Strategy execution is a hot topic in management today. A 2008 Conference Board survey of CEOs demonstrated that chief executives rate it as their number one and number two most challenging issues. It is estimated that 60% of strategies are not successfully implemented.
But what, exactly, needs to be done to improve business results by executing strategy more successfully?
10-Step Approach to Strategy Execution
In practice, strategy execution is difficult for many reasons. Many leaders don’t know what strategy execution is or how they should approach it. Home-grown approaches may be incomplete if they fail to incorporate many of the basic activities. We have defined 10 steps in successful implementation of strategy.
Step 1: Visualize the Strategy
One of the most pressing challenges in all of strategy is to understand what a strategy is. An effective way to improve this understanding is to visualize the strategy via an illustration that shows both the important elements of the strategy and how each element relates to the others.
Step 2: Measure the Strategy
Key elements of the visualized strategy should be assigned an easily understood performance measure. The full set of strategic performance measures can be organized into a dashboard, a Balanced Scorecard, or some other framework so the reader can determine that progress is being made toward completion of the strategy.
Step 3: Report Progress
In the same way that a budget is reviewed monthly to ensure financial commitments are being kept, the strategy should be reviewed regularly, but with more of an eye toward determining if the strategy is producing results, versus controlling performance.
Step 4: Make Decisions
Strategy execution is much like sailing a boat toward a planned destination. A defined course and a full complement of navigational charts will never eliminate the need to remain vigilant, to assess the environment, and to make corrections as conditions change. As part of the regular reporting process leaders must make on-going strategic decisions to keep the strategy current and on course.
Step 5: Identify Strategic Projects
Organizations may have many projects on-going at any point, but they rarely have a firm grasp on the type and range of these projects. The first step in improving project-oriented strategy execution is to capture and organize all projects—strategy projects in particular—that are underway throughout an organization.
Step 6: Align Strategy Projects
Once projects are captured they must be aligned to the strategies or goals for the organization. This step entails comparing each project, either proposed or on-going, to the strategic goals to determine if alignment exists. Only those projects that directly impact the strategy should be resourced and continued.
Step 7: Manage Projects
Organizations must develop a capability in project management if they are to execute strategy effectively. In some settings, projects receive very little management. In others, projects persist well beyond their scheduled completion. The full list of projects in any organization should be coordinated and controlled by a central project office or officer with the responsibility for monitoring both progress and performance.
Step 8: Communicate Strategy
It is difficult to execute strategy when the strategy itself isn’t well understood, or when performance relative to it is not communicated. Leaders must communicate their visualized strategy to the workforce in a way that will help them understand not only what needs to be done, but why.
Step 9: Align Individual Roles
Employees want to know they are making a meaningful contribution to their organization’s success. It’s up to senior leaders to ensure that employees at all levels can articulate and evaluate their personal roles toward achievement of specific strategic goals. This is perhaps one of the most critical aspects of the execution process.
Step 10: Reward Performance
In strategy execution, as in any other area of management, what gets measured gets done. Taking this one step further, what get measured and rewarded gets done faster. After explaining the strategy and aligning the workforce to it, senior managers institute the incentives that drive behaviours consistent with the strategy.
- Ed Barrows, What is Strategy Execution, www.amanet.org, 2010
- Conference Board Survey of CEOs, Conference Board, 2008