly Individual Plans: The action items and projects related to each strategic initiative should all be tied to individuals along with a quarterly review process. Success should be celebrated, while issues with meeting deadlines will need root cause analysis.
  • Quarterly Initiative Reviews: The status of all strategic initiatives should be reviewed once a quarter. There should be significant progress in terms of completed projects and new projects. This also provides an opportunity to adjust resources or react to changing conditions.

This element could be the silver bullet in terms of effective strategy execution. A disciplined approach to routine reviews allows for timely refinements and course corrections.

Summary

Leveraging the four key elements of effective strategy execution will dramatically improve your chances of success. The imperative for all organizations is to take a systematic approach to strategy execution that clearly outlines strategic initiatives, engages and aligns everyone, provides leadership and includes a process for analyzing progress and making course corrections where necessary.

 

Additional Reading

How to Achieve Operational Excellence in the Private Equity Industry
Three Key Factors for “C-Level” Executives to Contemplate

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