ValuExecBlog

Strategy Execution ~ More critical than ever

As we move into 2012, companies will find that strategy execution will become more critical than ever. The pressures on senior managers to deliver on their promises to their key stakeholders is going to be immense because they are going to find that there is no where to hide. This pressure will flow down through the organization ensuring that everyone will feel it regardless of what level in the organization they are. Those that don't execute well, will be moved to other pastures.

The chaos in world markets throughout 2011 bought senior managers time - time that they will find they don't have going into 2012. This is an exciting time for companies and I sincerely believe that those that execute well will be rewarded and those that don't will spend the next 5 years playing catch up. We will see a new pecking order emerging amongst companies. Companies will shed strategy execution tourists and embrace talent that want to contribute.

Yes, this is an exciting time for us all. Wishing you a wonderful and prosperous 2012.

Yours in execution.

ian

Strategy Execution from the heart

You might have guessed it by now, but I am passionate about strategy execution. I feel it every time I go into a company and am told that plans are not being met because of poor execution as a result of people, or processes or even customers. We know from research that companies lose about 40% of strategy in execution, so it stands to reason that there is so much to be gained if corporate leaders simply focused on the execution of strategy. But unfortunately, research again tells us that leaders tend to spend 85% of their time on operational issues, i.e., putting out fires, rather than on execution.

With all the doom and gloom that we are reading about in the world press today, it is easy to become like the proverbial rabbit caught paralyzed in the headlights of an on-coming car, and it will take every effort to move out of the glare of the headlights and into the safety of the unknown. And that is what makes it all the more exciting. Safety can and will be found in the unknown and not in the known. Safety will be found not with what makes us comfortable but with that which makes us uncomfortable.

If companies want to survive, they will need to improve their execution. And for those of us who are passionate about execution, we will need to find alternative ways that we can bring to companies to help them execute better and faster; ways that are not complex, but are customized to suit the particular company, its people, processes and its customers. One-size will not fit all.  

Yes, Siree! I am looking forward to an exciting 2012.

Yours in execution.

ian 

Strategy Execution is like Golf

Executing strategy is like playing golf. One day, you can have a great game and the next day, just when you think you are mastering the sport - you can have a shocking round. What makes golf the ultimate experience is that no two rounds of golf are ever the same. Natural elements change; what happens between your ears changes; where your ball lands on the fairways or on the greens is never the same and your approach to the flag is never the same. But you do the best that you can with the skills and tools (your clubs, etc) that you have on the day. And so it is with strategy execution. Nothing is ever the same from one day to the next let alone from one year to the next. And so you make do with the skill sets and tools that you have. 

 Before you hit a shot in golf, you have to be aware of every element that might impact how you hit the ball and where it might land. It is the same with strategy execution. Know the course you are playing; which way the wind is blowing; which elements will come into play, what clubs are in your bag and make sure you get yourself a great caddie.

Yours in execution.

ian

The Strategic Principle: Why you need it!

A challenge that confronts every company at some point is: How do you give employees clear strategic direction whilst at the same time inspiring flexibility and risk taking?

Successful companies do this through a strategic principle which is an actionable phrase that distills a company's corporate strategy into its unique essence that is then able to be clearly communicated throughout the organization. A strategic principle is not a mission statement. It drives the company's strategy; it is action oriented and it enables frontline employees to act quickly by giving them explicit guidance to make strategically consistent choices.

In their article "Transforming Corner-Office Strategy into Frontline Action" (Gadiesh.O; Gilbert. J.L; Harvard Business Review; May 2001), the authors suggest that a strategic principle has 3 defining attributes:

1. It forces trade-offs between competing resource demands;
2. It tests the strategic soundness of a particular action; and
3. It sets clear boundaries within which employees must operate while granting them freedom experiment within those constraints

Examples of strategic principles from well-known successful companies are:

• Dell : Be direct
• eBay : Focus on trading communities
• GE : Be number one or number two in every industry in which we compete, or get out
• Wal-Mart : Low prices, every day

And then there is our own at Valufacture Solutions which is to 'Create outstanding value.'

Now, more than ever where competitive advantage rests with a company's talent, the creation of a strategic principle and then communicating it throughout the organization is crucial to a company's success. So, how clear is your strategic principle to your employees?

Yours in execution.

ian

 

 

 

Work-life-Strategy Balance

Unashamedly I have been a believer in the work-life balance movement. However just when I think that my life is in balance - disaster strikes. One aspect of my balanced wheel suddenly takes on my undivided attention to the detriment of all others and throws everything out of balance. And so the quest to get my life in balance starts again.

Recently, I started looking at the lives of people who have made a difference in this world and from what I can see, very few of them had their lives in balance. Most, if not all of them, were consumed by one burning passion; one burning drive that seemed to take over all other 'balanced' aspects of their lives. So, my question is this - does this whole work-life balance thing strip us of our ability to make a huge difference in this world?

How does it apply to strategy? I am in two minds. First, we have seen in organizations that people try to balance what is required in their day-to-day jobs with what they are required to do in executing strategy - they try to get the balance right; but in the majority of cases, they fail and strategy execution takes a back seat to what they are comfortable with, namely what they have been doing daily. Secondly, perhaps one of the most exciting times that I have had is when I worked for a small advertising agency and we were pitching for the business of potential clients. The passion and energy in the agency was electric. We were 100% consumed in getting the business. As a result, some of the day-to-day activities took a back seat.

The task is to know what is important and what to give up and then have the support that allows you to do so. What are your thoughts?

Yours in execution.

ian

Strategy Execution 1-0-1

Company executives do not believe that they have an issue in formulating strategy. The issue is rather in the execution of strategy. At least that is what recent research would have us believe. But whereas a brilliant strategy may well see them dive into blue oceans or float around in white space, it is only the solid execution of that strategy that will keep them there.

The problem is many executives have an over-reliance on structural change as a solution to cure their woes. We are after all a species that has a very short attention span and structural changes with their resulting short-term cost savings show up quickly on financial statements. However, these do tend to be short term and the layers have a knack of finding their way back into the organization.

In their article 'The Secrets to Successful Strategy Execution' (Neilson.GL, Martin.KL, Powers.E; Harvard Business Review; June 2008), the authors argue that the two levers of 'Decision Rights' and 'Information Flow' are far more powerful than structural change in the execution of strategy. Executives need to ensure that everyone in the company knows which decisions and actions they are responsible for and they also need to make sure that important information about the competitive environment flows quickly to corporate headquarters so that the top team can identify patterns and promulgate best practices throughout the organization.

And therein lies the challenge. As I have said previously, clarity of decision making is not the norm in most organizations and neither is the quick flow of key information both into and out of head offices. Nevertheless, fix these two issues and executives may well find that strategy execution is no longer a problem. 

Yours in execution.

ian

The 4 Critical aspects of strategy planning that impact execution

It is that time of the year again when key executives either spend the next few days at some venue off-site or lock themselves away in the Corporate boardroom formulating their strategy for the next year or 3 years. Usually they emerged feeling enthused about the direction they have elected to take the company, or they emerge anxious at the daunting task ahead of them as they set about achieving the returns promised to various stakeholders of the company. Whichever emotion they emerge with, there are 4 critical aspects of  strategy and strategy planning that they should bear in mind:

1. Sound planning and clear, focused strategies at both the corporate and business levels are critical
2. Corporate and business strategies need to be integrated. They can not be pulling in opposite directions
3. The key operational components of the strategy need to be clearly defined and communicated together with the metrics used to measure execution results
4. A clear understanding of the resources and skills required if the company is to achieve the Strategy and the impact on the whole organization in providing those resources and capabilities

Should any executive emerge from their days of formulating strategy without giving a huge 'tick' next to each of these 4 critical issues, then you can bet that they will have trouble executing strategy from day 1.

I will tackle each of these 4 points over the coming weeks. Until then:

Yours in execution.

ian

Employee Engagement

The bottom line is ~ if your employees are not engaged, then you can kiss strategy execution goodbye. As simple as that.

Research conducted by The Institute of Work Psychology at Sheffield University in 2001 over a 10 year period studying over 100 companies found that people engagement practices were a better predictor of company performance than strategy, technology, research and development. 

Picture if you will 4 steps. The bottom step represents 'actively disengaged' people. These people seek to avoid work and tend to be driven by anger, ill-will and cynicism. The next step represents 'disengaged' people. They tend to work without enthusiasm and are driven by fear, uncertainty and doubt. The third step represents 'partially engaged' people. These people care about their work but for its own sake. They are driven by advancement and reward. The fourth and final step are your 'actively engaged' people. They care about the impact of their work on the company and are driven (and drive others) by passion.

Every time an employee climbs one of these stairs, the company unlocks new value. Conversely, every time one employee moves down a stair, value is lost. Employee engagement is the process of bringing your employees up the staircase. If managers are able to do this well, value will gained in the organization. But here's the clincher. Ask yourself - how engaged are you? What stair are you currently standing on and if you're not on the top stair, find out quickly how you can get there. It is so much easier pulling people up to where you are than pushing them above your head. 

Yours in execution

ian

Who has the D?

The title is not original. In fact it is taken from an article entitled ' Who has the D? How Clear Decision Roles Enhance Organizational Performance by Paul Rogers and Marcia Blenko published by the Harvard Business Review. Experience has repeatedly shown us that corporations that have strategy execution problems tend to have mirky decision-making processes. High performing companies make good decisions and make them happen quickly.

Rogers and Blenko provide the following Decision Diagnostic which is worth taking because it will provide you with a snap shot of how effective the decision-making process is in your organization:

Consider the last 3 meaningful decisions you've been involved in and ask yourself the following questions:

1. Were the decisions right?
2. Were they made with appropriate speed?
3. Were they executed well?
4. Were the right people involved, in the right way?
5. Was it clear for each decision:
   - who would recommend a solution?
   - who would provide input?
   - who had the final say?
   - who would be responsible for follow-through?
6. Were the decision roles, process, and time frame respected?
7. Were the decisions based on appropriate facts?
8. To the extent that there were divergent facts or opinions, was it clear who had the D?
9. Were the decision makers at the appropriate level in the company?
10. Does the organization's measures and incentives encourage the people involved to make the right decisions?

We are all called upon to make decisions everyday in our respective roles. Our successes, failures, opportunities won or lost are a function of the decisions that we made or that we failed to make. The next time you are given the opportunity to work on a crucial project or are in a position to influence the direction that the company takes in a particular area, glance over at the Diagnostic and ask yourself the 10 questions. They may well save you alot of time and money in the long run.

ian

Selling the Strategy

Before you can expect people to execute strategy effectively, you need them to buy in to it. In other words you need to sell it to them. Experience has shown me that executives spend very little time selling strategy to employees and by selling- I don't mean having 'town-hall' meetings. Let me explain.

Chet Holmes in his book 'The Ultimate Sales Machine' (The Penguin Group; 2007) suggests that at any point in time, 3% of people are 'buying now'; 6-7% of people are 'open to what you have to sell'; 30% are not 'thinking about it'; 30% don't 'think they're interested'; and 30% 'know they're not interested'. Let's assume, and I am not so sure it is a big assumption - the same percentages are true when it comes to employees and corporate strategy. The 3% would be the senior managers. They are buying now mainly because they had a hand in developing the strategy. Also, their careers are dependent on it as are their large bonuses. The 6-7% are the middle managers. They're one step removed from the core executive team but they see themselves filling their bosses shoes in the not too distant future. So they are open to strategy because they see its favourable execution as a stepping stone to getting to their next position. That leaves the 90% of employees who aren't thinking about the strategy or aren't even interested and who in the main - are the one's who have to execute the strategy.

Now I know I am being somewhat simplistic, overgeneralizing, and dare I say it, crass in suggesting that managers are only thinking of themselves or their bonuses - but the point I am trying to make is that too often, executives think they have done a good job selling to the 10% rather than doing the hard job of selling their strategy to the 90%. I believe that one of the reasons that strategy execution fails so often is because executives don't do enough to sell the strategy to the 90% of employees who aren't interested. 

Holmes argues that the way to bring the 90% into the fold is through 'education-based' marketing and I quote: 'The hardest thing we need to do today is to .....keep their attention long enough to help them buy your product. This approach of offering some education of value to them gives you a significant opportunity to attract more buyers and build more credibility. I call this "education-based marketing," and you will attract way more buyers if you are offering to teach them something of value to them than you will ever attract by trying to sell them your product or service.' (The Ultimate Sales Machine; Holmes C; Penguin Group; 2007; Page 65).

Next time you are discussing strategy with those who are responsible for executing it - try and approach the discussion from an education-based point-of-view and you will be surprised as to how quickly people will buy-in and support the strategy.

Here's in execution,

ian