Crafting and Executing an Organizational Strategy
When it comes time to implementing any kind of strategy, many organizations find themselves readily able to put together a broad plan but quickly get stuck in trying to execute it. In other words, having identified the opportunities, they can often watch in increasing alarm as results fall short of aspirations and the chances of success slip away.
There are many reasons why organizational strategy goes wrong or does not get implemented as planned. These include:
- Poor appreciation of customer or market needs (and what they may be willing to wait or pay for, for example)
- Lack of understanding of organization, team and individual capabilities
- Insufficient assets and resources to execute on the strategy
- Poor financing decisions (under-budgeting or no appreciation of cash-flow needs)
- Insufficient project planning and control, of new strategic initiatives in particular
- Inadequate time allocation to tasks (especially in balancing old strategic goals and new ones)
The “secret” to success therefore is to think about strategy in three parts – crafting it, executing it and then continually assessing progress. Let’s look at each of these steps in a little more detail.
Crafting a Strategy
The basic question that any organizational leader or senior team should ask when looking to craft any new strategy is “How are we as a firm going to utilize our assets and resources (both human and physical) to achieve future success?” This means initially choosing what to continue doing (that has been the result of past strategy) and what new projects or initiatives should be undertaken (making sure that the resources between prevailing activities and new ones are well thought-through and balanced. As one of the major writers on Strategy, Michael Porter from Harvard University says “The essence of strategy is choosing what not to do” and this is most likely to be because it cannot be resourced properly and therefore has too much risk to consider. Good strategy is consequently all about selecting carefully and intelligently from a range of alternative actions.
Beyond selecting wisely from a range of possible future activities, the other major focus in crafting a strategy is thinking about balanced participation, in both inputting to strategy-setting and in how it is best-executed. This is best achieved by involving people from all parts of the organization to participate in idea generation, evaluation and execution thinking. This ensures that the experience of people is “baked hard and fast” into the crafting process and they can then both consider new activities but also, and more importantly, evaluate how smooth implementation is likely to be. This is simply because people in different teams and lower down the organization better appreciate the resources and assets available and how much they can be leveraged to meet newly imposed needs.
Executing the Strategy
Even though an action plan to execute on a given strategy will involve many discrete projects and tasks for a range of teams and individuals, execution must be a fully coordinated activity at the most senior level. In other words, senior leaders need to establish a widespread mind-set that the strategy is not just a theoretical plan to be achieved by many individual teams in relative isolation, but is a route map for the whole organization to pay attention to and execute upon in a joined-up and collaborative way. This typically means selecting the right people to lead the right strategic efforts at the outset, choosing which individuals are best-served to occupy any new roles (especially when there are new projects and activities to be implemented) and allocating resources according to needs (but building in flexibility to change things when necessary or things change). Collaboration is then critical to execution. Teams simply cannot be left to implement tasks on their own at the expense of other teams who need to succeed as well in order to achieve the overall organization targets.
Once a strategic path forward has been set and widely communicated, its execution will depend on two key factors. These are excellent and ongoing communication about whether or not projects and activities are on track and effort to re-allocate people and resources as needed. Put another way, good strategic execution involves the continual assessment of progress and the “agile” switching of resources quickly when the need arises. And in this performance assessment process, leaders should always recognize that even well-crafted strategy has to evolve or be renewed, sometimes several times, according to both internal changes and external ones such as competitive actions/reactions, technology changes, changes in market or customer expectations and changes in wider economic conditions in particular.
Senior leaders in every organization, no matter what its size or type, should aim to describe strategies that people at all levels will easily understand (and will have had some input in shaping). Once set, the focus should then be mainly on execution, not only by allocating people and other resources well at the outset but by remaining agile. Leaders and teams at all levels should therefore remain fully flexible to adjust goals as much as necessary, according to small and large changes encountered along the way.