The "8" : Strategy Implementation System

The organizational perspective and the individual perspective must meet in order to realize your strategy It is easy to believe the statement but difficult to make it happen. The main reasons for this are (1) Different views of finance, HR and strategy formulators at the top level (2) Lack of ownership by the middle management (3) Absence of a simple methodology.

You need to use top-down as well as  bottom-up processes so that everyone  is involved in executing the strategy; although from different roles.  The execution is a cyclical process and not a one-off exercise. With each cycle, you improve your execution capability and get a better performance  from your strategy.  The main concern is how to link internal individual behavior to changing external circumstances ( customers, competitors, company, collaborators, context). 

For this the senior managers must present the strategy in a focused, easy-to-remember manner and ideally in a story form (hero, villain, circumstances requiring strategy and courage) in order to change the behavior. A manager is a key in this process because he is the one who participates in all the activities like strategy communication, translating the strategy to department, division or team, setting his/her own objectives, defining objectives for the team, coaching for performance, and evaluating performance. The quality of your Strategy Execution is strongly linked to the effectiveness of your managers. The better your managers carry out their Strategy Execution role, the better the results you will achieve. 

SPECIFIC STEPS 

Update your Strategy 
at least annually  based on changes in its competitive environment and on the Strategy Execution feedback from the previous cycle.

Communicate 

when finalized and approved by all stakeholders communicate it in a transparent and easy-to-understand fashion and create engagement for the new/adapted strategy.  One big event and a single strategy e-mail are not enough. Use other meeting platforms, discussion groups, informal and formal encounters, performance management sessions, intranets, websites, screensavers, coffee corners, billboards. You cannot over-communicate your vision and strategy! Senior managers are strategy ambassadors and in addition to the content, tone of voice and presentation skills are essential for an inspiring communication.

Cascade

You break down objectives into smaller chunks for the next organisational level. The process stops at the smallest unit level − these are often teams. In the end, the size of your organization will define the size of the cascade. You should aim for alignment horizontally and vertically and you also need to balance your objectives across perspectives. These 4 perspectives are: financial, customer, internal processes, and people. You can add other dimensions, as appropriate.  In addition to the balancing act on the macro and micro levels, you need to select the right indicators – often called Key Performance Indicators or KPI's −  to track the objectives and define appropriate targets.

Compare & Learn

Your strategy is a hypothesis. It’s your best estimate of the route to success … but it’s still an estimation. It’s crucial to take some time at the end of a cycle to go back and check your hypothesis, to compare your initial strategic assumptions with what you have learned from the reality of the Strategy Execution cycle that is being completed. By doing this, you will put yourself in the forefront − research shows that only 15% of companies take this step.

But at the same time, make sure you don’t just look back at your strategy: take a look at your Strategy Execution capability as well. All too often, we see companies jumping automatically to change their strategy, because they did not reach their projected performance. But, upon examination, there is nothing wrong with their strategy. The problem is in executing it. So, make sure you evaluate your execution capabilities as well!

This ‘compare & learn’ step will help you verify your hypothesis, update your strategy, and fine-tune your execution capabilities accordingly.

Manage initiatives

Initiative management is the activity in which your dreams run up against reality, your strategy meets operations, and resources are added to the strategy formula. This is one of the most difficult steps in Strategy Execution − and so it’s also where execution quite often goes wrong. Initiative management is about selecting, prioritising and executing the right initiatives: those actions that will lead to the realisation of your objectives. Initiative management can be broken down into 3 main activities. See the answer to question 7 for more details.

Set Objectives

Setting individual objectives is one of the best things you can do to improve performance − your own performance, and (if you have them) your team members’ performance. The positive impact of goal-setting is one of the most widely researched and scientifically validated aspects of today’s organisational science. Make sure you link all individual objectives with the strategy at the organisational level. If you don’t, you might have a great objective … but it’s of no use to the organisation! Also, make sure you focus on the way you secure agreement on the objectives. It’s the quality of the objectives – including the link with the overall company objectives – AND the acceptance of the objectives that will make your individual objective-setting a success.

Monitor & Coach

Regular coaching motivates people and increases their chances of success dramatically. It also simplifies the final performance evaluation. In fact, regular coaching is far more important than the formal review meeting somewhere around the middle of the year. Providing feedback in the right way − which is a key coaching skill − is a crucial step in boosting performance!  

Evaluate Performance
Most organisations conduct a formal performance evaluation at the end of the individual performance management cycle. Ideally, the evaluation should answer the question: have the individual performance objectives been achieved? Be sure you make an honest assessment. There are several techniques that can help you. One of the best known is the STAR technique.  Although many organisations link performance to remuneration, performance evaluation is − and should be − a separate process.