Realizing Value From Your Strategy Execution
Do leaders and organizations, as a discipline, build in a review and analysis of the effectiveness in the execution of strategic goals? If not, they should! Harvard Business Review estimates that companies realize only about 60 percent of their strategies’ potential value because of defects and breakdowns in execution. Successful leaders know that strategy execution is just as important as the long hours spent creating the strategic goals in the first place. It’s oftentimes what sets an organization apart from its competitors in the marketplace.
The Strategy Execution Lifecycle
The strategy execution lifecycle can follow a basic curve not unlike traditional product development curves, and in some cases that’s exactly what it is. The difference is that execution can take many forms. Organizational changes, sourcing events, and shared service launches are, among many others, execution events. The organization was tasked with implementing a strategy based on prior work designed to innovate, lead, compete, and serve customers in the marketplace. We are often so focused on the product or service itself that we fail to conduct a post-mortem on the practice of executing that strategy. This review doesn’t prescribe KPIs and benchmarks, nor does it fit within a box that applies in specific circumstances. This is a moment to reflect and talk with leaders, managers, and individual contributors to evaluate what to do better in the future.
Benefits of Evaluating Execution
There is great value in monitoring and evaluating strategy execution, whether practiced in iterative fashion at set stage-gates or on the whole once a process is stabilized. Just as coaches reflect and make half-time adjustments, or spend time to “review tape” leading up to a new game, managers can create an environment where their function “practices” execution. Reviewing the execution enables you to make tweaks to interaction points, invest in successful components, and consider removing restrictive components. The results of this practice can enable organizations for future success by:
- Building a mindset of iterative, continuous improvement
- Learning from small mistakes (or complete failure)
- Adjusting expectations at strategy development
- Identifying levels of organizational readiness
This problem presented itself at a recent client where the stakeholders effectively had blinders on to a new, innovative offering they provide to customers. A new technology was being held up as an example of fast-moving change and other products were being offered on their platform. Based on original analysis and ongoing work, the product felt like a profitable one.
Slowly, as the product grew in size and strategic importance, it no longer became a focused platform but a core offering that required significant cross-functional interaction points and support. Only when ownership of the platform changed did the questions start coming up. How profitable is this platform? Is it poised for growth? How do we know our strategy is effective? The answers turned out to be a single resounding “We don’t know.” A brief assessment in collaboration with Thought Logic determined that it was in fact not profitable but had multiple points of misunderstanding regarding the work being performed by employees and contractors. Our second assessment went a couple levels deeper and found:
- Poor project governance from leadership
- Low reporting or transparency to the commercial viability
- Uncontrolled development expenses
- Work not properly allocated
Once our recommendations were delivered, we at Thought Logic then considered: What could have been done to prevent this? Hindsight, is of course, 20/20, and no one is above making mistakes. So, how can an organization take an objective look at the full execution lifecycle and build those lessons learned into the next execution event? Would this client have benefitted from evaluating the original execution when there was a strategic shift rather than move forward in a similar manner?
Five Thoughts on an Execution Review
Strategy execution has to compete with the day-to-day demands of running the business, and before long you see your resources getting shifted to the most pressing business needs. So how do you overcome the implementation challenge? Here are five thought starters to help ensure successful implementation of your strategy.
Use a third party: This can seem a bit self-serving coming from a consultant, however one doesn’t necessarily need to seek out a consultancy to run the process. Lately organizations have been employing internal improvement groups that move from project to project not unlike a traditional consultancy. If that’s not available, requesting support from another function for the review would be beneficial, and it may even improve knowledge networks across the organization.
Inventory project barriers: Leaders need to be proactive and develop plans to address potential barriers to strategy execution. Of course, we can’t always foresee what we’ll have to overcome, so inventorying these barriers could provide interesting insights regarding your overall execution readiness. Project barriers to be on the lookout for include lack of leadership, PMO bloat, excessive distractions, lack of systems, questionable partnerships, limited staffing, inadequate role clarity, and impractical planning.
Don’t ignore culture as an enabler of success: It can be challenging to get employees to change existing behaviors deeply rooted in workforce culture. But without modifying values and behaviors – the inputs that build a culture – lasting improvement is impossible. Humility and respect go a long way to productive relationships.
Use organizational politics to encourage change: Be aware of organizational politics – both the good and bad – that exist in your organization. Political behavior allows differences to be shared and methods to be employed in strategy execution that go beyond the rules and norms of the organization.
Make results transparent: This is not a time to sweep your problems under the rug or make the power move against a political enemy. Ten years ago, I was an analyst at Georgia Pacific, where MBM culture promotes intellectual honesty, a respectful challenge process, and open experimentation. It was eye-opening to watch senior leaders have difficult conversations in a productive fashion. As a 25-year-old analyst I was stunned that I was witness to some of these discussions. That wasn’t the norm all of the time, but it is possible to openly talk about our shortcomings in a respectful, productive way.
If you don’t want your organization to fall victim to the pitfalls of strategy execution, consider incorporating a structured review cycle into the execution timeline. The review cycle can enable a culture of self-awareness and continuous improvement that drives strategy execution success. The review cycle is an objective evaluation that can promote stronger business cases at project inception and form stronger KPIs for commercial or operational success tracking. It can also further hone the development of the strategy informed by goals that were achieved.