This week, I am going back a bit to dive deeper into strategy – actually, the execution of strategy – because I was reminded, yet again, of how much time and effort companies spend in developing and refining corporate strategies, only to find themselves overwhelmed while struggling to translate strategy into an effective operational plan that will facilitate long-term success.
Frequently, organizations strain even more when it comes to prioritizing and executing these plans. I have lost count of the number of executives I have spoken with that firmly believed they had winning strategies, yet those strategies never delivered the game-changing results that the leadership team thought they would. Failure to deliver on strategy is a pervasive problem in business today – studies consistently show that 60 to 80 percent of companies fail to successfully implement and secure the success they anticipated in their strategic plans. The ability of a company to effectively execute strategy and achieve long-term adoption remains sporadic, at best. The fact remains – there is an enormous gap between strategy and execution.
The inability to successfully execute strategy is more than a just a source of frustration; it has the capacity to severely cripple the business. Not necessarily learning from past experience, companies continue to launch often unrelated projects across the organization, believing they are addressing the operational issues. These initiatives may help to a limited extent, however because they are incremental in nature and disconnected from the organization as a holistic unit, they only have the capacity to address a small fraction of the organizations challenges. Companies typically have no clearly defined process in place to ensure they have chosen the right starting point and the best (and most complete) set of strategic initiatives for the entire organization. Well-intentioned, but disconnected and inadequately aligned efforts can be counterproductive, with some inherent outcomes you may recognize:
- Missed goals and/or delivering unintended results
- Lack of leadership engagement causing fragmentation from a holistic standpoint
- Project delays due to lack of resource planning
- Implicit endorsement of informational or functional silos
- Conflicting priorities across the organization
- Lack of clear and measurable business objectives that tie strategically across the organization
- Inability to link strategy to specific operational initiatives
Okay, true enough you say, but how can organizations successfully leap over this potentially fatal gap? First and foremost, leaders need to understand that there is a natural tension between strategy and operations. The failure to balance that tension results in the breakdown of management systems and processes – but is not necessarily a reflection of the leadership teams ability to perform or the amount of effort put forth. It is, however, a critical factor in corporate underperformance and will drive poor execution.
In order to overcome the challenges inherent between strategy and execution, leaders must understand that the solution to the inability to execute is a separate issue from the validity of the strategy. A well-defined strategy is actually only one element of the solution. The real goal is to create a process that allows fluid movement between strategy and operations. This provides an executable implementation plan that enables the organization to realize strategic value faster, at a higher caliber, by executing high-impact projects in the right sequence in order to generate maximum business results. This is a transformative process that has the potential to create comprehensive initiatives that enable significant change, while driving the organization, as a cohesive unit, toward a game-changing future.
A comprehensive playbook of aligned opportunities can be organized under five critical success factors: 1) Customers 2) Organization 3) Products/Services 4) Systems and 5) Value Chain.
Variations on these five CSF’s are ranked according to their potential for success and their impact on the company’s game-changing future. The playbook should detail the specific sub-categories for each CSF, identify the unifying factors across functions, and ensure effective coordination and alignment to significantly impact the company’s ability to win. An open and well communicated playbook will also provide everyone with valuable perspectives they would otherwise not see from their vantage point – specifically detailing their position on the field, what is expected of them, and the value they add to the team.
There are significant challenges in translating strategy into a very real game-changing future. However if a logical, intentional, organic process is continually deployed to link each CSF in the playbook across every business unit, all of the initiatives within the strategic plan will tie strongly back to achievable goals leading to sustainable competitive advantage. As a result, the organization ultimately creates a portfolio of realistic, actionable projects that drive toward that game-changing future. Just as with individuals, organizations can only become exceptional in the process of delivering exceptional results.
Please engage the discussion and let us know how you mind the gap between strategy and execution in your organization. Please feel free to contact me at Sheri.Mackey@LuminosityGlobal.com or by visiting our website at www.LuminosityGlobal.com. Check back next week for the next post on Leadership Across Boundaries and Borders.