Building a strategy execution machine

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Building a strategy execution machine

“We hoped for the best, but things turned out as usual…,” lamented the late Russian Prime Minister Viktor Chernomyrdin once. This blunt observation is applicable both in politics and in business. Why is it that organizations often spend a lot of energy on developing a great strategy, but in the end fail miserably to achieve their goals? The problem is seldom related to the quality of the strategy. The biggest issue is the lack of execution power: The ability for an organization to consistently move toward its most important goals. In my work with high-performing leaders, I have found three focus areas that can help you dramatically improve your own execution power as a leader, as well as the execution power of your organization. These behaviors center on the building of new behaviors, strategic quitting and portfolio thinking.

1. Behaviors eat goals for breakfast

“Our objective for this year is to grow market share by 5%,” a senior executive once told me with unbridled pride. He was not the first one. I have seen these goals often. They are ambitious and at the same time totally devoid of meaning. The reason is that nobody is able to picture an increase in market share of 5%. It is therefore a useless piece of data if you want to communicate an inspiring strategy to the people who need to make it happen. `

To make the link between abstract goals and people actually taking action to achieve these goals, you need to realize that you will not see how to do it, until you see yourself doing it. In other words, though a 5% growth in market share is meaningless, the question of how a company would look if it is able to grow by 5% is key. This approach is called creating a picture in the theatre of the mind. For example, when working with a company that wanted to boost innovation, I let them picture what outside observers would experience differently when walking the hallways of this company when this goal had been achieved. Quickly, the picture coalesced to three distinct behaviors: more client visits, more candid feedback between people, and shorter deadlines for testing ideas. We then proceeded to build these three habits in the entire organization. As a result, innovation speed increased significantly.

In order to translate meaningless metrics into tangible actions, the key leadership behavior is to define the behaviors that will be different in the company once the strategic goals are met. Then start working on these behaviors. Behaviors will eat strategy for breakfast. If you want to have results you have never had before, you need to start doing things you have never done before.

2. Let go in order to reach out

Your ability to strategically quit activities equals your ability to succeed. Doing more is not the answer to too much to do. A new strategy should therefore invariably start with freeing up time, money and energy by strategically quitting existing activities. This practice opens the way to focus on new, more important activities and is often counterintuitive. For example, after setting a compelling strategy, our first instinct is to simply get going and pile additional work on a stretched organization.

The fastest way to apply strategic quitting is through elimination. It is based on the idea that the worst use of time is on something that should not be done in the first place. In other words, to become excellent at something irrelevant. Case in point: A good client of mine had made a grand strategy to grow rapidly. However, he was spending a huge amount of time, money and effort on writing elaborate client proposals, artfully designed and printed on the finest quality of paper. The proposal conversion rate was horrible, though. We eliminated the proposal fluff and focused on being short and to the point. Two things happened: The conversion rate of his proposals doubled and more time was left to see more prospects, thus increasing the amount of proposals.

The key behavior to apply strategic quitting is zero based thinking. It starts with the question: “Knowing what I know right now, which activities, which I am actively involved in, wouldn’t I start if I could do it all over again?” Then start to strategically quit these activities before you even consider initiating new ones.

3. Fall in love with the overall result

In strategy, it is important to make a distinction between objectives and alternatives. Objectives are goals; alternatives are pathways to achieve these goals. A big reason for execution failure is cloudy thinking, where somehow arbitrary alternatives become all-important objectives. For example, while working with a senior finance leadership team, it became clear that next years’ most important goal was revenue growth. They therefore wanted to set a goal to increase market share. However, after some deliberation, the team realized that simply growing margins would help to achieve this goal as well. This thinking opened up a whole new set of different alternatives to achieve their growth goal. The lesson is that we should never fall in love with one alternative to reach a goal. What is important is to always have options. Strategy is the study and development of options. If one option to achieve your strategic goal would fail, the next predefined option in line will simply be activated. In our example, if we cannot grow market share, what can we do to grow margin?

This approach is called portfolio thinking and is distinct from project thinking. In project thinking, every single step needs to be successful to reach the goal. Think of building a complicated chemical plant. If you skip one line item in your project plan (we forgot the pump!) the entire chemical plant will not work. Portfolio thinking, on the other hand, looks at the result of the entire portfolio. It makes the success or failure of the individual alternatives in your portfolio irrelevant.

The key behavior to implement portfolio thinking is to develop a full set of well-developed options to achieve your most important goals. If you do not have three or more alternatives to achieve a strategic goal, then either go back to the drawing board, or choose a new goal.

Overcoming the fallacy of hope

Hope is not a strategy. The biggest mistake executives can make is to spend a huge amount of time on strategy development, while expecting strategy execution to run on autopilot. A mediocre strategy, which is executed in an excellent way, beats a superb strategy with lousy execution every time. There are three questions you need to ask yourself to honestly judge the robustness of the execution power of your organization:

  • Do I consistently steer on the new key behaviors necessary to make the strategy successful?
  • Do I spend as much time quitting activities as on starting new activities?
  • Do I have a broad range of predefined options to choose from while implementing the new strategy?

If you hesitate to answer one or more of these three questions with a firm yes, it is probably a good idea to start plotting a course correction and improve your strategy execution machine. Otherwise, things might turn out as usual…

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