Today, organizations of all kinds are reevaluating their strategies as they face unprecedented levels of change in their industries and the world. While the strategic planning process often reveals large opportunities, threats and risks, organizations only benefit if they can capitalize on the good and avoid the bad with speed and critical thinking. Implementation is where the rubber meets the road, but it’s also typically where organizations falter.
So the strategy consulting firm you hired has just delivered its final presentation which identified insights about the market, your competitors and your organization, all of which provided clarity for your senior leadership team about how to move your organization forward. They also identified some key things your organization needs to do differently to successfully implement this new strategy. You bring this strategic plan to your board and you get approval to move ahead. Now the strategy consultants turn the process back over to you to execute, with some ongoing help and oversight from them and so the question becomes “what next?”.
Some statistics for consideration:
• On average companies only achieve 63% of the performance expected
• Only 10% of companies fully execute their strategy
• Only 5% of workforces fully understand the strategy and can explain it
• 85% of executive teams spend less than 1 hour a month formally discussing strategy
• 60% of organizations do not link departmental budgets to strategy
• Over 65% of companies do not directly invest in developing strategic capability of existing employees
In most organizations, this is the reality of the situation and as the strategic initiatives go from planning to implementation and begin to involve more and more people (who need to start doing things differently because of the new strategy), the system starts to get bogged down. The organization feels overwhelmed, projects stall, and the strategy implementation is delayed. Worse, it may stop altogether.
The key is to take a fundamentally different path and find a way to implement the strategy that produces the anticipated results. Fundamentally the organization needs to bridge the divide between senior leaders who create strategy and the operating leaders and teams who execute it. This can be achieved by doing two things very differently from most organizations during strategy implementation.
First, leaders at the top need to paint a clear picture of what the organization can achieve once a new strategy is implemented. This is the Vision, a clear picture of what is trying to be achieved. Once it’s clear what the organization can potentially accomplish in its markets, employees start to understand how the pieces of a strategy make sense. By connecting day-to-day work on strategic initiatives to the organization’s window of opportunity to accomplish an aspirational goal, leaders start to create positive energy and innovative thinking within the organization.
Employees impacted by a new strategic initiative need to understand and buy into it to accelerate its execution. Especially in large, complex organizations or those with global operations, this means many more people beyond those at the top one, two or three levels. Therefore, it’s critical that leaders create the organization’s picture of its opportunity and communicate it to employees at every level to increase their understanding, urgency, and commitment around the new strategy. They also need to answer the WIIFM question – how it explicitly affects each individual and what benefits does it bring.
Second, is the creation of a cross-functional acceleration team. It has been called many things, such as a guiding team or guiding coalition, and even a steering committee but its function is clear: to remove any barriers that might stand in the way of accelerating strategy execution. The team needs to be a cross-section of people representing all levels and functions. This team recruits and deploys a cadre of people who want to help the organization achieve the picture painted by the senior leadership team.
The senior leadership that sets the strategy, and the operational groups that execute it, work in harmony with the acceleration team to knock down the barriers that often hinder successful strategy implementation.
As mentioned in our previous blog, the process of change needs to become part of an organization’s corporate culture, and help it consistently achieve results at an accelerated pace. This approach works for all kinds of strategic changes, whether they involve an acquisition, large systems implementation, major reorganization, sales and growth initiatives, or accelerated product innovation.
Harvard conducted a study nearly 30 years ago that quantified the financial opportunities resulting from strategy execution acceleration. Over an 11-year period, they compared economic results for firms that struggled to change quickly and thoughtfully to organizations that were much more capable in that regard. The results were extraordinary: Revenue growth for the first group was 682% vs. 166% for the other; net income growth was 756% vs. 1%; stock price growth was 901% vs. 74%; and employment growth was 282% vs. 36%.
That was 30 years ago, in a slower-moving world. Imagine the results now.