You’ve set organizational goals and formulated a strategic plan. Now, how do you ensure it gets done? Strategy execution is the implementation of a strategic plan in an effort to reach organizational goals. It comprises the daily structures, systems, and operational goals that set your team up for success. Even the best strategic plans can fall flat without the right execution. In fact, 90 percent of businesses fail to reach their strategic goals, which researchers believe is due to a gap between strategic planning and execution.
“If you’ve looked at the news lately, you’ve probably seen stories of businesses with great strategies that have failed,” says Harvard Business School Professor Robert Simons, who teaches the online course Strategy Execution. “In each case, we find a business strategy that was well formulated but poorly executed.”
How can you equip yourself and your team to implement the plans you’ve crafted? Here are five keys to successful strategy execution you can use at your organization.
KEYS TO SUCCESSFUL STRATEGY EXECUTION
1. Commit to a Strategic Plan
Before diving into execution, it’s important to ensure all decision-makers and stakeholders agree on the strategic plan.
Research in the Harvard Business Review shows that 71 percent of employees in companies with weak execution believe strategic decisions are second-guessed, as opposed to 45 percent of employees from companies with strong execution.
Committing to a strategic plan before beginning implementation ensures all decision-makers and their teams are aligned on the same goals. This creates a shared understanding of the larger strategic plan throughout the organization.
Strategies aren’t stagnant—they should evolve with new challenges and opportunities. Communication is critical to ensuring you and your colleagues start on the same page and stay aligned as time goes on.
2. Align Jobs to Strategy
One barrier many companies face in strategy execution is that employees’ roles aren’t designed with strategy in mind.
This can occur when employees are hired before a strategy is formulated, or when roles are established to align with a former company strategy.
In Strategy Execution, Simons posits that jobs are optimized for high performance when they line up with an organizational strategy. He created the Job Design Optimization Tool (JDOT) that individuals can use to assess whether their organization’s jobs are designed for successful strategy execution.
The JDOT assesses a job’s design based on four factors, or “spans”: control, accountability, influence, and support.
“Each span can be adjusted so that it’s narrow or wide or somewhere in between,” Simons writes in the Harvard Business Review. “I think of the adjustments as being made on sliders, like those found on music amplifiers. If you get the settings right, you can design a job in which a talented individual can successfully execute your company’s strategy. But if you get the settings wrong, it will be difficult for any employee to be effective.”
3. Communicate Clearly to Empower Employees
When it comes to strategy execution, the power of clear communication can’t be overlooked. Given that a staggering 95 percent of employees don’t understand or are unaware of their company’s strategy, communication is a skill worth improving.
Strategy execution depends on each member of your organization’s daily tasks and decisions, so it’s vital to ensure everyone understands not only the company’s broader strategic goals, but how their individual responsibilities make achieving them possible.
Data outlined in the Harvard Business Review shows that 61 percent of staff at strong-execution companies believe field and line employees are given the information necessary to understand the bottom-line impact of their work and decisions. In weak-execution organizations, just 28 percent believe this to be true.
To boost your organization’s performance and empower your employees, train managers to communicate the impact of their team’s daily work, address the organization in an all-staff meeting, and foster a culture that celebrates milestones on the way to reaching large strategic goals.
4. Measure and Monitor Performance
Strategy execution relies on continually assessing progress toward goals. For this to be possible, key performance indicators (KPIs) should be determined during the strategic planning stage, and success should be defined numerically.
A numeric goal allows you and your team to regularly track and monitor performance and assess if any changes need to be made based on that progress.
For instance, your company’s strategic goal could be to increase its customer retention rate by 30 percent by 2022. By keeping a record of the change in customer retention rate on a weekly or monthly basis, you can observe data trends over time.
If records show that your customer retention rate is decreasing month over month, it could signal that your strategic plan requires pivoting because it’s not driving the change you desire. If, however, your data shows steady month-over-month growth, you can use that trend to reasonably predict whether you’ll reach your goal of a 30 percent increase by 2022.
5. Balance Innovation and Control
While innovation is an essential driving force for company growth, don’t let it derail the execution of your strategy.
To leverage innovation and maintain control over your current strategy implementation, develop a process to evaluate challenges, barriers, and opportunities that arise. Who makes decisions that may pivot your strategy’s focus? What pieces of the strategy are non-negotiable? Answering questions like these upfront can allow for clarity during execution.
Also, remember that a stagnant organization has no room for growth. Encourage employees to brainstorm, experiment, and take calculated risks with strategic goals in mind.
Source: Harvard Business Review, 2017