Aligning Strategy & Execution

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Strategy [strat’-i-jee]: a plan, method or series of maneuvers or stratagems for obtaining a specific goal or result. Execute [ek’-si-kyoot]: to produce in accordance with a plan or design. Clearly, the two ideas are closely related; one involves setting a plan and the other involves putting the same plan into motion. Simple enough. Yet, why is it that so many companies fail to make the connection?

In my experience, most organizations are very adept at planning.

Strategy [strat’-i-jee]: a plan, method or series of maneuvers or stratagems for obtaining a specific goal or result. Execute [ek’-si-kyoot]: to produce in accordance with a plan or design. Clearly, the two ideas are closely related; one involves setting a plan and the other involves putting the same plan into motion. Simple enough. Yet, why is it that so many companies fail to make the connection?

In my experience, most organizations are very adept at planning. After all, business schools worldwide have taught the essence of planning via complex algorithms and methodologies for decades. Many professionals, including Big Four consultants, have made careers of planning for their companies or their clients. Planning looks forward and therefore must anticipate future events, thus it is often just as much art as it is skill.

Execution, on the other hand, is all about action. Action in the face of uncertain events and unforeseen circumstances. Action designed to accomplish the goals defined by the existing plan. However, once the train of action leaves the station, it often rides down very different tracks than originally planned.

To understand why the connection between strategy and execution is so elusive in today’s business environment, we need to understand how defined strategies are often deployed. Most organizations invest the appropriate amount of time into developing their strategic plans. These plans, when done correctly, look out three to five years on the business horizon. They often include goals for desired performance results for the defined period of time. Such plans are time-consuming and are usually captured in a bound report of multiple pages. However, in most strategic plans, little space is dedicated to identify how the defined goals will be achieved. It is often assumed that the bright individuals already on the company’s payroll have the skills necessary to put the plan into action.

From an execution perspective, this assumption is certainly grounded in some truth. Individuals working inside organizations are quite familiar with their corporate culture, their coworkers and the informal ways in which “things get done”. While this is clearly an asset, it is not enough. Furthermore, a company’s strategy - when it is disseminated throughout the organization - is typically communicated in a formal email or a PowerPoint presentation by senior management. Such efforts are more effective at telling than they are selling, and individuals who did not benefit from the exhaustive meetings to develop the strategy have usually have few ideas on how to accomplish the plan.

In the absence of clear direction on how the strategic goals are expected to be achieved, individuals have no option but to resort to what has served them well in the past - they “wing it”. These good intentions are hit and miss at best when it comes to delivering the expected results for the organization. Hence, while people have done their best to improve the company’s performance - and enhance their own incentive compensation - they often fall short.

This frequent disconnect between strategy and execution is rooted in a lack of bona fide execution-related, metrics. These important indicators consist of a set of key measures of organizational performance, all in support of achievement of the larger goals defined in the overall strategic plan. Done properly, they act in both leading and lagging fashions, and inform the organization if current efforts are properly focused or require revision. They are simple, yet elegant, in their design and immediately communicate if the company’s execution engine is on track to deliver expected results.

If this concept is so simple, then why do so many organizations struggle to provide their planned results? Too often, after developing a strategic plan and related goals, senior management expects their subordinates to know how to put the plan into action. Other times, organizations are “metrics-averse”, afraid to hold themselves accountable for results that will require deftness and skill on their part to consistently deliver. Still yet, some companies have rarely used any form of measures to determine their progress and are not sure how to properly use them.

It’s important to understand, performance metrics are not standard business measures such as revenue and profits. These financial measures, while important, do little to suggest to a company how well it is performing. Performance metrics are focused almost entirely on the measurement of the business drivers of results. They measure action - or lack thereof - that directly deliver such business results. When designed effectively, they cannot be ignored else the organization will fail to deliver planned results.

One important note: performance metrics are typically rooted in and closely aligned with an organization’s business processes. Why? Because it is through these workflows, these crucial activities, that a company provides its goods and services to its customers. Inside your processes is where the action lives. If business processes are the body of the organization, then performance metrics represent its vital signs.

So, what is the most effective way in which to link strategy and execution? It all begins with a clear understanding of your business drivers, at all levels of your organization, and how to best measure them. Know the system of your business processes and how they are interrelated to deliver results, and you are then on your way to understanding the pipeline from a well laid plan to the accomplishment of your business objectives.

Remember, it all begins by planning the work and then working the plan. And effectively measuring your progress along the way is the real key to success.

Steve is President & CEO of Accellenx Partners, focused on driving accelerated results through excellence. He can be reached at ssmith[at]accellenx.com . 

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