From strategy to execution - Make it happen in 2020!
Bridging the gap between strategy and execution is nothing new.
As convinced as we may be about what needs to be done to make progress as an organization, … implementing this needed change in our daily practice is another cup of tea. But beware: ‘vision without action is a daydream, action without vision is a nightmare’. In an article in Harvard Business Review, Michael Mankins found out that executives say they lose about 40 % of the potential of their value while breaking it down in execution. For the sake of ease, we could call this 40 % loss the spread of the gap between strategy and execution. This gap is staggering.
So, being convinced of the need for self-organizing and semi-autonomous teams as the ‘engine’ for adaptive organizations, the question we must ask ourselves is: how do we actually move from strategy to execution, as fast as we can?
First, according to Wiita and Leonard in an article in Harvard Business Review, an organization must really commit to an identity: a shared understanding of values and capabilities. Apparently, high-performing teams seem to spend almost 20 % more time to defining their ambitions to execute the organizational strategy as opposed to less performing teams, and 12 % more time in aligning the ambitions with the overall organizational strategy.
For sure, the strategy also must be translated in everyday processes capabilities and executable initiatives: this is where strategy descends from heaven to earth and becomes more tangible.
A third way to successfully bridge the gap is by concentrating on the unique cultural factors that fuel success. Or to put it differently: try and resist the temptation to drive traditional change programs. You can do so by spending enough time to dialogue about cultural enables and barriers.
As per today, it has become obvious the old-fashioned ‘plan-then-do’ approach has become obsolete, even dangerous. Having said this, more attention than ever before has to be spent to a thorough implementation strategy. The new paradigm is called ‘decide-do/refine-do’. It is an agile ‘test-and-learn’ approach that should result in a far better implementation of a given strategy in the current tumultuous business environment. See this agile approach as a series of timed sprints. Call them micro-battles: move forward, test the water, learn, refine your strategy based on the results. Many companies seem to be afraid of this approach: they prefer one big bang, with the risk of one big failure, rather than achieving bigger results by applying a series of smaller, more productive bangs.
According to Michael Mankins in a Harvard Business Review paper, there are five lessons to be considered if you really want to close the strategy-execution gap.
First, consider strategy as a continuum: it is more of an agenda of decisions than a fixed plan. This means: a strategy is a sum of decisions that have to be executed. Good leaders make near-term decisions and have them executed, while always keeping the longer-term destination in mind.
Meanwhile, executing a given strategy should never keep us away from valuing flexibility. In the same mindset, we should think of strategy as a portfolio of options, not a bond. To use the stock market metaphor: when volatility is high, strategic decisions should best be seen as call options, not as fixed bonds.
Another important key to success is the development of response mechanisms. Companies capable of reacting quickly and effectively, systematically come out as winners.
Obviously, when there is too much strategy and too little execution, this will lead to stress amongst the team members. Lack of clear strategy, too little efficiency and too many projects at the same time can be a motivation killer and stress inducer for many people within your organization. On average, companies lose 149 million USD for every 1 billion dollar they spend on strategic initiatives due to poor project performance. Companies lose 40 % of their strategy potential value when trying to break the strategy down in execution. So, we see several solutions to eliminate this huge risk.
First, make priorities by daring to say ‘no’ to challenges you don’t consider to be priorities.
When selecting projects, make sure they do fit in the strategy and purpose of your organization. Bridging the strategy-execution gap is only possible when the strategy fits with the purpose and is visible to all the employees. In case projects do not run smoothly, be fast to trace the reasons why and solve the situation.
Remember the new paradigm: decide-do/refine-do.
In a wilderness of overwhelming demands put on teams, it is key to prioritize to become a strong team: setting clear directions, crafting a clear-cut purpose serving as guiding light for taking decisions. Lower performing teams spend more than 83 % time in firefighting and dealing with operational issues, rather than with strategic ones.
Another key element to help you bridging the strategy-execution gap is shaping the future instead of running behind or being reactive. Proactive teams can much more easily make the translation from strategy to everyday execution. Thinking ahead – not surprisingly – sets the standard. Spend enough time in strategizing and translating into actionable ambitions, and in engaging the whole team and communicating a well-defined direction. Take your time to interact with all key stakeholders, rather than losing time fighting fires. Because, after all, isn’t it a much wiser idea to prevent the team house from catching fire than trying to tame the devastating flames?
‘Good leaders make near-term decisions and have them executed, while always keeping the longer-term destination in mind.’
‘Try and resist the temptation to drive traditional change programs.’
Nathan Wiita and O Leonard: ‘How the most successful treams bridge the strategy-execution gap’, Harvard Business Review, November 2017
Michael Mankins: ‘5 ways the best companies close the strategy-execution gap’, Harvard Business Review, November 2017
Els De Geyter: ‘Turbulente tijd(en). Hoe je de hectiek op de werkvloer kan aanpakken’, white paper Human Reef.