Less than 10% of strategies effectively formulated are effectively executed. - Fortune Magazine
Recently I worked with a leadership team on the end phase of developing a strategic plan. We kept crossing back and forth between finalizing the development of strategies and goals and beginning to implement those elements. We would dive into execution detail, catch ourselves, and then elevate the conversation to finish the strategies and goals.
Being in that moment started me thinking about the best practices for executing strategy. And, experience being the best teacher, I realized that the best resource for identifying pragmatic best practices was to turn to clients who had developed visions, values, goals and strategies, and were now focused on implementing those strategies. In a series of interviews, I asked them to reflect on the practices that lead to successful outcomes and measurable progress toward organizational goals. Turns out, it is never a straight line.
In this edition of Changing Times, we focus on those practices that have led to success. Because organizations' strategic plans are highly privileged information, we have kept the identities of our interviewees and their companies anonymous. We thank them for their contributions to making this newsletter relevant. Here's the good advice they offered
Best Practice #1:
Design your strategic planning process with the intent for execution.
One client noted that, in retrospect, their process should have been called: "strategic planning and implementation." He noted that when the plan was written, there was a huge collective exhale, "as if we were done. In fact, the tough work was just beginning." His organization has since learned to seamlessly meld conversations about strategy with the work to execute them.
In their book: Execution: The Discipline of Getting Things Done, authors Larry Bossidy and Ram Charan note that "an astonishing number of strategies fail because leaders don't make a realistic assessment of whether the organization can execute the plan." Management has to ask itself tough questions and have the courage to answer them realistically:
- How good are the assumptions upon which the plan hinges?
- Do we have the organizational capability to execute the plan?
- What do we need to do in the near and medium terms to make the plan work in the long run?
- Can we adapt the plan to rapid changes in the business environment?
- Do we have the right people in place to execute the strategy?
Here are some further insights from our clients' experiences:
- "We wanted to make sure we could implement our strategic plan so we designed the process with that in mind. We were in a time of transition in leadership and we wanted to make sure the new plan had the chance of standing the test of time and transition. As it turned out, our strategic plan was one of the things that attracted our new CEO to the organization. He had never seen a plan quite like it and so he bought into the plan before he arrived at his new job."
- "Once we were well into the process of strategic planning we realized that we did not have the organizational capacity to implement it. We simply did not have the level of skills and systems in place to execute our strategies. The first year or so we spent correcting weaknesses, rather than exploiting strengths. We focused our efforts on rebuilding the company in a more robust fashion. Now we are positioned for growth and strength. This recognition of weaknesses would never have surfaced if we had not gone through a strategic planning process."
- "You can stumble into the trap of thinking that when you finish the plan, you are done. But that is where the work really begins. You have to have a regular process to ensure implementation, and to reassess periodically and, if need be, recalibrate the plan."
- And finally, one client noted that the strategic planning process made his organization really think about "who we are and what we really wanted for the business. Up to the time of our strategic planning, very little thought was given to our future. We were at risk of losing company value permanently."
Best Practice #2:
Leadership must lead.
"An organization's leadership must buy into the strategic process and the outcome of the plan," said one client. In fact, in our experience, one of the few uniquely executive functions is to set strategic vision. To reach success, senior leadership must be integrally involved, and has to lead both the planning phase and the implementation phase. Senior leadership has the line of sight to see out into the future while keeping the whole organization in its peripheral view. It is their job to manage the tensions of allocating scarce resources to both the strategic and operational needs of the business.
Bossidy and Charan put it this way: "A contemporary strategic plan must be an action plan that business leaders can rely on to reach their business objectives. In creating it, you as a leader have to ask whether and how your organization can do the things that are needed to achieve its goals . To have realism in your strategy you have to link it to your people process: Do you have the right people in place to execute the strategy? You've got to link your strategic plans specifics to your operating plan, so that the moving multiple parts of the organization are aligned to get you where you want to go."
Here's what another one of our clients had to say about the role of leadership: "You have to have leaders who can see across the organization. You can't implement strategy in functional silos. Strategy, by its very nature, causes groups and coalitions of people to come together and think about improvement beyond what we can do on our own."
Best Practice #3:
Translate plans into manageable "bites."
A recent Harvard Business Review article entitled: Action Plans: The Architecture of Implementation, noted that leaders must be skilled at turning strategic plans into action plans, executed at the unit level. They set forth five tips for crafting action plans:
- Keep it simple. An overly complex plan will confuse and frustrate.
- Involve the people who will execute the plan. Implementation plans are more likely to succeed if they are not simply imposed on the people asked to push them forward. If the implementers are involved in developing the action plan, they'll be more dedicated to its success.
- Structure your action plan in achievable chunks. Build an action plan that is both manageable and achievable.
- Specify roles and responsibilities. Every planned outcome should be the acknowledged responsibility of one or more individuals. Those individuals should publicly state that they accept their roles.
- Make it flexible. A good implementation plan is a living document open to revision.
Best Practice #4:
Weave strategic thinking into day-to-day operations.
Balancing short-term business issues with strategic vision challenges many organizations. Here is how several of our clients have approached this challenge:
- "It is the role of leadership to bring balance between the day-to-day and unplanned things that happen while still moving the ball down the field related to the strategic vision of the organization. Sometimes it's little victories and other times you can make great strides. But, you'll never do either if you don't assess your progress in a planful way."
- "Our strategic plan helped us identify new markets and helped us see how vulnerable we were because our market focuses were so narrow. So each day, we work to broaden our customer base."
- "Our values need to be reinforced in all we do - from developing employee rewards that are tied to our values to stepping forward and acknowledging when one of our values has been breached."
Best Practice #5
Measure progress - both financial and nonfinancial.
The late management guru Peter Drucker was known for saying: "If you can't measure it, you can't manage it." No truer statement can be made for improving your odds of success in implementing your strategic plan.
The type of measuring system is not nearly so important as the fact that the organization has one and uses it rigorously. A number of our clients have adopted a balanced scorecard approach to measuring progress. Others have found successful approaches that tie part of the existing management reporting into strategic plan measurement. Still other clients have implemented a project management process that increases their ability to analyze opportunities and have higher levels of accountability.
All are designed around performance metrics that are both relevant and clear, and feature both financial and nonfinancial performance measurements. All link their strategic plans to their annual business plans and budgets. One of our clients recommended putting one person in charge of measuring progress: "Someone has to be the watchdog of the process."
Best Practice #6
Communicate, communicate, and communicate some more.
All your strategic activities must be tied together so that employees can understand the strategy and the progress toward the goals. Setting progress measures in terms that are relevant to employees provides them with a sense of how they contribute to the strategy.
Here's how one of our clients explained this best practice: "People understand the strategy when you do something that changes their world. For example, once they could see and experience lean strategy, everyone in the building understood the strategy better. We would not have gotten the same result if we had shown a slide show on lean manufacturing. You have to bring the learning and the execution close together."
Talk about your strategies - all the time. Make sure employees understand the organization's strategies and why they are essential. Talk about how you expect them to play a role in executing the project and initiatives that flow from those strategies. Provide updates at all-employee meetings, talk about it in all your staff meetings, track it in performance reviews, feature it in your newsletter, and keep it front and center as you go about your day, week, month and year. Results will follow!