To successfully achieve business objectives, both the strategic planning and the strategy execution phases have to be successful. Brilliantly executing a fundamentally poor strategy or failing to execute a great strategy, both lead to failure. True strategic effectiveness means being good at both planning and execution.
Research from Harvard Business Review, shows that 67% of well-formulated strategies fail due to poor execution. With this challenging statistic, the impact of failing to execute strategy is dramatic for any organisation and its leadership team.
What are some of the hallmarks of strategic effectiveness?
In this short article, we have collated nine simple tips to help drive successful execution which we hope you will find useful.
1) Create total clarity and agreement on the objectives
Firstly, creating clarity about the objectives and the performance measures is key to ensuring everyone is aligned on the outcome sought. If the leadership team, non-executive team, shareholders and investors, etc do not agree on where the ship is sailing, the journey becomes much more difficult once you start executing.
2) Keep things simple
It is very easy to create many complex, sometimes multi-layer objectives. In our experience, the more objectives there are, the harder it is to focus, get agreement and then prioritise what really matters. This in turn seriously limits your strategic effectiveness.
Keep between 4 - 8 main objectives where possible, helps to ensure clarity, purpose and agreement across the leadership team which is critical before focussing on the all important execution phase.
"Everything should be made as simple as possible and no simpler"
3) Ensure objectives are balanced
Remember that while it can be easy or enticing to focus primarily on go to market and revenue objectives, many of the most effective organisations have a balanced set of objectives covering all aspects of the organisation.
Balanced scorecards areas include a financial perspective, internal business perspective (including operations, etc), customer perspective and learning and growth perspectives.
4) Formally plan strategy execution
When preparing to execute a strategy, we find it helpful to formally plan out the execution stage. For organisations that are used to executing, it can be very tempting to leap straight in to the process of justifying existing initiatives and programs. We have seen effective outcomes when the time is taken to properly consider the business capabilities required in future, assumptions, key milestones, review points, what if scenario modelling.
Execution is the hardest stage of strategy delivery in our experience so it warrants planning and discussion.
5) Consider your options carefully
An area we have seen add a lot of value is the stage of mapping out and agreeing strategic options once objectives have been achieved. The purpose of this stage is to identify the range of different ways an objective can be achieved, and which areas of the organisation (current or future) need to be involved in achieving each objective.
By taking the time to really brainstorm, the ability to create real innovation or radically different way of achieving the same outcome can be found.
Some organisations (particularly ones which are very adept at delivery and just want to get on with it) leap in to the first execution path that seems obvious, without necessarily considering alternative paths that could yield the outcomes in a much less risky or more cost-effective ways.
6) Consider the risks and assumptions with your chosen strategic option
How much is known about the strategy execution plan? Are there wild assumptions being made about the state of the market, customers or the proposition? If the way forward is not known very well, treat it like driving along a motorway in fog. Take it much more slowly and increase the evaluation cycles.
What if the way forward is not what you expected? How quickly can you pursue an alternative path? Another common mistake is to plough on regardless of when the information points to problems ahead.
Sometimes continuing is the right thing to do but do it consciously with all the information at hand.
Question - how open to changing strategic direction is your organisation? Is it politically damaging and seen as a failure or is it a sign of strength in the face of new knowledge?
7) Create alignment and buy in
Once a small set of candidate options have been created, we recommend planning how to get all stakeholders aligned and bought in to the strategy and its execution plan. All too often strategies fail due to lack of organisational input, confusion between departments, or failure to coordinate with other aspects of your business.
Sometimes competing requirements mean that critical stakeholders do not have the bandwidth to be able to support the strategy and higher-level prioritisation is required. This could potentially have been avoided at the outset if all senior stakeholders buy in to the approach.
In our experience, successful organisations link their strategy execution to all aspects of their business, including finance, human resources and operations, to ensure they have the capacity to execute your strategy however they want.
It is also important to ensure that team remuneration and rewards are linked to the strategy and its successful deliver so that hearts and minds (and wallets) are all focussed on successful outcome.
8) Be agile and flexible in the way it is executed.
It’s an old adage that ‘the best laid plans of mice and men often go awry’, and it couldn’t be truer in strategy execution.
It is unlikely that every strategy you execute will go perfectly according to your execution plan without a hitch. In these situations, in order to maintain strategic effectiveness, it is important to be flexible and adapt to any problems and challenges which may arise on the way.
Having a contingency plan is smart and you should make sure you’re aware of what you will need to do in any situations which cause issues in your execution.
9) Use strategy execution software.
Strategy execution software provides a game-changing capability to link complex execution plans to business objectives and outcomes and manage all aspects of execution.
It helps take the complexity and risk out of delivering complex, cross organisational delivery and ensure that all the work delivers against business outcomes.
We have created StrategyWorks, based on our years of experience helping our clients to build winning strategic execution plans. StrategyWorks can help your business to execute its strategies effectively, as well as allowing you to see your strategy’s performance against KPIs and OKRs.