Fewer than half of C-level executives responding to a McKinsey on-line survey said they were satisfied with their company’s approach to strategic planning (McKinsey, 2006). Moreover, most managers agree that even where planning processes are adequate, an even more prevalent and serious problem occurs in: “failure to launch”; which lies in the gap between strategy and execution.
Ultimately, what this means is that senior managers have great ideas and a pretty good overarching vision of what business nirvana looks like, but the enigma remains: how to create an organizational alignment to actually close or remove the gap. So, if the majority of executives know what the problem is, then why are they not fixing it?
The following is a suggested list of remedies for poor or slow organizational results. The list is by no means exhaustive, but when taken together will have measurably positive effects on your organization. Some executive level managers, with whom I have shared these ideas, have told me that they would do it, if they only had time. My advice to them was to make time or have someone initiate and follow through for you. Having a clearly defined and effective cadre of action oriented strategies is only a starting point, but an important one in creating action that generates results.
Also, it is important to realize the cascading nature of strategic plans and the imperative to consistently refer back to objectives and vision during implementation. Each phase of strategic planning is affected by, and affects each subsequent phase. While strategic planning is both linear and non-linear in nature, the following linear model is used to demonstrate a simple strategic planning process:
Vision – Mission – Core Values – Objectives – Strategies – Action Plans, Project Plans and Frameworks – Execution – Monitoring, Evaluation, Refining.
Now, moving on to strategies which will bridge the gap between planning and execution…
1. Clearly picture what your business nirvana looks like (i.e. your vision) within your operating environment.
In other words, reaffirm to yourselves the business you are in. If you are in healthcare, you are in the business of promoting wellness, preventing illness, and diagnosing and treating illness when it arises. If you are Apple or Starbucks, you are in the business of creating and marketing (with an emphasis on marketing) lifestyle. In the former case, lifestyle happens to take the form of leading edge consumer electronic devices which are attractive, easy to use, reliable, and reflect and create what customers want. In the latter case, lifestyle takes the form of “funky” relaxation – either alone or with others – associated emotionally and psychologically with drinking coffee in a haven within a high traffic environment. If you are OTIS Elevators, you move people and goods horizontally, vertically, and diagonally through space better than anyone else. If you are Toyota, you create reliable, affordable, attractive, high-value and functional transportation devices for people and goods in the world (Note: these visions are paraphrased by the author’s synthesized memories of and knowledge of these organizations).
When you have a crystal clear idea of what you do, what you want to do, and the environment in which you do it in, then you can begin to execute in those areas in which you are competent. If you do not know the picture you want/need to paint and/or cannot convey it to your people or if you doing business in areas in which you are not competent or in a consistently weak position organizationally, then its time for a change. The best means of achieving the results you desire are to capitalize on your strengths and not to focus your energies on your weaknesses. If you do not have a killer strategy and are struggling to retain or gain market share, and there are no killer strategies on the horizon, you might want to seriously rethink your approach. Executing on poor strategy is like canoeing across the Pacific Ocean. You may succeed, but the odds are definitely stacked against you.
2. The right people in the right jobs doing the right things, i.e. motivating individuals and empowering teams
One of the biggest mistakes in the strategic planning execution gap occurs in the area of organizational development and its interface with the human capital. This aspect of organizational success is one of the most critical, and yet in many organizations it is the one agenda item left until the end of the meeting or not addressed at all. All the sound strategic planning in the world will not result in effective outcomes unless the organization has the right people doing the right things. No matter what organization we are talking about, all are made up of people.
The most highly effective employee is a happy employee, and vice versa. Leading edge technology companies like Google and Microsoft have figured this reality out and continue to leverage it to their advantage and overwhelming success. Secondly, it is important that your people are doing work that engages them. In other words, work that fits with their personality, professional goals, aspirations, desires, wants, and needs. Therefore, a humanistic approach toward encouraging and promoting individuals within the organization into areas in which they are competent, energized, and enthusiastic should be a priority and part of any good strategic execution plan. For organizations who do not know how to do this, I would recommend beginning with Myers Briggs Type Inventory (MBTI) style personality assessment or similar assessments.
The process of discovering one’s individual and work personalities can be both entertaining and enlightening for both managers and employees. It also provides individuals with information on where they might fit best in the organization. In the event that one’s personality, professional goals, values, and/or beliefs are not congruent with the organization they are with, it may be better for them to find an opportunity to realize their potential in another environment, rather than trying to mould and shape core beliefs and behaviours to the environment they are in. The latter seldom works for any length of time, and creates cognitive dissonance and stress. If this dissonance and stress is pervasive enough, its deleterious results can echo throughout the entire organization. Regardless of organization type, personality inventories should not be used as the basis for dismissal. Nevertheless, both worker and organization need to realize the benefits of alignment and best fit between people and activities.
Over the past 10 years, enough research has been compiled on team-building to fill entire libraries. In and amidst the tomes of literature on this topic, the only item I will emphasize and discuss briefly here is this: teams must have a leader with bona fide authority and decision-making power. All of the teamwork buzzwords like inclusion, participative, facilitative, collaborative, synergistic, storm, norm, form, perform and the like mean nothing in the face of a leadership void. This applies to high level teams (e.g., C-level Steering groups) right down to project teams responsible for limited-scope outcomes. Without one readily identified leader (Note: not two leaders), the success of the team will be hard wrought, fleeting, and most of all, unlikely. It is my opinion that this precondition must be met. Be careful about assuming the designated “person in charge” is the one with the actual or exclusive decision-making power. Most organizations have informal networks and reporting relationships that may even pre-empt formal ones. Healthcare is a good example. While hospital administrators have significant authority on resource allocation and administrative activities, physicians (GP’s and specialists) still hold considerable power, and some would say the “balance” of power when it comes to overall operational decisions.
3. Make detailed strategic planning and management part of the integral web of operations and not just an annual or esoteric activity done at the corporate level
Detail means that situational information is constantly updated and used as the basis for strategic decisions, and that reasonable, well-thought-through ways of accessing information are available and used to create the actions plans, performance metrics, and dashboard reports. If, after a reasonable period of time has elapsed, you find your metrics unchanged or your action plan un/under-implemented, then you need to regroup, act, adjust and measure. Another paradigm often used is plan-do-study-act-refine. This is the most difficult aspect of organizational behaviour. For some, it is less painful to spend valuable time compiling a list of excuses for not taking action, than it is to simply act.
Once you have developed an action plan, make sure you act. Most importantly, act now. When developing an action plan, think about the things you need to do and whether or not they will yield the desired results. Always consider the range of outcomes and the urgency and impact of the consequences of those outcomes. For instance, if the aggregate outcomes of a set of actions take you to where you want to go, then act. By all means, discuss it with your boss, your legal department, your finance area or with other experts, but make sure you do it and whatever you do, do it with the right intent for your customers, clients, or stakeholders (whichever is appropriate in your business).
You may wish to try to quantify the outcomes and consequences into probability and impact, with specific regard to magnitude of outcome. You will want to avoid “deal breaker” actions that have a low probability of success and extreme impacts on your organization. Alternatively, outcomes with a high probability and magnitude of success and low-risk of negative impact should rank high. Employ whatever methodology you require to make a decision, but make sure you do not get caught up in developing models to the exclusion of taking action. Last, but not least, make sure you consistently refer back to the overall strategic plan, business plan, operating plan, or whichever plan or plans your department is required to follow. Are you meeting your targets? Are your strategies working? Are you objectives SMART (specific, measurable, attainable/aggressive, realistic, and time-limited)? Are the actions you are taking having the desired effect? What could you do better, sooner, more of, in order to take you where you want to go? Go to the level of detail necessary to reduce decision-based risk to a minimum – then act.
4. Follow through on items identified in your strategic plan
This is THE MOST IMPORTANT indicator of whether or not an organization will realize its strategic vision. Organizations that follow through on their plan, adjust their course from time to time, but continue to take action, will succeed. Those who do not follow through and take action almost assuredly will fail. Yes, by all means, adjust your sails if need be, but make sure that you are out at sea when you do this. A dry-docked sailboat is not going anywhere, and no amount of sail adjustment will have an impact. If you are not sure how to follow through on your strategic planning, then find out how. If the timing is wrong to launch your program, then take action to prepare for when the timing is right. Do not, however, use “timing” as an excuse to unnecessarily delay or defer your project, program or strategic initiative. Further “research” and/or “study” are terms often used by government when an unpopular political decision is being faced. If you are reasonably certain and have done the necessary planning, go ahead and launch your project, program, or initiative.
5. Provide adequate incentives for people to make decisions
Empower your staff. This means, once your strategy is set and your program and project plans are in place, allow your people to make decisions to move the project and/or organization forward. If you require every decision to be passed by one focal point, this point will become a bottleneck; resentment will ensue, and success will become either delayed or elusive. It is frustrating for competent staff to have to pass everything by a micro-manager. If this is a required, it shouts and breeds distrust to event the most ardently committed employee. Over time, you will lose good staff, and your organization will suffer the consequences.
6. Kaizen – manage through incremental change rather than widespread change
Wikipedia describes Kaizen as a Japanese Management concept which, directly translated, means: change for the better, or change for improvement. In English, it is embodied in the management philosophy of Continuous Quality Improvement (CQI), upon which many firms (mostly manufacturing) have focused in recent years. Kaizen is used in the Toyota Production System (TPS), which over the past year or two has come into vogue in management circles as a panacea for what ails the organization. It is implicit in Kaizen that all company employees will engage in the removal of waste and duplication, and that all will contribute to the betterment of the organization. Three main tenets of Kaizen are:
(a) Consider the process and the results (not results-only).
(b) Engage in systemic thinking of the whole process and not just that immediately in view (i.e. big picture, not solely the narrow view).
(c) Learning, non-judgmental, non-blaming (because blaming is wasteful) approach and intent.
The Kaizen approach has clearly been effective worldwide. However, there are very real barriers in North America to implementing this approach. For instance, organizations who announce they are now using Kaizen, but do not offer any support through training or by providing rationale for the change, often fail. Secondly, Kaizen is easier to implement in “collectivist” v. “individualist” cultures. The operative principle behind Kaizen is to move toward a “one for all and all for one” style of operating. Western cultures are more individualist than collectivist, and therefore focus more on “one for one” and the “all can buzz off unless they are useful for the one”. Hence, Kaizen was formulated within and is used most effectively by Asian and other more collective cultures.
Nevertheless, Kaizen as a principle and practice can be implemented with successful results if the conditions are right and the organization implementing it is ready for it and has readied its employees. Creating and conveying the emotion of pride in craftsmanship and output is a critical aspect. Organizations unable to instill this key psychological construct in their employees will have difficulty implementing Kaizen and/or TPS tenets into its operations. At the very least, an organization which takes an interest in its employees will see dividends not experienced prior to embarking on the program. In essence, any action-based program which achieves measurable, positive results is desirable.
7. The importance of communications, public relations, and giving a word of praise to your employees
The importance of communications and public relations (C/PR) cannot be overstated. In order for any bridging of the strategy-execution gap to occur, it is imperative that an organization have not only sound external communication strategies, but that it’s internal C/PR strategy is above reproach as well. Ensuring that your corporate strategic plan either implicitly or explicitly includes employee recognition, and outlines methods to deliver this message, is critical to success in the 21st Century. People want to believe the work they do is both valuable and valued; that they, themselves are valued; and that both they and their work are appreciated and critical to the overall success of the organization. There are exceptions to this rule, but in the main, most people respond favorably to praise. Corporately, an organization needs to ensure the products or services it creates are indeed worthy of praise and that this praise and other reward systems are in place. Do not for a second think that financial rewards are enough to bring all employees to a place of pride in their work. Creating a C/PR strategy that strongly and consistently reinforces the positive and affirmative beliefs of employees about the organization is critical.
It may be possible for an organization to have a deep-seated pride in the quality of product or service it provides, but in order to retain this pride over the long-term, a sound internal C/PR strategy will need to be crafted and implemented consistently over time.
8. Removing functional and structural “silo-ism” and “turfism”
One of the largest and most insidious contributors to the gap between strategy and execution is found in functional “silo-ism” and “turfism” that exists in most organizations, and particularly in mid-to-larger sized enterprises.
Turfism is a term used to describe the concept the notion that at one or more levels in the organization, there exist managers who are so risk-averse that they hoard information, people, and processes in order to ensure their continued existence via the continued existence of their functional or structural domain. This turfism is most often the result of personal insecurity or habits and ultimately a poor self-image (either personally or within the organization). Silo-ism is a cousin of turfism in that, structural or functional silos or stovepipes are often created by turfism which allows for flow of information within the silo. However, little to no information crosses the silo barrier to departments outside the silo. A silo can either be a functional area (i.e., Finance, IT) or a sub-area within the silo. A silo can also be represented cross-functionally like a strata, chain, or enclave of managers who refuse to share information. There is no simple way to combat either turfism or silo-ism without taking direct aim at the cause.
Turfism grows like ivy and with it, a creeping paralysis that infects all it comes into contact with. If these organizational illnesses exist in your organization, recognize and remove them as soon as possible. Earmarks of turfism and/or silo-ism include: one person making all the decisions in a specific program area or SBU; lack of cross-functional communication; staffing growth far exceeding the relative functional responsibilities or value of the functional area; unhappy, isolated, fearful, tight-lipped and/or vitriolic staff; and high quality but below average volume of production and outputs/outcomes. These are only some of the symptoms of silo-ism or turfism. Be aware of it and take purposeful action to remove it once it is discovered.
9. Pay attention to core business functions and operations i.e. return to what it is you are doing rather than becoming fragmented or diluted
Every successful organization goes through cyclical periods of expansion and contraction – much like our economy. A good management team must be able to accommodate these vicissitudes and avoid allowing one functional area to become pre-eminent during an “up” or a “down”. Irrespective of how important the Finance, IT, or HR department is in relation to your organization, you are still in the business of producing and serving your target market. When the dust settles you are still responsible for growing your business by capturing market share in existing or developing markets, or in developing markets outside of your primary markets.
This emphasis on market share means that customers are buying your products and services, which falls directly within your operational and marketing areas. So, while Finance may have a critical role in acquiring additional resources to expand the business and controlling and managing revenues and costs, it does not specifically generate business. It may facilitate growth, but it does not, in effect, cause it.
Information Technology is a support service area which can facilitate cost reductions or improvements in efficiencies or effectiveness (but often results in absolute cost increases in the cost of doing business). Over the past 10 years, we see more and more organizations viewing IT as a core business area, rather than a support area. This is detrimental to the ongoing operation of the business, since IT is important, but does not usually, in Peter Drucker’s definition of business, “create a customer”. The HR department is also important area and is instrumental in hiring the right people for the right jobs at the right time. However, it too, is simply a support service area for the operations and marketing group.
Therefore, be clear and careful about assessing the business you are in and which area should be leading growth. Also, if you are horizontally or vertically integrating into businesses outside of your core business area, you will need to monitor these operations closely to ensure that they indeed contribute to your growth and prosperity. Acquisitions and mergers may lead to enhanced organizational synergies and/or profits, but they may also result in ongoing fragmentation and cultural ambiguity which may very well detract from the organization’s primary business or mandate. Remember, it is your marketing and operations departments that do most of the executing, so unless they embrace your strategy, you may indeed have a problem.
10. Evaluate your progress in terms of how well you are meeting your strategic objectives.
Larger organizations are equally as prone to erring in this regard as start-ups. Strategic goals are sometimes so esoteric, generic, or vague that it is impossible to know what success looks like let alone martial the resources necessary to achieve it. Furthermore, it may be difficult to ascribe gains or performance experienced to any one or more strategy or decision. It is therefore critically important to break your metrics down to the most basic measures of success. Each department should have its own set of metrics and be responsible for reporting its success on no more than a quarterly basis. Naturally, some businesses are set up to do this more easily than others, but either way, it is important to set quantifiable goals in order to achieve measurable success.
However, do not make metrics your gospel. While they are an important aspect of organizational performance, they are still only one aspect. Metrics are a sound way of quantifying aspects of production or service performance, however, it is extremely difficult for metrics to sufficiently measure the overall effectiveness of an organization that is either growing or shrinking in accordance with cyclical ups and downs. Furthermore, the overall quality of an organization and its products/services (particularly services) are sometimes not readily quantifiable. Be mindful of these factors and that there is a multiplicity of causal factors behind every metric.
11. Know your business culture and execute strategies within that culture
Early in my career, I had the experience of working for a large organization which had little respect or regard for employees. The organization was risk-averse in the extreme, with few sound decisions were made during my tenure. The decisions that were made, were often the result of “group think” and frankly debatable in terms of their strategic efficacy. Senior management of the organization was peculiarly risk averse and often change was avoided. When change was implemented, it was done in such a haphazard way, that profound and lasting animosity toward the organization was the result. The expression of professional opinion was also rare, as the fear of job loss was prevalent, as was being ostracized by other managers within the organization.
Though roles in the organization were stressful and the pay mediocre, words of praise were few and far between. As a result, a union mentality developed in which a schism between management and the worker was created. Over time, this gulf widened, with management having an intrinsic distrust for employees and employees an intense distrust and even dislike for management. Negotiation was position-based rather than interest based.
Despite the overall negative, oppressive environment, a few bright spots existed. These departments had strong leaders who understood the value of praising staff who did their jobs and who went above and beyond the call of duty in completing their assigned responsibilities. These people were able to create an environment where employees were encouraged to speak up about how to improve their department’s processes, procedures, and overall operations. Not only were their suggestions “listened to”, they were “heard” and acted on immediately. Needless to say, jobs in these areas were highly coveted and openings rare. Isn’t it shame that the rest of the organization could not have grabbed onto some of the practices of these higher performing areas.
Over time and as a result of a massive (and poorly planned and executed change management initiative) many of the managers left or were let go. Those that remained were security oriented, process driven and frightened. The organization continues to limp along, though successes are few and far between.
This need not have been the case. There were ample opportunities for senior management to change the culture of the organization. Unfortunately, as good managers and others left and were replaced by new recruits, the remaining managers (i.e., the risk-averse, controlling, process-oriented crowd) oriented and these new staff. The cycle continued, and continues. In this organization, any amount of strategic planning will not result in successful performance outcomes as there is a complete misalignment, even disconnect, between strategy and execution. Massive, top-down change will be required in this culture to make a difference.
Whatever the culture of your organization, you have three key choices:
(1) make due with what you have and tailor-make your decisions within the cultural limitations,
(2) initiate massive cultural change and marry these to corporate strategy, and
(3) make strategic, incremental cultural changes and evolve and associate strategy and execution activities with these changes.
12. Two words that can rejuvenate an organization – change management
Change management has come to be associated most closely with IT projects over the past ten years. However, the field of change management contains principles which transcend any one or number of projects. With the right change management approach and a sound communications and internal public relations program, organizations can overcome great hurdles in their efforts to succeed. While no change management process is perfect, by virtue of the fact that the organization takes the time to plan and manage change, it demonstrates to it stakeholders (employees, customers) that it is serious about wanting to improve conditions and performance. Wherever possible, change planning and management should be implemented when embarking on any project, program, or overall organizational change.
Remember Lewin’s model: unfreeze – change – refreeze.
In conclusion, there are a multiplicity of reasons why a gap or gulf might exist between the strategic intent and plan of an organization and the strategic outcomes related to implementation. This disconnect may have many causes, yet can be boiled down to a very antecedents. An organization is aggregately only as good as the people it employs, it’s inward and outward understanding, and the decisions it makes. If an organization’s strategic plan is clear, well thought through, reasonable, and respects and values the contributions of its most precious resources – it employees – then there is a good chance it will be a good performer or at least well on its way. Employees need to be enfranchised to contribute and to have those contributions valued. While people are the most important aspect of bridging the strategy-execution gap, having good people is not enough.
The organization must be diligent and thorough in its intent and its research. Demographic, financial, marketing, and other predictive and evaluation metrics are required to assess and leverage the growth and sound aims of the organization. The organization must have detailed knowledge of its economy, marketplace, growth potential, and position in its industry. Furthermore, it needs to evaluate its performance regularly and empower it employees to take the right action (to reduce duplication, waste and redundancy) and to adjust or correct changes in course over time. In order to retain and maintain talent, a sound, internal C/PR strategy must be used to create a feeling of “belongingness”, unity, and pride.
Finally, like any key business process, there needs to be a balance between strategic planning and execution. Where planning occurs in the absence of execution or execution occurs in the absence of planning, difficulties are sure to follow. Do not forsake one for the other, but rather keep both in balance and learn and adjust as you go. Whatever you do, avoid spreading or inducing vagueness, ambiguity, and fear throughout the organization – you will thank yourself for it and the results will speak for themselves. Last, be sure to understand your culture and how change management practices (including internal communications and public relations) can be used to effect change. People respect fair, decisive, and sound thinking and action. It is important to write down what you intend to do (in a strategic plan) and then employ strategic action to achieve your intentions.
Remember, failure to act is the primary cause of business failure.