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It's that time of year again — when companies (and many of our clients) go through the annual strategic planning process. For business leaders, it's a chance to take a measured look at the big picture, and to align the executive team to a common set of objectives. As individual plans and strategies are rolled into one, the leadership team weighs priorities, assesses potential risks, and debates various options for strategic investment and growth.
Every business has its own unique process for developing the strategy. Some seem to re-invent the process each year (referred to as “process improvement,” of course); others have a very deliberate and structured methodology. But in the end, all of these approaches result in some sort of written deliverable(s) — whether it's primarily a spreadsheet with the financial plan, or a detailed set of account plans that are integrated with business development goals, HR initiatives, and R&D investments. Hopefully, the plan also includes a set of quantifiable metrics for tracking progress along the way.
In a previous newsletter, we discussed the importance of strategic alignment — making sure that the executive team, and organization as a whole, is truly on-board and committed to the strategy. Real strategic alignment comes from two primary sources: (1) a connection between personal objectives and organizational objectives, and (2) addressing the often hidden, internal barriers to success. Without strategic alignment, even the best business strategy is destined to fail — or at least to significantly underperform, versus what “might have been.”
It's easy to say, of course, but often very difficult to put into practice. And even when the team comes out of the planning process 100% aligned and committed to the strategy, how do you ensure that the strategy “sticks”? In other words, how do you keep the team focused, energized, committed, and aligned over the course of the year, as the reality of day-to-day execution and shifting market realities threaten to derail or at least cross-thread even the best of executive teams?
Making the strategy “stick” requires real work — proactive efforts that go beyond the day-to-day events of management and execution. Every company is unique in the ways it can best ensure that strategy execution is as effective on Day 365 as it is on Day 1. Leadership styles, the corporate culture, and the strategy itself will contribute to how organizations can best achieve this over the long term. So although there are no cookie-cutter answers, here are some general questions and tips you might consider as you move into execution of the strategy:
• How often does the executive team get together to focus strictly on the strategy? Undoubtedly, you hold regular management team meetings. But how often do you meet during the year for the express purpose of debating and furthering the strategy, and applying the combined horsepower of the entire executive team to the biggest challenges you face? Yes, it's another meeting, but when properly structured it can deal not only with external challenges, but can also address internal challenges and barriers that are often at the root of strategy roadblocks. • What's the most "dysfunctional" aspect of your leadership team in execution of the strategy?
If we separately asked each member of the team to answer this question, would they each say the same thing? And if it's that obvious, what's being done about it? Good leaders know that these kinds of difficult conversations are critically important to team success. But they're called “difficult” for a reason — and if not done well, can actually cause more harm than good.
• How often are members of the leadership team doing things that they personally aren't convinced is the right strategy? And more importantly, do you know when this is the case? Good leaders can and should disagree — in fact, a high-performing team will have a healthy dose of animated debate on critical issues. They key is to ensure that individuals have a channel that works for them to air and resolve these differences, so they can be just as effective in this type of situation.
• How strong are the measures of success that were defined for your strategy? Many a great plan ends up on the shelf — never to be seen again (or at least not until next year's planning cycle). And while few businesses these days run without traditional financial metrics, there are just as many non-financial metrics to be leveraged as well. But don't just spend time and effort tracking the well-known metrics — things like retention rates and customer satisfaction — without understanding the specific implications to the strategy, and to organizational behavior. We've seen our share of companies tout high executive retention rates — while simultaneously starving for fresh perspectives and new ideas.
In the end, a strategy needs regular care and feeding at the individual, team, and organizational levels in order to have the best chance of long-term success. The danger is that day-to-day execution can divert us from this important task — leaving us stuck in the infamous “urgent but not important” quadrant for much of the day, the week, and (before you know it) the year.
There are plenty of external threats to successful strategy execution — don't compound them by ignoring (or exacerbating) the internal ones. Use strategic alignment to your competitive advantage.
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