Over the past years we have seen unprecedented changes in the world, which have transformed the business landscape in which organizations operate. Besides the acceleration of the changing consumers needs; CEOs, Boards, directors, executives, leaders and senior managers have to face:
a) a never ending financial crisis, b) languish market recovery and c) an increase of new fierce entrants in their industries, either as start ups, or businesses coming from other industries in desperate need of other sources of revenues.
Unfortunately, most of the business management theories and frameworks that we learned in the past, and are currently taught in top business schools, like: Harvard, MIT, Wharton, Insead, IE or London Business School; don’t apply any longer. Many scholars and experts are trying to adapt or create new frameworks that can help leaders succeed in this unusual scenario. One of the new areas that has receive recently lots of attention is strategy execution or implementation, a field in which I have researched hundreds of companies to understand what makes the very few successful when implementing their strategies.
In this post, I share four topics that will be, or continue to be, trending topics in the area of strategy execution this year; and that every CEO, should put on their priority list if they want to increase their chances for implementing their strategy and strategic initiatives successfully
1. Increase FOCUS
“Keep the organization focused, don’t run away from the “tough choices”, and follow them through”
Focus will continue to be one of the key words used in the business world. 2015 already saw many scholars and business management gurus, even several Harvard Business Review articles, highlighting the importance of focus as individuals, leaders and organizations. It is an easy and fancy word to say; I have seen many executives buy-in, and believe, the benefits of “less is more” – yet, when they are with the executive team around the table, when it comes to the team taking the tough choices, it is so hard to make them.
A very nice example of lack of Focus is the come back of one of the toys we have all played once: Lego. Once a leading business, Lego almost disappeared in the late 90’s due to a completely loss of focus. Between 1994 and 1998, they entered into a frenzied state of launching new products to market, going from 109 in 1994 to 347 in 1998. The new CEO, an ex-Mckinsey consultant (and project manager), turned Lego around by recovering that initial focus.
I recommend that you decide with your executive team:
- Which one, two, three or maximum five products/service (the less the better) your organization will put full attention to promote, to improve and to sale in 2016?
- Which are the top three strategic initiatives your team will execute no matter if the organization falls a part?
- And which other initiatives you are currently working on that should be cancelled – I have seen many organizations afraid of “cancelling” projects, so they use the word “delay”
2. Reduce COMPLEXITY
“Complexity is one of the biggest hinders for agility of response, it creates implementation paralysis”
After the financial crisis busted in 2007, organizations have been trying to reduce the complexity of their structures to become more agile in responding to the new, and unprecedented, business landscape. Both public and private sector organizations have launched many initiatives to become “leaner”, “fitter”, “nimbler”, “cut the fat”…. yet, these efforts have been short term impulses without a clear vision of where the organization was going, which in the end have had often the opposite effect: increased complexity and a permanent feeling of “never-ending change in the organization but going nowhere”. A marketing manager in a large international bank recently told me: “I don’t know anymore what I will be doing in 6 months, it is not clear if my department will still be there, we have been in a fire fighting mode over the past three years”.
We can also see that increased complexity in the number of committees that your organization has. Behind this proliferation, there is the perception that people participating in committees feel important; the more you belong to, the higher your status in the organization is. Committees objectives are often around oversight, approval, validation, monitoring certain activities and processes, yet what the actually do is to slow down time to market and reduce the agility to respond to the competition or changing market needs.
Here is an interesting article from IMD professor Wade explaining the issue of complexity and the impact it had in BMW bottom line.
One way to reduce complexity and increase agility, it to apply the following principle: assign corporate teams to lead transversally the strategic mid/long term objectives (e.g. innovation, strategic initiatives,…), while empower and leave local flexibility to the business units to work on their local priorities and short term objectives (e.g. sales, customer services,…).
3. Foster ALIGNMENT
“Alignment has to start at the Top and then cascaded throughout the organization”
In a recent survey on strategy execution from PwC Strategy&, executives responded to the question: “what one thing would make the most difference to closing the strategy-execution gap at your company, if resolved?” Alignment to Strategy was by far the number one answer with more than 20% of respondents.
There is no doubt that alignment at the top is one of the critical factors in successful strategy execution. The executive team has to develop a common understanding of the vision and strategic objectives of the organization. Often this means that senior executives will need to adjust and give up some of their own plans to reach that alignment. Not only they have to be fully in sync and talk with one voice, but also they have also to believe and be 100% committed to achieve that vision and common objectives. Over time we have become “socially smart”, we just need to see the body language of a leader to recognise in 10 seconds if he/she really believes in what they say.
That aligned vision and roadmap has to be translated into a simple one pager document that every single employee of the organization understands. One of the most successful templates for this is the Strategy Map, from the Balanced Scorecard concept from Harvard professors Kaplan & Norton. But you can develop your own strategic roadmap, don’t get stuck with the form, what matters is the content and the key messages.
4. Streamline STRATEGY/PROGRAM IMPLEMENTATION OFFICES
“Establish a central Strategy Planning and Implementation Office reporting to the CEO, with a seat in the executive suit, to drive strategy execution”
This year we will continue seeing that more and more organizations will establish a Strategy Planning and Implementation Office that will report to the CEO and whose director will be a member of the top management team. Today every organization – small, medium and large – have multiple departments and entities working, in a way or another, on strategy formulation and implementation matters:
- Strategic planning office
- Corporate planning office
- CEO office
- Project portfolio management office
- Program management office
- Project management office
This proliferation of departments or offices, which obviously have significant overlapping activities and responsibilities, create large amounts of bureaucracy, multiplication of reports, and a lot of frustration, which in the end leads to organizational paralysis and failure to monitor the execution of the strategy.
In 2016 we will see how organizations will consolidate and streamline all these departments, creating the Strategy Planning and Execution Office, which will combine both formulation and implementation to drive strategy execution. Due to the importance and sensitivity of this new central independent entity – which breaks lots of little empires, silos and old habits – it needs to be driven by the CEO. Interestingly, today you can already find several jobs in LinkedIn with the Strategy Implementation Officer role.
As always, I hope you find the post interesting and can apply some of the suggestion in your practices. Happy to hear if you agree or disagree? or if you see other trending topics in 2016?