Strategy execution is a profession, not a side task
Whoever falls hard and has a strange, very painful bump on his arm, goes to the hospital for a diagnosis and treatment. A first-aider may express his suspicion that the arm is broken, but will always refer to a medical specialist for definitive diagnosis and treatment. Also in strategy execution, it is advisable to consult a specialist much more often. Only 8% of strategies are successful.
Strategy execution is a profession. But in business it is not customary to hire a specialist for this. Specialists are a plenty for strategy development, and they are also frequently consulted. The result is a beautiful advisory the board and shareholders can get behind.
After that, the CEO hands it over to the CFO, COO, CMO, CIO, and HR director to implement said strategy. And such are tasked with determining the route to the dot on the horizon. That’s strange, because that’s not their job at all. A CFO knows all about finance, the COO is an expert on production and logistics, a CMO knows how he can identify the needs of target groups. Chances are they happen to have an in depth understanding of implementing strategic decisions is pretty small. Exactly for this reason, only 8% of organizations are successful in both outlining an appropriate strategy and its implementation.
Translation into sub-strategies
In strategy execution, two core elements play a role:
- Employees will have to understand exactly what the chosen strategy entails, what their contribution is to the whole and what responsibilities they have in that whole;
- Employees must be able to any time have access to the information they need to perform their duties in a responsible manner.
This actually only succeeds if there is a good translation of the chosen strategy to sub-strategies for finance, manufacturing & logistics, marketing, IT, HR and so on. This does not happen enough in many organizations. In the organizations that have developed sub-strategies for these different areas, it is often the case that each of these sub strategies rarely relate or interface with each other.
This causes them to hang together like loose sand, with as a result a route that is not clear. If you already know exactly where you are going, it is impossible to determine how you are going to get there.
Financial data is leading
Both the strategy and the method of implementation are determined on the basis of data. In the past, financial data were often used for this purpose. That’s one excellent source, because financial data are ultimately always leading. Both in devising the strategy, as in determining whether there is sufficient budget to implement strategic decisions. Today there are more data sources are available, which – if analysed in conjunction – are even more so able to give direction to the strategy and method of implementation. For example, think of customer behaviours data in CRM and transactional systems or systems that monitor click behaviours on the website. The more data the better, but that doesn’t retract from the fact that financial data are and will remain the basis. Not having access to certain data should therefore never be an excuse to postpone decisions.
Strategy assessment provides insight into execution power
Finances also play a big role in FSA check which stands for Feasibility, Suitability and Acceptability. This is a strategy assessment that an organization needs every (sub)strategy should do, but in practice it is often skipped. In short, the FSA check answers three questions:
- Are there sufficient resources in the form of money, production capacity and the right people to implement the strategy?
- Does the chosen strategy solve the core problem? Or is it just fun idea that may be able to tap into a new source of revenue, but does nothing to existing weaknesses?
- Is the strategy acceptable to all stakeholders?
Data also plays a crucial role in this FSA check. The more data available is, the more precisely the answer to these questions can be formulated.
Where organizations have long been inclined to use data to look at the past and extrapolate developments, it is now becoming more and more important more popular to develop and test different strategic scenarios based on the available data. Although this method produces good results, it doesn’t change the fact that no one can see into the future. There may be sudden developments occur that require you to immediately review your strategy. It is important to find out quickly. An alarm bell should go off when the data on which the chosen scenario is based are no longer correct. You can hope that someone will notice and ring the alarm bell, but of course it is much better to have concrete measures to ensure that there is a timely signal that signifies the strategy needs to be adjusted. Such a concrete measure is, for example, predictive analysis for risk mitigation and is part of a strategy assessment. In this model you try to predict the future based on current data.
Don’t see strategy execution as an added task
Executing a strategy is a notorious and constant challenge. As long as companies continue to address their execution problems mainly as structural and motivational initiatives, the vast majority will fail. This article should therefore not be seen as a summary of tools and techniques available to test a strategy and implement. It is meant to show that strategy execution is a specialist subject. A profession for which most organizations do not need to constantly have in-house specialists for. Just like you hire an agency for the development and implementation of a marketing campaign, you also hire specialists for strategy execution. It cannot be expected that the C suite and lower departments can do this on the side without the execution of this getting snowed under by the delusion of day.
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