Improving management’s strategic execution – Assessing your Strategic Execution QuotientSM
Context
It’s one thing to pick a growth strategy and quite another to successfully execute it. Amidst a large number of issues, trends and drivers affecting strategy and execution, none stand out more than the fast cycles of innovation and change experienced by companies today.
When the ideas behind strategy formulation and business execution were formulated in the mid 1900s, they were done so in a crucible of relatively slow cycles of innovation, relatively slow dispersion across an industry or geography and an environment of relative stability. Strategy was a top-down, center-led process and the central “execution” metaphor was based on conceiving the business as a simple machine. With that metaphor, execution was about “programming” the organization to execute the strategy by managing one of a few levers. The “simple machine” metaphor also led to a “single point of failure” approach to addressing problems when performance did not meet expectations. Is it a bad strategy? Then fix the strategy. Is it poor metrics? Then fix the metrics. Is it a poor organization structure? Then fix the structure. Each of these “single failure point” approaches took time to discover, analyze, address, implement and monitor for impact. In a stable world, these were effective ways to think about the business and to go about addressing performance problems.
So what’s the problem? Globalization of business models and markets, information connectivity and free flow of capital have all led to fast cycles of innovation requiring faster sense-and-respond capabilities that require faster and relatively discontinuous change for most businesses. The simple machine metaphor breaks down and the single point of failure approach to performance problems is no longer acceptable or effective. Companies that exceed in planning and executing strategy in the current era do so by:
- First – Reconceiving the business as a complex, adaptive organism.
- Second – Building adaptability and execution of relatively discontinuous change into their culture and management systems as part of the ongoing DNA of the business.
- Third – Taking a holistic, systems approach and perspective to performance leverage.
MSG Point of View:
Just as the previous era of business required a strategy planning and execution template that was right for the times, the current generation of business requires a “next generation” template for strategy planning and execution. There are two key elements in the blueprint for the next generation of planning and execution: (1) A closed loop model of planning and execution that addresses (2) six tightly intertwined, interdependent networked dimensions that link intended strategy to actual, successful execution.
The six interdependent dimensions include Strategic Context, Strategy, Strategic Translation, Resource Deployment, Organizational Readiness and the Management System. Breakdowns in alignment in any of these dimensions impede performance and can easily derail growth.
Companies that drive both excellence in best practices within these dimensions and alignment across all these dimensions benefit from faster cycles of sense and response, smaller gaps between actual performance and strategic aspirations and objectives and less disruption from shifts in market dynamics.
Understanding gaps in performance requires a look across these dimensions as well as deep dives within each dimension. Addressing strategic performance gaps is no longer a “single point of failure” endeavor, it’s a holistic, systems analysis effort.
What we do:
Our team works with management to diagnose your Strategic Execution QuotientSM and determine what fixes are needed to ensure strategic really connects to execution. The key components of the Strategic Execution Quotient include:
- Understanding the gap between strategic aspirations and objectives and the current performance of the business against those items – How big? How long? What’s the direction given current trends? What are the risks that must be managed?
- Diagnosing and pinpointing the causes of gaps in strategic performance and results – a prerequisite to fixing them.
- Once causes are diagnosed, we work with management to address the sources – Is there insufficient or misaligned strategic context? Does the organization have the capacity for change that is consistent with the plan? Is the plan sufficiently detailed to drive execution? Do the current management systems act as an “accelerant” or an “anchor” to strategic aspirations and objectives?
- Most importantly, are we considering the impact of changes in one dimension on all the other dimensions of the strategy planning and execution framework? And, are we driving a closed loop feedback model between the planning dimensions and execution dimensions of the next generation strategy planning and execution framework.
Our diagnostic and recommendation development approach is tailored to address the needs of a business unit or the enterprise and it can be tailored to provide a preliminary high-spot review or a detailed deep dive.