Every time we come across a successful brand, company or a product and try to understand the reasons for their success it always boils down to an innovative strategy that was executed effectively to get the desired results.
While this seems so easy on paper studies have shown that at least 50% of employees feel that their company is weak in execution of the defined strategies. It is also estimated that only 63% of planned strategies deliver the promised financial numbers.
So, what would be a best example of a good strategy?
The best example that comes to mind is that of Admiral Lord Nelson and his English Navy whose only strategy was “Whatever you do get alongside the enemy ship”…
So instead of using today’s common practices of controlling the entire fleet through various communication methods they identified that the British navy’s training and experience gave it an advantage when it engaged one on one with the enemy vessel. So, while only the broad strategy of getting along side the enemy ship was identified how and where to engage was left entirely to the different captains in each of the ships which led them to become almost unbeatable on the high seas.
Let’s understand what the key things or traits that usually prevent effective implementation of strategy are:
1. Every employee has an idea of the actions of the strategy for which he or she is responsible from an overall company strategic perspective
Am sure you have come across several situations in your day to day functions where people take their key daily decisions just based on their KRA or targets etc whether it is a sales person closing a prospective sale so that his month targets are achieved though the said sale is detrimental to the overall interests of the company or of a finance or operations personal who refuses to look at a new market situation just because it is not there in the operations manual and hence he would be pulled up in audit. Am sure you have also come across customer service representatives who tell you that they cannot do this or that as per the company policy.
2. Information flow to Head Office on the competitive market situations
This is perhaps the biggest bottleneck in the effective execution…Strategy mostly is made at the Head Office and then percolated down to across the various branches that implement the same. Some of the key issues which usually come up are very often is that competitor feedback that comes from the market is very different from what was anticipated while developing the strategy.
So the Head office very often tries to get into audit mode with the result the corresponding field managers need to spend at times 40% of their time justifying the data that they have send to them. This also leads to field managers avoiding giving feedback or trying to play safe and giving politically correct feedback which will not lead to re-calibration of the strategy to make it more effective in the competitive market.
3. Each and every decision is reviewed across levels without any value addition
Am sure we are all familiar in this situation in our organisations where each and every decision is reviewed by each level of management without really adding any value to it. Due to organisation structures several decisions need to be signed off by multiple layers of the hierarchy ..While this is essential to a certain extent the system goes for a toss when there is no value added in the review process. This not only slows down the decision process but also ensures that no one is really accountable for the decision that is being taken.
4. Information with Field and Line employees to understand the impact of their day to day decisions on the company strategy and on the company bottom-line
This should be actually read with point 3…Very often in organisations the KRAs don’t change at all across levels resulting in the major KRAs being just the same across several levels.While this is technically correct the focus areas in the KRA should vary level to level focusing on the areas where each level can contribute to improve the execution level within the organisation.
5. Information flows freely and completely across the organisation
Am reminded of two scenarios for the above case…the first about the top management making a new strategy and with all good intentions of communicating the strategy make a detailed presentation of the same and send it to the branches with an instruction to call everyone and run everyone through the presentation. The branch manager calls everyone to the office and plays the presentation completely ..Am sure this sounds familiar…While this was done with the best of intentions neither will the branch manager know the complete background to explain things in detail nor will he take ownership of the same.
The second scenario that is coming to mind is a small episode where I heard former Tata Sons Director Mr Gopalakrishnan talk about giving the bigger picture to all employees and how the same works and about an example of a mill in UP which employed close to 1700 people and just wouldn’t turn around despite best efforts of all management…and how their conversation with the sale team of how each additional sale would help save lives of 1700 families helped turn around the mill.
To sum up the key drivers to enable effective execution of strategy are as follows
1. Proper and clear understanding of decision rights at all levels
This is to ensure that everyone in the organization knows and is accountable for each of the decisions that they take on a daily basis. This is also to ensure that different levels do not waste time taking decisions on the same matter.
2. Encourage higher level managers to delegate operational decisions.
3. Make sure information flow of market situations flows seamlessly from the market to HO to ensure smoother implementation, take necessary corrective measures and ensure smoother roll-out to all parts of the company.
4. Head Office team should always play a facilitating role and encourage flow of correct information on market situations to Head office.
5. Provide the bigger picture to field and line employees so that they understand how their day to day decisions effect the planned strategy of the company.
6. While preparing the strategy define only 3 to 4 keys goals which are to be executed. Keep them simple so that they are understood across the organization.
7. Ensure that the assumptions made while preparing the strategy are as close as possible to the real market situations and the performance of the company’s products in the market and against competitors
8. All departments within the organization to have a common framework to assess success of strategy
9. Identify priorities and push resource allocations to help speedy implementation with continuous monitoring and course correction to ensure effective implementation.
10. Have the right people and promote and take care of people who have capability to execute effectively.
Great performance requires great strategy and great execution, but poor execution is often used as an excuse for flawed strategy. Today’s leaders need a new approach to strategy development. They can no longer define a plan over many years and then just do. Success requires identifying the next few steps along a broadly defined strategic path and then learning and refining as you go. This approach makes execution easier and increases the odds of delivering great results.
Further you cannot change attitudes and mindsets by changing structures, governance, and process; you change attitudes and mindsets through genuine engagement and two-way interaction.
– When we inform people by clearly communicating the company’s destination, they develop a sense of direction and focus.
– When we inspire people by explaining why the destination is important, they develop the motivation and determination to see the race through.
– When we engage them in reaching that destination, they become more willing to make decisions, take appropriate risks and act in the best interests of the organization.
This is when Strategy gets executed effectively and delivers outstanding results for the organization.
