If your organization is like most, it is finalizing the planning process for next year. Undoubtedly, like many executives with whom we've spoken, you've been spending countless hours developing your strategy. We often hear from those same executives that their plans regularly fall short of expected results. Study after study shows that companies fail to achieve their strategic goals because they fail at execution. As you finalize your plans, consider the following questions we posed to the executives.
Q. Who is responsible for strategy execution in your organization?
A. Everyone, we all are.
Tip: That may be somewhat true, but be careful. When "everyone" is responsible, "no one" is truly responsible. As a leader, assign clear responsibility for the accomplishment of specific plan objectives to individuals, not groups. In the June 2008 HBR article "The Secrets to Successful Strategy Execution," research showed the number one trait of organizations that were effective at implementing strategy was that everyone understood the decisions and actions for which he/she was responsible. Carefully identified individuals are responsible for strategy execution. These individuals may organize other people to help them execute, but only the identified individual has the ultimate responsibility for achieving the strategic objective.
Q. Do you have a formal execution process to implement your strategy?
A. We have a strategic plan, but any action or execution plans directly tied to it are limited. What we have is a lot of high level ideas but we haven't translated them into tactics.
Tip: The worst thing an organization can do is to treat the strategic plan as a separate entity from its core business. Strategy execution is a process, a continuous enterprise process. It is a process that encompasses strategy formulation, operations planning, budgeting, program management, and business review. Execution must be managed explicitly, like any other major process in the organization. Aligning strategy and execution in your business will help you achieve your business goals more reliably and quickly, increasing operating margins and employee satisfaction.
Q. How frequently, if at all, does your company plan to assess progress against its strategic plan this year?
A. We don't monitor our plans consistently.
Tip: Sadly,studies show that 85% of leadership teams spend less than one hour per month discussing strategy. Successful strategic execution requires continuous, deliberate attention. At the beginning of the year, set a schedule of regular intervals to review progress-and use those predetermined times to only discuss strategy, no matter how pressing other issues may be. Your commitment to strategy will help your staff recognize the importance of planning and subsequent execution.
Have you linked your strategic initiatives to individual goals?
Tip: Research shows that compensation for 70% of middle managers and more than 90% of front-line employees' is not linked to the organization's strategy. The strategic plan should not be separate from your core business and your day-to-day operations. Translate strategy into clear action steps and assign these steps to individual employees. When such strategic steps are tied to performance reviews, employees will have personal incentive to achieve strategic objectives and will continually be reminded of the importance of strategy to the organization as a whole.
Q. Do you have a consistent approach to communicating your strategy with key stakeholders?
A. Not a formal approach. Our communication tends to happen on an ad-hoc basis.
Tip: In many companies, too few people can accurately articulate the organization's strategy. All too often, company leaders assume the organization's strategy is clear to others. This is usually not true. Create a communication plan for stakeholders at all levels that articulates the company's strategy, delineates specific objectives, and identifies key staff responsible for ensuring such objectives are met. Make sure to include appropriate feedback loops that allow you to engage your stakeholders. Effective communication will help eliminate confusion about the strategic direction of the organization and keep strategy front and center for stakeholders.