Monday, April 18, 2011

Some more insights into Successful Strategy Execution..

In the latest Economist series, Michel Syrett, a prolific writer, has written a book, “Successful Strategy Execution: How to Keep Your Business Goals on Target”. In this book he writes about how managers can bridge the gap between strategy creation and performance. Following up on this week’s article ‘The Secrets to Successful Strategy Execution’, here are 10 steps that Michel suggests can lead to successful strategy execution.

1. 1. Setting the scene

Michel quotes Mark Hurd, CEO HP, “Vision is nothing without execution”. Michel says that it is a myth that creation and execution of a business strategy are a mystery which can only be unraveled by management gurus, MBA graduates and consultants. Developing effective business strategies and direction is not rocket science. In fact they consists of ideas already known but the key is to determine if the strategy is right for your organization and then get the rest of the organization in harmony with it.

2. 2. Friction

Execution of any strategy can be hampered due to many reasons such as cultural differences, staffing changes, operational difficulties, lack of necessary information or misinterpretation of it and lack of accountability. In the Harvard Business Review, ‘The Secrets to Successful Strategy Execution’, the authors have touched upon the same concepts by explaining that free flow of information across the organizational boundaries and a sense of accountability for the decisions is vital for successful strategy execution.

3. 3. Focus

If every member of the organization knows what they have to achieve, the members can decide how to go about accomplishing their task. However, it is necessary to give them the right focus. This includes clear articulation of goals and breaking them into tasks.

4. 4. Communication

Communication plays a crucial role in not only articulation of tasks but also reporting the results and targets. Michel cites the example of Diageo, the world’s largest wines and spirits group. When it’s new CEO, Iwamoto took over the company in 2004; his main task was to motivate the workforce. In Japan, since words hold high importance, the CEO had to use precise language to instill confidence in the employees and trust in their mangers. The employees were paid performance bonuses without achieving their performance targets. The CEO introduced a new performance management system, and communicated effectively to the organization about bonus decisions and justifications. Team building activities were introduced and by communicating the intent effectively to its employees, the company was revived. Thus communication was significant in achieving tasks.

5. 5. Behavior

Michel states that there is a huge difference between strategy execution today and in the last two decades of the 20th century. Back then, the focus was more on process re-engineering while now it is determined by the behavior of the employees. The employee’s behavior is an amalgamation of her attitudes and aspirations and is further influenced by the organization’s cultural and protocols. Deutsche bank has identified key elements of this behavior as follows:

· The willingness to perform beyond the expected level

· The urge to remain a part of the company

· Emotional involvement with the organization

6. 6. Measurement

Effective execution of strategy is largely dependent on effective measurement techniques. The performance of business partners, suppliers and distributors has to be aligned closely with the main goals of the organization and the internal departments. Strategic management tools include a strategy map to align the activities of the various business units to the corporate goals, use of balanced score cards and a mission dashboard where the employees can keep a track of their contribution towards the company’s strategic objectives.

7. 7. Leadership

Successful strategy execution is possible if leadership is demonstrated not just at the senior management level but at all levels of the organizational structure. It includes instilling focus and clarity, generating engagement and commitment, effective resource allocation, collaboration fostering, creating the right milestones and managing pace.

8. 8. Change

Employees are usually averse to change. Change is however necessary for businesses to face new challenges. Change management is therefore very important for successful strategic execution.

9. 9. Innovation

Instead of focusing on developing a group of highly innovative individuals, the organization should aim to create an environment wherein the employees are able to tap their own creative potential. Innovation can be fostered by encouraging employees to share their thoughts, eliminating blame, rewarding creative contributions and picking the right team leader.

10.10. Pathway

The pathway to successful strategic execution depends on focusing on the right strategic goals and the freedom given to employees to carry out the goals in innovative and creative ways. It is built on the following foundation:

  • Transparency – letting people see what the others are doing
  • Engagement – allowing workers to implement and shape the strategy
  • Collaborative – building trust within and outside the organization
  • Disruption – making the rebels the organization’s best agents of change
  • Networking – enabling free flow and sharing of work, thus developing centers of best practice
  • Amoebic – Adapting and changing with changes below the surface.

Reference:

http://issuu.com/38902/docs/the-economist---successful-strategy-execution

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