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Business Design » Strategize OR execute

Strategize OR execute

In my previous post I talked about the need for business model development in large corps.
In this post I elaborate into a few aspects of the strategy execution or the lack of it, strategy execution is a very complex topic!
Comments are most welcome!

There are truckloads of books written about strategy and strategy development but not many written about how to put a strategy to work and deliver the desired results. Almost everything written about strategy execution is about single case stories, which makes them difficult to learn from due to the fact that all had their own specific settings making them less relevant in general.

The two dominant methods used for strategy execution I come across in my work can be summarized as:
Defining strategic objectives, setting business plans, from the top cascading yearly balanced scorecards in the line organization, ensuring line organization alignment, setting incentives to the goals in the scorecard, and regularly follow up on progress. Assuming the strategy is sound and the steps are connected there is nothing wrong with this methods, and still most managers are not satisfied with the strategy execution performance and more specifically the speed of it.
And for greater shifts in strategy it is common that companies run strategic execution in programs reporting to the top management team, this approach seems to work better, more speed, but has its own issues relating to getting the line organization to execute accordingly.

The main issue in both methods is managers’ lacking understanding of the strategy and their contribution in the execution of it.
In fact the latter approach often lead to re-organization due to the lack of line managers’ involvement.

I have during some time come to an insight that the whole idea of driving strategy execution in a yearly or even quarterly timeframe is at least part of the reason for dissatisfaction and failure.
Managers get caught in the daily challenges and the focus on short term KPI’s (numbers) overtake the strategic objectives (mid-to-long term objectives). In a large scale study done by HBR only 55% of senior managers could in their own words tell even one of the strategic priorities of their company and moving down the line this number plummet to 16%. The study point out another main reason for failure and dissatisfaction, most managers distrust colleagues in other line organizations to support them in reaching their objectives.

Generalizing, most managers in most companies do not understand how their objectives connect to the company strategic priorities! And according to the HBR study better communication won’t fix this.

Simply put: Daily challenges and top leadership’s drive for short term KPI results consume most of the energy in mid management, and the breakdown of company strategic priorities into line managers’ objectives makes them less engaging and doesn’t make that much sense in the mind of the managers and employees.

This series of article is interesting, too IT oriented for me, but if you can live with this it is worth following and read some of the articles: http://www.opentext.com/campaigns/2020-agenda/article-series

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