Even if a business’s leadership team has a clear pathway to success in mind, are they clear on how best to execute? And even if they are clear, what about the people who are in charge of delivering the plan: Are they clear on what needs to happen?
“There is a difference between knowing the path and walking the path.” – Morpheus The Matrix
The ability to set a winning strategy and then successfully execute it eludes too many businesses. In fact, numerous studies point to the fact that most business strategies fail to achieve their objective each year. A recent study of Fortune 500 CEOs, found that only 14% indicated their business was effective in implementing their strategy. In a similar study Harvard Business Review found that the number one challenge facing corporate leaders is executional excellence and author Dan Prosser states that 87% of businesses strategies fail to achieve the intended outcomes. So what’s the secret of the 13% that deliver year on year? What are they doing that is better than the rest?
From our thirty years’ experience working with some of the world’s top executive teams, there are 5 key things that they do better than the rest:
“We say no to great ideas everyday – that is why we are successful.” – Steve Jobs
Great businesses know that they can’t do it all (and do it well). Therefore they understand the need to make clear choices about what they will do and, importantly, what they won’t do. Clear choices should be summarised on a single page and articulated as intellectually convincing and emotionally compelling goal statements with a small number of corresponding goals, measures and targets. Once the ‘what’ and ‘why’ are clear, focus needs to switch to the ‘how’. Remember that less is more and that each project either contributes to successful strategy execution or sucks resources away from it.
Great businesses get the balance right. They know that success relies on integration of the parts and that a bias in one area can have serious repercussions in other areas. They know that sustainable success relies on winning with customers and concurrently building organisational capability. Ideally, an organisation identifies those broad enduring areas that they need to get right for sustainable results. Each business is different, and therefore these areas should also be different (e.g. a mining business compared with a FMCG). Most businesses, however, should have a balanced set of goals that relate to the market, internal operations, people and financial outcomes.
Great businesses understand that a plan without engagement is like a car without wheels. It might look good, but it won’t get you very far. A high level of buy-in by a critical mass of leaders is critical for a strategy to be successful, particularly in the long run. One powerful way to achieve this is by having the leaders that are involved in delivering the plan are also involved in its creation. To ensure ongoing engagement, change fatigue and ‘initiative of the month syndrome’ are two important strategy killers that leaders must attempt to avoid.
Horizontal and vertical alignment is critical for strategies to be successful. It means that plans ladder across and up correctly so the sum of the parts equals the overall business strategy. Some businesses will have a clear plan, but business units and functions aren’t clear on what they need to do to support the plan. Gaining alignment across all the business units, functions and teams provides the strategy with focused power needed for successful execution.
It’s the little things consistently done well, that make all the difference in business. So what is execution discipline? It encompasses a number of key areas including:
- Regular, effective performance reviews and conversations within the relevant leadership team – What’s the score? How are we tracking against the plan? Leaders need to be able to answer these questions and take timely course corrective action when off track.
- Good Project Management Practices – Not every organisation has the luxury of having a high performing PMO (Project Management Office). Good discipline around projects, programs and key actions is a powerful success enabler.’
- Good two-way communication – Clear, consistent communications that focus on what people need to know to be successful is an important execution discipline. Choosing the right medium to carry the message at the appropriate time can also have a big impact on the value of the messaging.
No matter where your business is in your strategic journey, there is always room for improvement. Having the available time and right set of capabilities to make the improvements is critical for any positive change to be sustainable. The key is to focus on the areas that have the greatest upside and get help where you need it.
Great article Blake