Business strategy definition and execution
Not making headway on your business strategy?
Most business strategies fail. In the ten best years ever in economic history, 1988 to 1998, in seven developed countries, fewer than 10% of companies achieved their growth targets of 9%. Only about 12% of large companies achieved a growth rate greater than 5.5% with shareholder returns greater than the cost of capital (report by Bain and Company). Today the record is just as dire.
It is possible to craft and execute a clear strategy
70% of business strategy failure is due to poor execution. Research by Kaplan and Norton showed that even with good business strategy, organisations were not able to execute their plans and achieve their targets.
So why does delivery continue to elude you?
Executing business strategy is itself anything but a simple problem. Execution may be made more difficult by any of the following issues:
- A culture of helplessness, mistrust and blame.
- The lack of a common view of what is important.
- Strategies and plans made based on insufficient or incorrect data.
- An inadequate understanding of the external environment.
- A strategy process that excludes everyone but a select core team so that the people tasked with implementation feel alienated from the very beginning.
- Poorly made decisions. Sometimes those accountable for decisions prefer to leave the decision for another workshop. Or they ignore the team and make arbitrary decisions.
- The lack of a structured execution process.
- A lack of congruence between vision, goals and current reality. Goals may be over-ambitions or may lack any stretch.
- Plans that at too complex.
- Inaccurate financial estimates and inadequate financial controls.
The good news is that it is possible to craft the strategy for your organisation in a way that engages the people tasked to deliver the goals. And the strategic conversation can be kept alive and vital throughout the strategic period you set for yourselves.
But there is another problem
The language of business strategy and action has become confusing. No two organisations think about business strategy in the same way. Some think of financial plans, others consider products and services. Some speak about target markets and value propositions and others focus on quality and process. Still others consider human resources and learning. These views are one-dimensional. Though some organisations lean to one view or another, it is quite possible to multiple views, each with its own vocabulary in the same organisation. The strategic conversation is flounders in this world of confusion.
Engage all levels in your organisation in the same strategic conversation
The best business strategy conversation covers all the relevant approaches. When your whole organisation uses the same terminology to define their strategic intent and the actions they intend to take to achieve it they are able to understand each other. The master-stroke of Kaplan and Norton was to put the major perspectives together into a systemic framework, each level drawing on the previous and supporting the next.
Effective operations are a pre-requisite for success. Visionary strategy, defined and executed makes the difference
For teams to deliver they must share information, conversing about daily operations, new directions and how to implement change
At StrategyWorks we offer facilitated workshops and one-on-one coaching based on well-defined models or frameworks to:
- Define your business strategy
- Translate your business strategy into a working model
- Execute your business strategy
Defining Business Strategy
Business strategy usually emerges from conversation over an extended period. Those involved in the discourse characteristically read or listen to new ideas and reflect on what they learn between strategic discussions. More often than not, this is not a neat, clinical listing of issues with decisions tabled, seconded and ratified. In spite of this, there are excellent conversation models for stimulating conversation on the possible futures to highlight fruitful directions. There comes a time to bring everyone together to work through some of these models to peg points of agreement and make final decisions on areas where the way forward may not be so obvious. Effective execution depends on clear strategic decisions. These decisions can be made in the ‘Define Strategy’ engagement. At StrategyWorks we organise the discourse into three broad areas:
- Who are you?
- Where are you now?
- Where do you want to be?
The frameworks within each area of discourse provide a structure for interaction. Teams look back, around, inside and forward. Participants reach insights, make decisions and take away questions for reflection. At the end of the process they are ready to agree their approach. This is the first step in the next area of discourse in which we ask:
- How will you get there?
With the strategy formulated in various models, the team is ready for the next step; ‘Translate strategy’
Translate business strategy
- How will you get there?
- What are the first steps you need to take?
Here they converge their thinking into a set of decisions. They capture the detail of their decisions in a Strategy Map. We assist them to create a single page view of their strategy. The Strategy Map forms the basis of the Balanced Scorecard as well as the foundation from which to create the various plans required to execute strategy.
Execute business strategy
‘Define your business strategy’ and ‘Translate your business strategy’ set the leader team up to execute.
A solid plan is an asset in this phase but no-one can perfectly predict the unexpected. Leaders therefore benefit from set meetings to review operations and strategy. We usually agree these meetings as part of the ‘Translate your Business Strategy’ process.
At StrategyWorks we also believe that carefully defined and executed projects are the best way to execute strategy. And for this we have a well developed planning offer consisting of a number of different types of Project Workshops.
Sometimes however the ‘hidden unexpected’ stops teams in their tracks. They stop look around but cannot see the obstacles. When this happens we, at StrategyWorks suggest coaching or an ‘Action Research’ intervention, to collect information, analyse causes and agree a way forward.