By Dan Parisi
“Corporate strategies are intellectually simple; their execution is not. The question is, can you execute? That’s what distinguishes one company from another.” - Larry Bossidy, Former CEO, Honeywell
Strategy Execution: A Competitive Differentiator
A well-formulated business strategy, powerful product or breakthrough innovation can put an organization on the competitive map, but only sustained strategy execution can assure long-term success.1
However, navigating from strategy development to execution is one of the biggest challenges for today’s CEOs, and few are successful. An Economist survey found that a discouraging 57 percent of firms failed to efficiently execute strategic initiatives over the past three years. The impact on competitive advantage and profitable growth is profound. Harvard Business Review reported that companies on average deliver only 63 percent of the financial performance their strategy promised.
Today’s leading organizations spend millions of dollars on formulating new strategies that are designed to propel the company past the competition. However, to execute the strategy, these same organizations invest significantly less, especially when it comes to the people side of the equation. This surprising reality is a missed opportunity. Organizations can achieve successful execution, converting strategic plans into results, by investing in a robust, multi-phase strategy execution process.
It’s Not an Event. It’s a Process
Strategy execution is not the result of a solitary employee decision or action, but the consequence of a series of coordinated, enterprise-wide decisions and actions occurring over time.2 It is comprehensive and must bring the people in the organization along for the ride.
Execution may start at the top of the organization, but must cascade down to be successful. Traditional approaches to execution typically involve one-way information flows from senior leaders to lower levels in the organization: town hall meetings, blogs, PowerPoint presentations, or off-site events. However, these events fail to drive the necessary organizational alignment, mindset and capabilities needed to achieve effective execution and business results. Not surprisingly, a five-year Harvard Business Review study, involving 125,000 executives representing more than 1,000 companies from 50 countries, found that employees at three out of every five companies considered their organization weak at execution.
Without significant organization involvement, a strategy that sounded good in principle begins to dissipate and move in 1,001 different directions. Even the most promising business strategies can be unsuccessful.
The Critical Components for Superior Strategy Execution
BTS does not focus on strategy formulation. Nor does BTS focus on organizational technology, systems or structure. BTS focuses on the people side of the execution equation, and after more than 25 years of working with top companies on execution, we have found three critical components of superior execution that need to be addressed at all levels of the organization:
- Strategic Alignment – Employees need to clearly understand their company’s strategic direction and priorities. This includes a deep understanding of what the strategy is, why it is important and how it will be implemented.
- Mindset – Successful execution requires collaboration and commitment. To accelerate execution, individuals need to be engaged and passionate about the strategy. Connecting the strategy to personal success is critical.
- Capability – Companies that excel in execution invest heavily in building the skills and capabilities necessary for execution. These include but are not limited to business acumen, leadership, sales and project management.
Mapping the Journey
BTS’ Strategy Execution Journey involves a multi-phase process leveraging a powerful execution diagnostic tool, intensely customized and best-in-class experiential learning methods, C-suite involvement as coaches and teachers, and a results assurance methodology.
The following is the BTS four-phase Strategy Execution Journey:
- Determine Execution Readiness: A diagnostic tool determines execution readiness at multiple levels of the organization and indicates gaps and opportunities.
- Create the Execution Acceleration Process: A robust BTS development process includes up to 20 interviews with senior executives and on-going collaboration with senior leaders. The result of this co-creation process is a customized, high-impact solution reflecting the client business and strategic priorities.
- Build Execution Readiness: A multi-phase solution leverages business simulations and experiential learning methods to accelerate execution and effectively engage employees in the process over time. Capability building is dynamic, practice-based and strategically aligned. Online tools and modules provide real-time feedback, and real-time support to build and sustain the experience. On-going leader and employee meetings define on-the-job action plans and drive accountability.
- Measurement and Feedback: Continuous learning and checkpoints maximize impact. Short, ‘bite-sized’ online modules sustain the learning and appeal to next-generation learners. A final success case analyzes business impact.
Maximize the Value of Any Business Strategy
It’s difficult to imagine a major athletic team facing serious competition without a comprehensive plan to create alignment, build capability through practice and pursue high performance. The same is true for corporations. The winners in business will be the organizations that move beyond traditional strategy communication to dynamically engage, align and build capability of leaders.
The BTS Strategy Execution Journey leverages more than 25 years of BTS expertise. It is simply the most effective way to accelerate execution through people.
About the Author: Dan Parisi is an Executive Vice President at BTS.
1Neilson, Gary L., Karla L. Martin and Elizabeth Powers, “The Secrets to Successful Strategy Execution”, Harvard Business Review, 2008.
2Hrebiniak, Lawrence G., “Business Strategy: Execution is the Key”, Financial Times, 2005.