Ten Questions To Guide Strategy Implementation
Business strategies fail for a variety of reasons, but often the
soundness of the strategy is not at fault. A strategy audit that assesses
ten issues can pinpoint the reasons why your strategy is not achieving the
desired results.
1. Is senior leadership committed to the same strategy? The single
most important influence on successful strategy implementation is a shared
understanding and commitment by the senior team. Commitment, not agreement.
However, even senior teams who think they agree on the strategy often have
different interpretations of that strategy. If asked to define key terms in
the strategy, they provide slightly different interpretations. Ask your
executive management to provide one quantitative measure of success for each
element in your strategy. If they can’t agree on the measures it’s a
reflection that they don’t really agree on the strategy.
2. Does the strategy identify a unique selling proposition? Many
strategies fail to clearly identify the way in which their offering will be
differentiated from the competition. One retailer outlined a three part
strategy: “We will offer the best assortment, delivered with excellent
service, and priced to provide superior value.” This is a not so unusual
all-things-to-all-people statement that fails to identify a key
differentiator. Federal Express has one clearly stated key selling
proposition: when it absolutely, positively has to get there on time. Every
Federal Express employee knows this. Every employee in your organization
should know the single most important aspect of your offering.
3. Have you selected a target market? Some organizations fail to
identify their target market(s) because they associate targeting with
writing-off some parts of the market. Selecting a target market doesn’t mean
that you turn your back on other customers, it simply means that you focus
decisions regarding your offering on the needs of the target market. Without
the focus provided by a target market and key selling proposition, it’s
virtually impossible for organizations to consistently create highly
satisfied customers.
4. Is your strategy consistent with customer and employee attitudes
about your strengths and weaknesses? Few organizations complete a full
SWOT analysis on a regular basis, but most organizations do receive regular
survey feedback from customers and employees. Use this feedback from key
stakeholders to confirm the basic assumptions of your strategy. If
“technology” is your unique selling proposition, then your customer survey
results should confirm your competitive advantage in this area, and the
analysis should confirm the importance of technology to your target market.
5. Does your strategy help you understand what you will not do?
Without a strategy, any idea is a good idea. A sound strategy helps an
organization sort through the hundreds of opportunities in the market place,
and to quickly seize those that are consistent with its strategy as well as
to rule out those that they will not pursue. It’s often said that
companies have a more difficult time deciding what they will not do than in
deciding what they will do. In their brief book Top Management Strategy,
Tregoe and Zimmerman propose the concept of “driving forces” to help
organizations set the parameters of their strategy. If your management team
struggles with disparate strategy alternatives (should we focus on new
products or new markets?) then you may need to go back and determine the
driving force of your strategy.
6. Have you determined the key success factors of the strategy?
Effective organizations do most things well – operations, human resources,
financial controls, etc. But the most successful organizations identify
those areas at which they must excel for their strategy to
succeed, and then align the entire organization around those issues.
Southwest Air determined that baggage handling was a key success factor of
their ability to turn aircraft around quickly, which in turn is a key
success factor for keeping costs down. Purchasing is a key success factor of
many mass retailers. Hiring is a key success factor for many consulting
firms. Strategy and industry determine the areas at which an organization
must excel. A strategy map is a powerful tool to guide organizations in
operationalizing the key success factors of their strategy. (A strategy map
is a pictorial representation of the hypothesized cause-and-effect
relationships in your strategy. If we do this, then we should get that, and
if we get that, it should lead us there.)
7. Do you have an approach that links resource allocation to key
success factors? Most organizations have a complex budgeting process,
but surprisingly few of these are linked directly to strategy and key
success factors. Rather, the squeaky wheel syndrome tends to rule; the
biggest problems get the most resources. Often priorities should be given to
key success areas where performance is good in order to make it excellent
rather than devoting those resources to improving problem areas. This may be
the only way to create delighted customers. Review your budgeting process,
and look for the linkage with strategy.
8. Do employees understand your strategy and the assumptions on which
it is based? Frontline employees daily make customer related decision;
departments set goals for their staff and reallocate resources on a regular
basis. Organizations have very limited resources; all these decisions and
actions must contribute to the strategy. This can only be accomplished if
the entire organization understands that strategy. If you’ve developed a
strategy map to identify your key success factors, the output from that
exercise can serve as a powerful strategy communication tool to employees as
well. If you administer a regular employee survey, make certain to include
questions about their understanding of your business strategy.
9. Do your recognition and reward systems reinforce your strategy?
Ask your employees informally what really gets rewarded in the organization
and in their department, what’s really important to senior management and to
their manager. This includes everything from formal monetary incentives, to
who gets ahead, to the informal ‘ata-boys. Typical answers are often staying
within budget, not rocking the boat, meeting sales targets or even making
the boss look good. Then look at the performance goals you’ve set for your
department. How do these answers compare with your organization’s strategy
and key success factors? To see how you’re doing, create two columns on a
sheet of paper. In the first column, list the subset of organizational key
success factors on which your department should be able to have an impact.
In the second column list performance goals for your department and
employees. Now look for a relationship between the two columns. If it
doesn’t exist, your department is not pulling its full load in contributing
to the strategy.
10. Does your organization have a way to quickly determine whether
failure to achieve goals is due to a poor strategy or just a poor strategy
implementation? The only way to quickly identify the causes of failed
strategy is to frequently collect data on each of the strategy’s key success
factors. Then, if your strategy is not meeting your goals, you have data to
tell you whether it’s because you failed to implement the key success
factors (probably good strategy, just poorly implemented), or whether you
failed despite successful implementation of key success factors (probably
bad strategy.) The Balanced Scorecard provides an excellent guide and
framework for developing a set of 15-20 measures that can be used to guide
and test the strategy and its underlying assumptions on a regular basis.
(See Bullseye by Schiemann and Lingle and The Strategy Focused
Organization by Kaplan and Norton.)
Strategy implementation is the most challenging and important task of a
senior leadership team. Gone are the days of five-year plans, replaced by
shorter term plans that emphasize speed, responsiveness and successive
strategic approximations. There are a number of tools available to address
any of the short-comings uncovered by a strategy audit that help an
organization remain both flexible and focused on achieving their strategic
goals.
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