3 secrets of successful strategy execution
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Transcript of 3 secrets of successful strategy execution
3 SECRETS OF SUCCESSFUL STRATEGY EXECUTION
KEY TOPICS
Why is Strategy Execution the #1 CEO Priority?
What Are the 3 Secrets to Executing Well?
2. Close the Loop – View Planning/Execution as an Integrated Process
1. Stay Focused – Reinforce The Right Behaviors
3. Follow-up Relentlessly – Leverage Strategy Execution Software
Why is Strategy Execution Difficult?
Copyright i-nexus 2013. All rights reserved.
Summary/Key “Take-aways”
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Good Strategy x Good Execution = Superior Results
• You can beat expectations with good execution of a mediocre strategy
But...
• You can miss expectations with poor execution of a brilliant strategy
Good execution is the critical determinant of superior results
GOOD STRATEGY IS NOT ENOUGH…
“70% of companies believe they select the right business strategy, but fail to execute it due to short-comings in their management system” – Accenture Report
“In the majority of cases – we estimate 70% - the problem isn’t bad strategy but … bad execution” – Fortune Magazine
“…only 11% of companies employ a fully fledged strategic control system” – Ashridge Strategic Management Centre
“90% of organisations fail to execute their strategy” – David Norton, Balanced Scorecard Report
“ex-e-cu-tion (ek si kyoo shun), n 1. The missing link. 2. The main reason companies fall short of their promises. 3. The gap between what a company’s leaders want to achieve and the ability of their organisations to deliver it…” – Larry Bossidy and Ram Charan, Execution: The discipline of getting things done
“… over 66% companies with over $500M in revenue set targets that exceeded 9% real growth, yet less than one company in ten achieved this level of success.” – Chris Zook, Havard Business Review
WHILST MANY ORGANISATIONS CRAFT GREAT STRATEGIES, FEW EXCUTE WELL…
i-nexus Solves a Big Problem
Execution is the #1 CEO PriorityKey Execution Problems – CEO Perspective
• Poorly Communicated Strategy• Unclear Accountability• Poorly Defined Roles/Responsibilities• Inadequate Execution and Performance
Monitoring
THE CEO PERSPECTIVE…
Current Approaches and Tools Simply Don’t Work...
Senior ManagementGoals
Goal CascadeProcess
OperationalManagementGoals/Action Plans
PerformanceReportingProcess
OperationalManagementReview
10% Problem
Rearview MirrorProblem
Execution
Urgent vs. ImportantProblem
Underlying Challenges:
Ensuring Alignment and AccountabilityMaintaining Focus in the Whirlwind
Looking Ahead – Not Behind
THERE ARE SEVERAL UNDERLYING CHALLENGES…
Some interesting numbers... Help shine a light on the root causes of poor execution...
“<15% of companies routinely track how they perform over how they thought they were going to perform” Marakon Associates/Economist Intelligence Unit
“95% Employees don’t understand their companies strategy” Kaplan and Norton, Harvard Business Report
“<27% employees have access to their company’s strategic plan” Kaplan and Norton, Harvard Business Report
“86% of executive teams spend less than one hour a month reviewing strategy” Kaplan and Norton, Harvard Business Report
“70% of organisations do not link middle management incentives to strategy” Kaplan and Norton, Harvard Business Report
THE EVIDENCE BACKS-UP THESE HYPOTHESES …
•Grow Sales of New Product•Customer Focus•Invest in China•Improve employee satisfaction
The Off-site Strategy Day
Unclear Accountabilities
Poorly DefinedGoals
.ppt deck
The Ivory Tower Exercise
FundingConstraints
Give me your numbers...
I need to includesome contingency...
Way too much!Cut by 25%!
If I don’t include it I’ll lose it...
The Budget Dance
It’s close enough forMilitary work...
Divisional President
Functional Heads
Departmental Heads
Middle Managers
Employees
ProjectProject
Project
The Ad Hoc Cascade
STRATEGY EXECUTION - WHAT HAPPENS IN REALITY…
Projects
VALUE OF AN EFFECTIVE EXECUTION SYSTEM -IMPACT OF THE DANAHER BUSINESS SYSTEM
3 SECRETS TO SUCCESSFUL EXECUTION…
2. CLOSE THE LOOPLOOK FORWARD, NOT JUST BACKWARD, ON AN REGULAR BASIS
•View planning and execution as an integrated process•Define the leading measures that predict achievement of the goals•Set targets based on expected impact of actions and review progress periodically•Continually test assumptions and act quickly if hypothesis is wrong
1. STAY FOCUSEDFOCUS ON 1-3 BREAKTHROUGH/WILDLY IMPORTANT GOALS ONLY
•Actively decide what not to do, not just what to do•Ensure there is absolute goal clarity – make sure the finish line is clear•Ensure every employee understands what winning means
3. FOLLOW-UP RELENTLESSLYUSE STRATEGY EXECUTION SOFTWARE TO DRIVE RELENTLESS FOLLOW-UP
•Ensure every employee can easily see, understand and update their progress against the plan•Leverage automated exception reporting to reinforce ‘monthly’ heartbeat •Create focus on action by taking the ‘heavy lifting’ out of preparing for execution reviews•Create accountability for results through clarity and transparency
STAY FOCUSED – THE CONFLICTING FORCES…
The Whirlwind Goals or The Day Job New Activities
URGENT IMPORTANT
IMPORTANT
UR
GE
NT
URGENTNOT
IMPORTANT
URGENTAND
IMPORTANT
NOTURGENT
NOTIMPORTANT
IMPORTANTNOT
URGENT
LOW HIGH
LOW
HIG
H
STAY FOCUSED – AVOID THE URGENT NOT IMPORTANT TRAP
5%
10%70%
15%
STAY FOCUSED – CREATING CLARITY AND FOCUS
Less Structure More Structure
LAGGINGMEASURE
From X to Y by When
FranklinCovey 4DX
Wildly Important Goals
LEADINGMEASURE
LEADINGMEASURE
1-2 WIGs
Hoshin Kanri
Planning Tables/X-matrices
2-3 Breakthrough Objectives
Kaplan & Norton BSC
Strategy Maps/BSC
CLOSETHE LOOP – CHANGE VS. RUN THE BUSINESS
CHANGE THE BUSINESSRUN THE BUSINESS
CLOSED-LOOPSTRATEGY EXECUTION
CYCLE
InitiativesIndicators
Goals
Action
Impact
Insight
Translate Business Goals into Executable Initiatives and Create Clear Accountability for Delivery
Drive and Review Execution of The
Resulting Initiatives
Measure and Forecast the
Impact of Those Initiatives on Performance
CLOSE THE LOOP – WHAT’S THE REAL QUESTION?
1. Are we on track?
2. If we are not on track – are we doing something about it?
3. In aggregate, will the actions underway get us where we want to go?
1. Establish Vision
2.Develop 3-5 Year Breakthrough Objectives
3.
4.
5. Implement Annual Objectives
6. Monthly Review
7. Annual Review
P
DC
A
Reflection
Hoshin Process in Concept
Develop Annual Objectives
Deploy Annual Objectives
Catch-ball Planning
CLOSETHE LOOP – HOSHIN AS BEST PRACTICE
CLOSETHE LOOP – HOSHIN BOWLING CHARTS/ COUNTERMEASURES
Bowling Chart
Are we likely to hit the future targets?
If not, why not?What’s the root cause and what can we do about it – short and long term? Countermeasure Plan
WTM FT FTWTM TWTM WWF TM FT FTWTMFT TWTM F TWTM
Monthly Business Execution Review
Meeting
Monthly Business Execution
Review Meeting
Week 4
FT
Week 1
FTWTM
Week 2
TWTM
Week 3
W
Week 4
Month 1 Month 2
WF TM
Make sure its
right
RELENTLESS FOLLOW-UP – ESTABLISHING AN EXECUTION HEART BEAT
Key Goals for 20XX
(Re)Define Strategic Goals
© i-solutions Global Ltd. 2007
Cascade Goals/
DevelopPlans
Execute the
Actions
Set Personal Objectives/
Develop Action Plans
Run the Operation
HR/Talent Management
System
Spreadsheets/
Documents
Presentation Decks/ Spreadsheets
Review and Analyse
Performance
ERPSystem
BI Tools/Spreadsheets
Project Management Tools/Spreadsheets/E-mail
RELENTLESS FOLLOW-UP - EXISTING PROCESSES AND TOOLS MAKE FOLLOW-UP CHALLENGING….
Solving this problem disrupts three big software markets...
RELENTLESS FOLLOW-UP – A NEW BREED OF CLOUD-BASED STRATEGY EXECUTION SOFTWARE IS EMERGING…
STRATEGY EXECUTIONSOFTWARE
PROJECTPORTFOLIO
MANAGEMENT
CORPORATEPERFORMANCEMANAGEMENT
EMPLOYEEPERFORMANCEMANAGEMENT
Size: $1.1Bn/CAGR 9% (IDC)Primary Buyer: Operations• Planning and Execution of
Projects and Programs• Optimisation of Project
Portfolios
Size: $2.2Bn/CAGR 15% (Bersin)Primary Buyer: HR• Management and Automation
of Employee Goal Cascade Process
• Talent Management
Size: $1.9Bn/CAGR 28% (Gartner)
Primary Buyer: Finance• Tracking and Forecasting of
Financial Performance• Tracking of Key Performance
Indicators
“The fundamental problem with traditional performance management software is that it fails to close the loop – it helps you identify the action to take but doesn’t help you understand if the action you have taken has had any effect.”Martin Butler, CEO, Butler Research
“Business Execution software is emerging as the answer to two questions - how are we as an organisation going to do that? And how does it specifically apply to me? Business Execution software brings together people, projects and corporate performance into a single system.”Bruce Richardson, Chief Research Officer, AMR Research
Action
Impact
Insight
Translate Business Goals into Executable Actions and Create
Clear Accountability for Delivery
Drive and Review Execution of Those
Actions
Measure and Forecast the
Impact of Those Actions on
Performance
STRATEGYEXECUTIONSOFTWARE
Strategy Execution Software – helps you to:
1. Translate business goals into executable actions;
2. Tie in the people who need to execute those actions;
3. Drive and monitor execution of those actions;
4. Understand if the actions are actually moving, or are likely to move, the dials that measure achievement of business goals.
RELENTLESS FOLLOW-UP – A NEW BREED OF CLOUD-BASED STRATEGY EXECUTION SOFTWARE IS EMERGING…
RELENTLESS FOLLOW-UP – THE RIGHT STRATEGY EXECUTION SOFTWARE CAN ACTIVELY DRIVE “FOLLOW-UP”
What Actions Are We Taking and Are We
Doing Enough?
What Actions Are We Taking and Are We
Doing Enough?
Reminder – Time to Focus on the
Important!
Reminder – Time to Focus on the
Important!Are My Team On Track?Are My Team On Track?
Where Do We Need to Focus Our Attention?Where Do We Need to Focus Our Attention?
SUMMARY – KEY POINTS
Strategy Execution is the #1 CXO Priority
Success is Function of Right Behaviors, Right Process and Right Tool
The Key is to Look Forward, Not Backward and Course-correct Early
Focus Requires Tough Choices, Catch-ball and Absolute Clarity
Strategy Execution Software Makes Follow-up a Realistic Proposition
Current Fragmented Approach Makes Strategy Execution Difficult
Copyright i-nexus 2013. All rights reserved.
Stay Focused, Close the Loop and Follow-up Relentlessly!
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COMPANIES USING HOSHIN TODAY
ANY QUESTIONS?
Paul [email protected]
Skype: pauldocherty+44 (0) 7985 117784
For a copy of the slides please contact:[email protected]
Patrick [email protected]
Skype: patrick.pecorilli+1 514-816-0618