6 Steps to Successfully Execute a Strategy
by Tom Wright, on May 11, 2015 10:48:36 PM
Many people assume that the hardest thing about 'Strategy' is the planning. 'Knowing what to do'. Organizations fill their strategy roles with 'ideas' people. Logical enough, but the simple reality is that 'knowing what to do' is the easy bit. To successfully execute a strategy is hard - it's what sets good strategy people apart from the crowd.
This isn't going to be an article about execution per se. This is going to be an article about what the journey of a successful execution needs to look like. The different steps you need to address to ensure the success of your strategy. At a high level, the execution journey encompasses the following steps:
You'll notice two key things about this diagram:
Strategy isn't a process, it's a way of running your organization. It never ends and is 100% iterative.
It may seem obvious, but so few organisations have tangible connections between their strategic plan and their reporting, performance management or remuneration processes. All your business processes need to acting as one, in harmony if you're to be truly successful.
So, how to successfully execute a strategy? Let's break down the individual phases of this diagram and see how they fit together:
Download Strategic Planning Template
The template is 100% free and comes in Excel format allowing you to build up your strategic plan and output an auto-generated 'plan on a page'.
1. Strategic Planning
It goes without saying that the first step needed to successfully execute a strategy, is the planning process. We've written extensively about how to write good strategic plans. But the main point here is that planning isn't just about actions, it's also about frameworks and methods.
Your planning phase needs to address at least the following questions:
- What are you going to ultimately achieve?
- The steps (big and small) you will be taking to get there?
- What framework will you be using to keep you focused and on track (think the Balanced Scorecard, McKinsey's Strategic Horizons, etc)?
- How will you structure your strategy reporting?
- The frequency of your strategy meetings?
- What communications plan do you have in place for your strategy?
- Who will your strategy mentors or advisers be?
Don't even start the 'doing' phase until you can confidently answer each of the above!
Once you've created your plan - you need to start the process of engaging your organization. In reality the communication process should have been taking place in parallel to the planning process. Read more about that here.
Communication needs to be two-way. For example, you need to establish a mechanism for people to feedback their views about the strategy both at the start and as it rolls out. Some ideas for ways that you can facilitate this kind of constructive communication include:
- An online strategy platform such as Cascade
- Regular ‘all staff’ forums specifically about the strategic plan
- A structured one-to-one meeting framework that includes dedicated discussion time on the strategy in meetings between managers and subordinates
- An open and collaborative culture (this is a whole big topic in itself of course!)
- Regular formal and informal surveys and questionnaires about the progress of the strategy
Don’t fall into the trap of doing a great job of communicating at the start, only to see efforts fall away as people go back to business-as-usual! This is why planning your communications out ahead of time is so important. It will ensure that you keep your momentum up!
3. Goal Setting
OK so you've got a plan - the next step is to start creating tangible goals. Goals owned by individuals that will actually move your plan towards fruition. This is really the first step of the Cascading process. Linking back all of the activities of your senior team to the strategic plan.
It seems obvious, but often organizations create a plan, communicate it, and almost expect the rest to happen by magic. Creating goals with/for your people will help bring structure around execution of the plan. It will also flush out any areas that might have been overlooked.
It’s also the time when an additional element of pragmatism can be applied. Goal setting can help tease out things like:
- Whether or not the plan is realistic given resource constraints
- If you have the right people and skills to execute every aspect of the plan
- How well people have understood your overarching objectives
Goals will also become the bedrock for your ongoing tracking, reporting and performance management. Each of which is a key element in a successful execution programme.
4. Tracking and Reporting
There are really two key components to effective tracking and reporting. Firstly, you need to ensure that everyone in your organization is regularly updating the progress of their own goals. This doesn't have to be arduous or time-consuming. Probably just a few minutes per month is usually enough. Perhaps just prior to a team meeting or the regular strategy sessions you've booked into people’s diaries.
Updates should include a quantitative measure of progress against the goal, as well a short line or two of commentary to add flavor and give a rounded picture of progress.
Goals should never be seen as static – it’s a given that sometimes you’ll need to edit the deadline of a goal, or even rewrite it entirely as your organisation evolves. That’s fine, and indeed should be encouraged – so long as visibility of those changes exists.
Effective tracking lays the groundwork for effective reporting. Where reporting differs from tracking, is that your reporting should be at a strategic level rather than a goal by goal level. The way we built our strategy reporting suite in Cascade is so that your strategy reports are automatically generated as a result of the tracking that takes place for all contributing goals. Even if you’re not using a cloud-based execution suite to execute your plan, you should ensure there is a deep understanding within your organization of the importance of tracking in relation to the reports that are fed to the board, investors and other key stakeholders.
Here’s an example of a board report that we offer in Cascade in-case it helps you to formulate ideas about how you want your own reports to look and function.
5. Performance Management
This is where things start to become a little more progressive – and in our opinion where the vast majority of strategy execution approaches start to unravel. To successfully execute a strategy - you need your entire business process to reflect the importance of that strategy.
Performance management (and appraisals in general) are often viewed as the sole domain of Human Resources. Worse still, they’re viewed as a process for the sake of a process – or at least for the sake of management alone. You’d be hard pressed to find actual users of the most common performance management systems that have positive things to say about the experience – let alone espouse on how it helps them to better execute strategy.
In our view, performance management should be a natural extension of goal setting, which in turn is a natural extension of your strategic plan. It is therefore a critical part of the execution journey.
As you go through the process of appraising your people, you need to be able to draw clear connections between how well they've executed on their specific component of the strategic plan, and their ultimate assessment / score / etc.
But in so many cases, it’s just implemented so very, very badly!
The only way that a performance management process can help you execute on your plan is if it meets the following checks:
- Goals must relate directly back to the organization’s strategic plan
- It must explicitly measure and reward people for their contribution to the overall strategy
- The system must be simple to use and as close to ‘fun’ as possible
- Performance management must celebrate achievement of people and teams above all else
- It must be social, transparent, fair and well understood
Very few of the off-the-shelf performance management systems you can buy tick those boxes (naturally we think that ours is an exception!).
The natural evolution of performance management is remuneration. You've put so much effort into planning, communicating and goal setting - yet so many people fail to follow through with strategy into the one thing that ultimately we all (almost all) work for - money. We're now 5 steps 'away' from where our journey started with our strategic plan - but the importance of connecting remuneration back to strategy cannot be understated.
If you got step 5 right, and did a good job of linking performance management > goals > strategy - then this should be easy enough. But as you go through your initial thoughts on pay rises and bonuses for your people - make sure to sense check yourself. Did the person receiving the highest pay rise / bonus make the single biggest contribution to executing your strategic plan??
Don't forget that remuneration or more broadly 'reward', doesn't just have to be monetary. It could be travel perks, sending people to conferences, extending them additional leadership opportunities - anything at all that you're doing on a merit basis.
It's important to establish firm links between the rewards you give out and the execution of (elements) of your strategy - this needs to be deeply embedded in the culture of the organization.
Conclusion: how to successfully execute a strategy?
There are plenty of software tools on the market that address elements of the above. But one of the reasons we created Cascade was because until now, there hasn't really been a single technology platform that integrates strategy into a every aspect of an organization's processes. If strategy really is important to you, you need to make a tangible commitment to linking these elements together. This holistic approach to successfully executing a strategy becomes increasingly critical as your organization grows - one of the reasons why larger organizations find it harder to execute than startups do, is because their business processes become so disjointed that strategy only permeates the top few layers.
As always, we'd love to hear your thoughts on this article, and any aspects of the strategy life cycle that we may not have given enough credit to! Good luck with execution of your own strategy, if there's anything our team can do to help, we'd love to hear from you.
If you want to know more about strategy execution, and why executing strategy is so much harder than creating it, read our blog post How to Execute Strategy.