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5 Keys to Strategy Execution – Where Do You Stack Up?

Contributor: Paul Niven
Posted: October 22, 2017

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Execution is everything. In a recent study (Harvard Business Review, March 2015) it was the number one challenge cited by global CEOs, topping innovation, geopolitical instability, and top-line growth. 

Little wonder it keeps executives up at night when you consider that at least two-thirds of companies struggle to execute their strategy.

If you want to execute, here’s where you must excel:

Market Discipline: This is the essence of your strategy, answering the question “Why do customers buy from us?” Are you committed to providing the best service or relationship? The most innovative product? Or, the lowest cost? No company can balance all three.

Successful organizations are disciplined in their approach and use their commitment to guide all decisions. Take Apple. When a reporter once asked Steve Jobs when Apple would develop a netbook he replied they would when they could create something for less than five hundred dollars that wasn’t a piece of junk.

That’s a powerful commitment to the best product. Does your company have that commitment? Try this: Ask five people which of the three disciplines above describes your company. If you get don’t get agreement from at least four, you’ve got a problem.

Leadership: Perhaps the most important intangible asset in any company is the quality of leadership. Employees at every level require executives that can develop a differentiating strategy and communicate it with credibility and clarity.

Unfortunately, our research suggests that just 44% of employees are confident that leadership in their company has the credibility to lead strategy execution. And 79% say they are NOT confident that leadership does a good job of communicating strategy in a clear and meaningful way.

Can you remember what your CEO said about strategy (if anything) at your last all-hands meeting?

Understanding of Strategy: It’s impossible to execute a strategy your employees don’t understand. When employees do understand the strategy they can make better, more informed decisions.

However, one of the reasons organizations struggle with execution is that just 13% of employees are confident in their understanding of their company’s strategy. How confident are you that your team understands your strategy?

Balanced Performance Measures: Today even small businesses are awash in data, while large companies are drowning in it. What’s lacking is information that leads to knowledge and better decisions. Performance measures and KPIs, which organizations rely on to foster knowledge and learning, are often at fault.

At many companies, there are significant gaps between strategy and performance measures. While dashboards of operational and financial metrics abound, KPIs that track strategy execution are absent. 56% of employees say they are NOT confident that performance measures help them stay focused on delivering unique customer value.

Quick: List at least 5 non-financial measures you track that are directly translated from your strategy. If you can’t do it your measures aren’t accelerating execution, and may be hindering it.

Alignment of People, Processes and Projects: 

Let’s start with people: The payoffs for aligning teams with strategy through measurement are substantial. Three year total returns to shareholders (TSR) are three times higher at companies where employees understand corporate objectives and the ways in which their jobs contribute to achieving them. Process alignment is also vital.

Every critical internal process (think of your “value chain” in creating, producing, selling, and servicing your products) must be consistent with strategy. Finally, all projects – often termed strategic initiatives – should also align with the company’s strategy.

However, not only is that not often the case, but in a survey of nearly 800 executives conducted by the consulting firm McKinsey, it was revealed nearly half don’t even track the execution of their strategic initiatives.

Can you name the 3 most important strategic initiatives at your company? Are they on track? On budget? Are they having an impact on your execution?

Want to know where you stack up? Check out OKRs Training’s assessment tool at www.senalosa.com