How can you successfully implement a strategy?
Companies realize a mere 40 to 60 percent of the potential of their strategy. The figures are not promising – and more and more companies have come to realize in the past decade that much more is needed besides a fantastic strategy alone in order to become number one in their sector. You must also be able to convert that fantastic strategy into a fantastic performance. That is where strategy implementation comes into play. It is the bridge between brilliant strategies and superior performance.
Partly due to disappointing statistics, strategy implementation is occupying an increasingly higher position on the agenda of top managers. More attention is being paid to the necessary implementation skills that are required in order to successfully put a strategy into actual practice. Simply paying attention will not suffice however; it is essential that one disposes of the appropriate skills with which to convert the strategy into daily practice.
Building blocks of strategy-implementation
The successful implementation of a strategy requires a mix of various activities. The precise composition of this mix differs from one organization to another. There are, however, a number of building blocks that make up the foundation of virtually every combination:
- Techniques with which to evaluate strategic options, such as scenario planning
- Instruments with which to cascade strategy, such as the ‘balanced scorecard
- Communication channels
- Techniques with which to structure, execute and follow up on strategic projects
- An approach with which to establish, follow up on and evaluate individual goals.
There are many models available for the purpose of planning and implementing strategies. But what is often lacking, is a simple framework with which to integrate these various building blocks and bring them into line with one another. That is where ‘the 8’ come into play. This model combines the most significant building blocks into a whole. ‘The 8’ does not cover all of the aspects of the implementation process, to be sure, and it is also not a step-by-step plan, but it is a simple model for strategy implementation. More than anything else, a model should be easy, immediately recognizable and appealing to everyone - managers and employees. In which regard I do wish to emphasize that the process should not be over-simplified, but that the model serves as a convenient basis for elaboration.
The 8 building blocks
A description of the 8 building blocks is given below.
1. Adjust your strategy
Your strategy is your long-term plan of action for realizing your vision. The strategy-update is a standard component of the strategy implementation model, as adjustments occur on a regular basis, often yearly. These adjustments take place on all company levels and on the basis of changes in the competitive climate and on feedback regarding the success of the previous strategy implementation cycle.
Transparent and comprehensible communication creates the necessary clarity and involvement in the new (or adjusted) strategy. Use all of the available communication platforms. This is essential. One major annual strategy event and a single mail from the boss will notsuffice. You should also use meetings, discussion groups, informal and formal get-togethers,the Intranet, notification boards, corporate theater, screen savers, posters and other creative ideas to communicate your strategy. You cannot over-communicate your strategy and vision!
Cascading, or in other words rolling out a strategy, is nothing more than cutting your company goals into smaller pieces for the next, hierarchically lower level in your organization. The process stops at the level of the smallest organizational unit. These are usually the teams. In order to follow up on goals, it is important o choose the right performance-indicators (KPIs).
4. Compare and learn
Your strategy is a hypothesis. It is the best estimate of the path that in your opinion will most likely enable you to successfully realize your vision. Which is why it is wise to stop and verify your hypothesis at the end of each implementation cycle. Companies change their strategies far too often because they fail to realize their intended results. However, on closer examination, it is found that nothing is wrong with their strategy. The problem concerned the implementation of the strategy. So do not forget to also take a good look at your implementation process.
5. Managing initiatives
‘Initiative management’ comprises selecting, prioritizing and following up on the correctstrategic projects. It is the step during which your dreams have to face up to reality, where people and means are added to your strategy recipe. Not surprisingly, this is more or less the most difficult step in the implementation process of a strategy – and therefore the step during which things often go wrong.
6. Establish individual goals
Establishing individual performance goals is one of the best things that you can do in order to improve performance – whether this concerns your own performance, that of your team or even that of the entire organization. Link all of the individual performance goals to the global strategy. If you don't, then you will end up with fantastic personal goals that are not useful tothe organization. It is the quality of these goals andthe acceptance of thesegoals that ensure success.
7. Follow up on and coach
Regular coaching motivates people and hugely increase their chance of success. It also makes it easier to come to an ultimate assessment of the performance.
8. Assess performance
Most organizations conduct a formal evaluation of the performance of employees at the end ofthe year. Ideally, the evaluation will provide an answer to the question: “Have the individual performance goals been reached?”. Make sure that you can provide a fair assessment.
Jeroen de Flander is senior lecturer of the Master class Strategy-implementation at TiasNimbas Business School, and co-founder of the performance factory. He writes on this and related subjects on a regular basis in his blog www.jeroen-de-flander.com.