We’ve all been there, a freshly minted strategy document, impressively bound, endorsed by the Board, sits there on your desktop, ready to drive your organisation toward the future it aspires to. Fast forward six months and it now sits (at best) behind you on a shelf or (at worst) buried in a desk drawer, rarely to see the light of day.
In my 30 years of helping organisations build their cultures and drive their strategies, I have too often found the following to be true:
- Most organisations are good at strategic planning, but poor at strategic execution
- Most organisations spend a lot of time talking about strategy around their leadership table, far less time back with their teams, explaining the part each team, each individual has to play in it
- Most strategic documents are clear about goals to be achieved and the vision that will materialise when they are reached, but far less clear on the details of projects and initiatives required to deliver it
- Where strategic projects and initiatives are developed, the process to do so is often not integrated with Capex and Opex budgeting
Most organisations have some sort of strategy, Boards and other governance bodies generally require it. However, for many, the process of strategic planning once every 2 or 3 years is completely divorced from what people do day to day. So why do so few strategies fail to gain traction?
Here’s why.
How many frogs are on the log?
If there are 12 frogs on a log and two decide to jump off, how many frogs are left on the log?
The answer is 12. Don’t confuse the decision or intention to act, with the action itself. Strategic Execution is a completely different discipline to Strategic Planning, requiring different skills and ways of thinking. Many organisations apply operational delivery methodologies to executing strategic initiatives.
They just don’t work.
The disciplines that drive success on weekly, monthly, and quarterly reporting cycles are different from those required to bring about transformational shifts that may take many months, even years to be fully realised.
It’s an experiment, don’t pretend otherwise.
Leaders present their polished strategies based on detailed analyses, typically making confident pronouncements about their likelihood of success to Boards and the market. No Board or analyst wants to hear that the leadership team is going to ‘suck it and see’. However, it’s important to recognise that the heart of strategy is hypothesis-making, a living, breathing example of the scientific method in action. The trajectory from the status quo to an envisaged future is filled with numerous logical hypotheses that need to be tested.
“If we change our branding by doing X, then our customers will do Y”
“If we make X change to our product/service features, then people will value this and buy Y more”
“If we invest $X into A.I. applications, it will lead to a $Y efficiency saving”
Our hypotheses might be spot on, or they might be way off the mark. The best organisations recognise the importance of surfacing the chains of logical assumptions that underpin their strategy and developing lead and lag indicators to generate feedback to validate (or challenge) the hypotheses.
Just because a strategic initiative is delivered on time and within budget, doesn’t guarantee the initiative will deliver the desired outcome if it’s the wrong initiative in the first place. The best leaders monitor these key metrics closely, iterating and evolving their initiatives as hard evidence emerges.
Hope is not a strategy
Many strategic plans confuse strategic goals, with the strategy itself. The Oxford English Dictionary defines strategy as “a plan of action designed to achieve a long-term or overall aim”. The key words are plan and action.
Often strategic plans articulate goals and desired outcomes “We will achieve leadership in xxxx by xxxx date” without articulating how that will happen.
This isn’t to say that a high-level strategy needs detailed tactical plans for each element. It should however have a series of enabling initiatives, a plan-on-a-page that defines each initiative, to guide the teams that will unpack and work out detailed execution plans.
Round tables versus long tables
Operational and strategic meetings are different, and they need to be structured as such.
Leadership teams need frequent, informal W.I.P. ‘stand up’ sessions, to connect and ensure everyone is in the loop and on the same page. They also need formal operational meetings to manage resources, make decisions, drive organisational effectiveness, lead people and culture and manage financial performance. These are often referred to as long-table meetings, where each person represents their functional role and departments
Strategic governance is a separate process (typically run quarterly), where the team focuses exclusively on progress against its strategic roadmap.
Strategy review meetings are not a time for presentations and updates, which are long table activities. The status of each initiative should be already fully briefed ahead of time in a succinct pre-reading pack (no more than one page for each theme/pillar). Everyone knows which initiatives are delivering on expectations, which are slipping their timelines or blowing their budget before they enter the meeting.
Based on this assessment, the CEO/GM/MD has a brief 1:on:1 check-in with each Strategic Theme/Pillar sponsor ahead of the strategy meeting and sets the agenda accordingly. Strategic governance sessions, like Board meetings are round table meetings, with everyone accepting collective responsibility for the success of every initiative. They focus on harnessing the collective wisdom in the room to address the priority strategic execution challenges the organisation is facing at that time.
The world’s best-kept secret
A roadshow or town hall meeting alone does not create ‘strategic engagement’. When people know the ‘why’ of the strategy, understand their part to play, and have meaningful input into the ‘how’ as it pertains to their role in the strategy, you can start to develop strategic engagement. Great strategic leaders over-communicate about the strategy, aligning the goals of teams and individuals to the strategy, giving everyone a line-of-sight, between their job and the vision towards which you are all working.
‘Green light’ Dashboards
Many organisations use a traffic light rating for strategic progress. Green means ‘On track, nothing to see here’, amber means “Some issues, but nothing to be concerned about” and red means “The wheels are falling off”. Leaders, naturally predispose to making green assessments.
Shifting the status definitions can radically change behaviour i.e.
- Green can mean ‘This initiative is completed or significantly ahead of plan’
- Amber can mean ‘Everything is on track, to meet the current period milestones, budgets and other goals, steady as she goes’
- Red can mean “This initiative is at significant risk’ – This could be because of internal delivery issues, changes in external conditions, or an unforeseen threat or disruptive event on the horizon.
Under these definitions, Amber becomes the default assessment for most initiatives, most of the time. Leaders are incentivised to turn their initiative to ‘Red’ when things go off course, to ensure it gets the time and focus it requires from the whole team in the next strategy review meeting, to ensure the underlying causes are addressed.
Show me the money!
Finally, many strategic initiatives languish because the organisation devotes insufficient resources to achieve them. We are always creating ‘to do’ lists, but we rarely create a ‘to don’t’ list
“The essence of strategy is choosing what not to do. Without resource limitations and trade-offs, there would be no need for choice and thus no need for strategy.”
Michael E. Porter
Often organisations run their annual OpEx and CapEx budgeting process, without integrating it with the strategic activity forecast in the strategy. Longer term (most often 3 to 5 year) strategies should be distilled into annual delivery plans, specifying the projects and initiatives to be delivered within that period and the resources each will require. These need to be prioritised and calls made about what can (and can’t) be funded and then these resourcing decisions are incorporated into budgets. It’s not rocket science, but a surprising number of organisations run their strategic and budgeting cycles independently, with very little real articulation between the two.
So how do you get the strategy out of the drawer?
If you’re a senior leader in an organisation, here’s a simple rule of thumb. If you are experiencing challenges, bottlenecks, and logjams in the execution of your strategy, it could be due to causes entirely beyond your control. If, however, that’s been true for more than 90 days, then it’s on you.
In the volatile, disruptive global environment in which we now operate it is incumbent on senior leaders to proactively identify obstacles to their organisation’s success and address them adaptively and decisively.
For most of my career, the prevailing wisdom was that between 60% – 90% of organisations failed to successfully implement their strategies. Thankfully that’s improving, more recent research (Bridges Consultancy, 2020) suggests today it’s only 50% that fail, which still means half of organisations bet the farm on heads, and their strategy comes up tails.
“The beginning of wisdom is to call things by their proper name”
Confucius
If your strategy is getting stuck, the solutions are mostly common sense, however they’re not common practice. Success begins with naming those things that are working for you and those things that simply aren’t. It starts with being willing to devote as much time, energy and passion executing that impressively bound strategy in your desk drawer, as you did to create it in the first place.
Dattner Group works with all sorts of organisations to develop strategy maps and support leaders to govern those strategies with assurance. To explore how we can assist you in strategy implementation and execution get in touch.
