What Does A Good Strategy Execution Require
If you have the right strategy and execute it well, your business will thrive.
It’s that simple.
But given your strategy is smart, what’s required to execute well on your strategy? This article outlines a simple framework to execute your strategy.
What is strategy execution
To answer that, let’s first look into what a business strategy is. The Cambridge Dictionary defines it as:
A detailed plan for achieving success one or all parts of a business
Usually, a strategy comprises two things:
- Strategic goal statements (We want to become XYZ or make x amount of revenue) as well as
- High-level strategic measures (the detailed plan) to achieve that goal
A simple strategy framework that I like to use answers these two questions:
- Where do we play (what’s our target market/customer)?
- How do we win (why will our customers buy from us instead of buying from the competition or not buying at all)?
Strategy execution is the act of putting that strategy to action. It’s the process of completing all tasks that are derived from strategic measures and that support reaching strategic goals.
WHAT’S SO DIFFICULT ABOUT STRATEGY EXECUTION?
The problem with strategy execution has to do with the long-term nature of strategy. Strategic goals are usually formulated to describe a future one to five years from now. Translating that into something actionable for your next few weeks or months is difficult.
Another problem is that often, the strategy is not even clear to the team. Leadership has developed a strategy, sometimes over months, and knows it in and out. However, the staff level often only gets a few PPT slides and maybe a town hall or all-hands meeting.
And then, there are challenges in strategy execution that are not caused by your strategy whatsoever.
Think about it: Who needs to execute your strategy? It’s your team, your existing organization. With all its strengths and shortcomings.
What you need for strategy execution
Based on the above, I developed this simple strategy execution formula:
Strategy Execution = (People + Process + Tools) x (Transparency + Breakdown)
The first part of the equation is your Organizational Capability. It describes the resources and potential you have in your team to execute your strategy.
The second part of the equation describes the Strategic Clarity, namely transparency and breakdown.
Let’s have a closer look at each of these components.
Your organization executes your strategy. This sounds obvious, yet is critical to understand:
Just because you develop an ambitious strategy doesn’t mean you change the way your organization operates.
Specifically, you have to optimize and integrate three different areas: People, Processes and Tools.
The most important asset you have. Before thinking about strategy execution, you have to think about people. Ask yourself these questions to examine the state of your organization:
- Do I have the right people in the right seats?
- Is there a well-defined org structure with clear responsibilities
- Does everybody have what they need to be successful?
- Are there meaningful incentives in place and people compensated in a way that supports performance?
- How good am I in acquiring and onboarding new talent when needed?
- How do people collaborate, what’s our culture like?
If you have an answer to all of these questions that satisfies you, great. If you have identified gaps, start to work on them immediately. People related topics usually take longest to fix. But a well-setup organization is critical for the success of you new strategy.
The quality of your processes determines how efficient and stable your execution will be. Your strategy might include more of the same (e.g. sell more), transposing existing processes into new areas (e.g. new markets) or building new processes (new channels, products or services).
Therefore, it’s important to ensure you current process setup is working well.
Ask yourself the following questions:
- Do my processes produce the outcomes (quality/quantity) I want?
- Do the processes produce these outcomes consistently?
- Are my processes documented? And does everybody know where to find and how to use that documentation?
- Are my processes automated?
- If not, is process execution guided (workflow)?
- Are my processes scalable, e.g. can they cope with a potential increase in throughput caused by my strategy?
This should be a constant topic to work on, not only during strategy implementation.
Your team will use tools that you have to execute their processes. Other tools will help manage your strategy execution. To assess the major components of your tool landscape, ask yourself these questions:
- Do we have the right tech stack? Do all departments work with efficient software tools?
- Do all functions template and standardize recurring work to a meaningful degree?
- Do we have an effective meeting culture?
- How do we manage projects or track progress on strategic initiatives?
- Is there a KPI framework in place that allows us to quantify progress in strategic improvements?
If your processes are right and your team is skilled and motivated, and then you give them pen and paper to run a digitalization project, it’s not going to work.
Check if your tool set is set up for success.
With these three factors, we have Organizational Capability under control. Now let’s look into strategic clarity.
Strategic clarity describes how well you communicate your strategy to make it usable and executable for your organization. There are two goals: To set the “North Star”, so the team knows where they’re headed. And to break down what that means for them.
The first requirement for successful strategy execution is that people in your organization actually know what your strategy is.
Again, trivial but important.
When you have formulated your strategy, make a plan on how to communicate it. And not only once, but constantly.
Think of communicating your strategy as a change management process.
Executing your strategy will mean changing your organizations behavior.
There has to be training on the strategy, that can either be done centrally or department/team-specific.
And then, you’ll have to assign people that constantly repeat and reinforce your strategic goals. This could be the heads or team lead or any other person that’s influential in the company.
If the company is smaller, it can be yourself as the CEO.
The goal is to over-communicate your strategy. Only if you and your leadership team feel that you need to explode if you explain the strategy one more time, you’ll have a chance of people really understanding it.
And this is not because your team’s slow or not competent. But because the employees (usually) are detached from the process of strategy development and formulation.
Lastly, the part of the equation that most people consider strategy execution: The work breakdown.
The question you answer here is: if my strategic goal in X years is this, what does this mean for my marketing team next month.
There are multiple frameworks for strategy execution.
Objectives and Key Results
Objectives and key results are a very simple, qualitative strategy execution framework.
Your set quarterly objectives with your team. Maximum three. And then you come up with key results per objective that will tell you if you’re getting there. Maximum five per objective.
Integrate that across the company.
After the quarter, grade how well you were doing and set new objectives.
Don’t overengineer the process. It’s a tool for strategic alignment, not project controlling.
An oldie but Goldie among the strategy execution tools.
Break down the timeline until reaching you strategic objectives into phases with milestones at the end of the phase. Then, have a look at the phases (or at least the two upcoming phases) and break them down further.
Depending on the maturity of your team, the complexity and predictability, you can break down task to be objective based on a quarterly level. Or you really go down onto a weekly task level.
Readjust the roadmap as the strategy execution unfolds.
I hope that these steps help you implement your strategy and reach your goals. If you need help with any of the above, please reach out.