Strategy Execution Done Right
Intro
A great strategy or innovative product can put you in the spotlight for a moment, but you won’t last there if you don’t have a solid and strong execution. Filling in the gap between strategic planning and execution can be what's keeping you away from a proper strategic execution.
Having a good strategy is not even half the battle, the real struggle is executing your strategy and keeping it going. And getting to your target goal is not the end of it, you still need another strategy to move from that point on, and so on.
What is Strategy Implementation and Execution?
Strategy execution has become a hot topic within management. It is estimated that over 60% of strategies are not successfully implemented. Senior executives have revealed that effective strategy execution is one of their most challenging matters. If you’ve ever tried to execute a strategy, chances are you agree with this statement.
If you ask your manager what he thinks Strategy Execution is, he’ll probably answer something like “the successful implementation of a plan” or “follow through with your strategy”. These statements might be somewhat true, but it doesn’t really tell us everything that strategy execution entails and how to successfully do it to drive top results.
A more proper definition would be “strategy execution is translating an organization’s strategic initiatives into action”. It is the crucial step after a long planning process, and it is extremely important to do it right not just to make the planning process worth it, but to obtain the best outcomes.
Why is Strategy Execution Important?
To sum it up, big corporations and leaders spend hundreds of hours and dollars on strategic initiatives that are often not executed as intended. This can deprive customers of innovative technology or service if a company fails to execute a marketing or selling strategy to its target customers.
In the end, no matter how amazingly brilliant a strategy looks on paper, it can only shine when put into action in everyday activities.
Research indicates that over 80% of strategies fail. And they fail not because they're incorrect, they fail because they're not correctly executed. Day-to-day as people do their daily work, this work is not aligned to the Strategic objectives or priorities.
This results in a considerable waste of effort and resources as people from across the organization work in opposition to two other activities. A successful company relies not only on its managers’ shoulders, but also on their teams’; every employee no matter their position or hierarchy has an important role to play, and if one piece is not properly executing their job, the whole strategy could fail.
Dissecting a Strategy
It can be difficult to change your employees’ mindset from a fully operational framework to a strategic execution framework and getting everyone involved in what the whole company needs and how they fit into those needs.
Effective and successful strategy execution requires that their employees have discipline, and this is achieved through setting detailed and doable tasks to move the company strategy from paper into action. To achieve strategic goals, a strategy needs to be created through a strategic plan that can be followed.
Creation of the Strategy
Many companies struggle with growth because their strategies are based on wrong assumptions regarding what customers want, what their teams are capable of, or what the competition is doing. Not having clear information to plan the strategy will eventually result in bumps in the road that will only delay the execution and prevent the strategy’s success.
When creating your strategy, it’s important to test different scenarios, using mechanisms to identify and challenge strategic assumptions to get ahead of whatever issues are possible to appear and prevent implementation.
Strategic Planning
Often organizations hold strategic planning meetings spending hundreds of hours, and therefore, money. But all of these efforts can go to waste when there are not clear strategic goals and target alignment throughout the organization, preventing a successful execution of the organizational strategy that took so many hours to plan.
Do not miss the main focus during the strategic planning process, choose a vertical alignment going through corporate and business units, and choose a horizontal alignment across business units and operational ones. When discussing the strategy with your teams, be specific regarding the objectives and roles for everyone in each business unit.
Keep in mind that every hour held to the strategy development should be put to good use, so leave no room for confusion. It takes way less time to get aligned than it costs not to be; each quarter people have 530 hours to contribute to victory, and it takes about 5 hours to set proper OKRs that maximize their contribution.
How to Execute a Strategy Successfully?
Yes, everyone is a key piece when it’s time to execute a strategy, but it is up to the corporate leaders to verify everything is going according to plan; and this strategic plan could sometimes shift depending on the ever-changing markets. We cannot always predict how the market is going to react or respond to different situations, but we can anticipate ourselves with backup strategies and preparing our senior leaders to face these emerging threats and not waste precious time working on a strategic plan that’s bound to fail eventually.
The techniques listed below are intended to help managers understand the complexities of strategy implementation and to provide guidance on the aspects that will help companies achieve a successful strategy execution.
- Ensure that plans are aligned with the organizational mission, vision, and core values
If your organization’s strategies exhibit behaviors that are in conflict with your values, you will see a gradual degradation in your culture and engagement, as your employees see that you are “just kidding” around your core values. - Build an effective leadership team
Determine your team's work strictly in terms of its end goal - what is the outcome this team is chartered to deliver? Once we've determined where we are going to drive the bus (what the goals are for this team) we can then sort out who are the best people on the bus to sit in which seats (who should be playing what roles in the team in order to drive maximum effectiveness). - Create an implementation plan
Setting your team’s implementation plan depends on the people that make up the team, play to their strengths, and set OKRs with realistic deadlines. Have frequent meetings to analyze whether the implementation of the strategy is going according to plan or if there is a need to make changes. - Allocate budgetary resources
It’s common for companies to try to execute a strategy working their way around budgeting, and even though it’s important not to splurge, don’t be afraid to allocate the monetary resources when needed. You could end up spending more money making up for the mistake of not budgeting from the beginning. - Assign objectives and responsibilities
This may sound self-explanatory but keep in mind that sometimes we think some responsibilities and objectives are intended within others, but remember you can’t leave any grey areas when executing a strategy. - Align structures and end-to-end processes
Without the alignment of end-to-end processes, you risk customer satisfaction. If your organization is structured as functional silos with little interaction, you’re likely to buy or build different systems for each department that also communicate poorly. Maintain communication to align structures throughout the organization and find success from start to finish. - Align people
Aligning your people starts from your company’s core values all the way up to their goals and tasks. Without a strong foundation, you won’t be able to align everyone towards a common benefit. - Communicate the strategy
As obvious as it sounds, you can’t expect your team to execute a strategy successfully if it’s not well communicated. We’ll go deeper into this point later in the article. - Review and report on progress
Make sure to set weekly or biweekly meetings with your team to review progress and make thorough reports. This is the only way to make sure your strategy is on its way to success and to fix whatever challenges come your way. - Make strategic adjustments as necessary
Don’t be afraid to re-strategize. Even if your team is performing well, there can be outside factors that can negatively affect your implementation of the strategy. Every time you review your progress, analyze if you should make adjustments. - Develop an organizational culture that supports the strategy
The culture of a company is the backbone of every process and department, it defines the personality of your organization and represents your values. This backbone needs to support not only your organization but the way to execute your strategies.
Having a system to monitor the performance and development of the company's strategy is a key element for successful strategy execution and achieving strategic goals. When assigning your employees OKRs and/or KPIs, hold them accountable and ask them to keep you updated on their performance. Using a project and performance management dashboard can determine if underperformance is the result of a shift in the market, a misleading strategy, or simply poor execution from your team.
Communication
A lot of the problems companies face today revolve around a lack of communication. Sometimes we aren’t clear enough, sometimes we are afraid to ask questions or have a hard time admitting we don’t fully understand what we have to do and just wing it expecting the best results… which obviously doesn’t work out.
But the truth is that to execute a good strategy, its implementation completely depends on a 100% understanding (and supporting) of such strategy. Still,
Behind a successful strategy implementation lies an effective communication strategy, one that motivates employees to thrive and avoids resistance from employees to perform satisfactorily.
Employee Engagement plays a huge part here. Remember that engaged employees transmit motivation to their peers, and an employee committed to a specific business strategy can get more support towards it from other employees. Maintain a two-way communication channel between key managers and employees to continue motivating and engaging employees in order to achieve the company’s strategic goals.
Organizational Resources
Unfortunately, it’s common to see many companies failing to allocate resources strategically for the implementation of strategies. A common mistake is to heavily rely on the creation of the business strategy, planning, and OKRs and KPIs implementation. But what about the loopholes?
Research shows that
There’s always one or more areas where the performance is poor or there’s a lack of coordination on a strategic plan. The result of poor coordination is a substantial reduction in the overall capacity of the organization, and this is becoming quite an issue.
An increase in the cross-organizational dialogue and careful communication between departments can thoroughly help identify these deficiencies and conflicts before they happen.
Addressing Efforts
There are four areas organizations need to address to easily improve the likelihood of a successful strategy execution:
1. Accurately cascade the strategy down the organization and/or build the strategy up from the grassroots. This is not the ongoing debate about whether the strategy should be talked down or bottom-up, but rather the need to ensure strategic alignment whether it is established from the top-down, or bottom-up.
What we see frequently is a strategy set at the top, such as “enter new markets with our existing products” gets restated and restated and restated as it's cascaded down the organization, and by the time it is reviewed at the front line that same strategy is articulated as “grow our existing markets with new products”.
This is reminiscent of the child game “broken telephone”, whereas a story gets repeated from child to child and it gradually changes, until it ends up being something either somewhat or entirely different.
2. Clearly setting corporate priorities. Not all of the organization’s strategic objectives are equally important. It is critical that the organization understands which objectives are more important. Moment-to-moment departments, teams and employees are making strategic decisions between doing activity 'A' and activity 'B' without the proper framework to make an informed decision. Again, the output here is misalignment across the organization and employees working in opposition to each other.
It is also important to note that these strategic priorities shift over time. Back when many of the foundational business books and practices were established, for example in the 1960s with Peter Drucker, a philosophy of annual strategic planning was established. With the current pace of business and business turbulence, we feel that in many cases even a quarterly strategy update is too infrequent. The COVID lockdowns of 2020 are a classic example where annual or even quarterly strategic refreshes are too infrequent.
3. Strategic goals and objectives need clear owners to ensure success. People need to know what they're accountable for, and even the type of accountability they have. This is where Concepts like RACI and RAPID allow for clear role clarity and responsibilities. Frameworks that ensure all of us work the right way on the right tasks.
4. Establishing a learning organization. Someone once said, “every strategic battle plan fails on first contact with the Enemy” (not the exact quote from Helmuth von Moltke the Elder). The same happens in your organization. Day to day as the markets change, your product development process moves forward (or not), competitors enter and leave the market, etc., the plans you made at the beginning of the year quickly get outdated by day-to-day events.
It is critical that you build into your organization the ability to quickly gather data, put it into strategic contact, learn from what is recorded, and act with agility in response. This practice of agile management will differentiate the winners from the losers.