“90% of organizations fail to execute their strategies successfully.” Kaplan & Norton
What an abysmal statistic!
Yet we have been trained that without a strategic plan a company is almost doomed for failure.
“Strategic planning at a point in time doubles the likelihood of survival as a corporate entity.” Noel Capon, James M. Hurlburt, Columbia University
If companies can get strategy implementation right then the failure rate will go down and the survival rates will go up.
You have heard of Murphy’s Law, Moore’s law and other similar axioms which are based on relationships as translated into ratios. Well, there is an axiom that I came up with that can be used in judging the effectiveness of strategy implementation within a company.
Here’s a formula:
An organization’s success at strategy implementation =
(The mobilization of the organization’s resources) divided by (The resistance in achieving buy-in, accountability and focus)
This means that the implementation of your organization’s business strategy (direction) is equal to your ability to mobilize the people, processes, systems and technology in your organization (power source), divided by the organization’s inability to get buy-in, discipline and focus on the implementation of the strategic plan (resistance).
What does this mean? Let’s look at this in the context of numeric values to see what an organization’s success ratio would be with regard to strategy execution under very basic conditions.
If an organization has the ability to actively mobilize all of its resources at 100 units and yet is held back by resistance to implementation by a factor of 10 units the resulting quotient or outcome is 10. In this case, the organization is relegated to the lowest common denominator of strategy execution of 10 units. In other words, if the level of resistance goes up the ability of the organization to implement strategy goes down. The opposite also holds true if the level of resistance goes down then the effectiveness of strategy execution goes up.
The take away is this – if an organization can reduce the level of resistance in the way it implements strategy the greater will be its productivity in making strategy executable.
Now the big question, how can an organization reduce resistance with regard to its strategy implementation?
According to a study conducted by Canadian Society of Association Executives (CSAE), it determined there are clear patterns that emerge in successful strategic goals implementation efforts. Successful strategy-implementation efforts have to meet three common-sense tests:
- They were managed to results milestones;
- They explicitly addressed the people issues within the organization relative to strategy execution; and,
- They were resourced properly, not just with money.
The CSAE also found that even the soundest strategies failed to achieve their performance objectives because one of these tests was flunked. So getting all three tests right is important.
And getting them all right is a tall order if an organization relies on 20th century tools. How can an organization expect to win at strategy execution using memos, presentations, occasional plenary workshops and performance compensation plans? These are tools that can be a good start, but we are now in the 21st Century and powerful, integrative tools are at our disposal to help define outcomes, measure and then track strategy as it is implemented.
Implementation with technology software to support an organization’s strategy execution is not just a one dimensional perspective, but as an integrative effort with the means to instantly get at the underbelly of strategy execution both vertically and across an organization’s structure and then to penetrate the very DNA of its culture.
I encountered a company called Envisio and I was most impressed that they have spent time to answer the 21st century call for the use of technology as a powerful tool for strategy execution and scorecard reporting. It can support an organization in reducing factors that are creating resistance and holding it back from successfully implementing strategy, in short it gets at the very problems with strategy execution and revitalizes strategic planning.
Here are the key points in reducing resistance in strategy execution that makes Envisio so unique:
Envisio provides a structured approach in creating and translating strategic plans into individual and team activities and measures. This way the organization can pinpoint resistance point and shore them up to improve implementation outcomes.
Everyone within the organization is assigned a role and responsibilities for bringing the strategic plan to life. It means that everyone becomes strategic thinkers making their contributions meaningful and accountable toward a common purpose. There is no room for ambiguity.
Dashboards provide a view of individual activities and measurement that connect them to the plan. This allows for strategic alignment where the people in the organization can visualize how they fit into the strategic plan and see where they’re contributing.
Plan updates are automatically recorded and an audit trial allows team members to collaborate on deliverables. Strategy execution means all hands on deck working together in making things happen.
Intuitive reporting revolutionizes management’s ability to track progress against the strategic plan and make adjustments when circumstances dictate. Remember there is no such thing as a perfect strategy so managing strategy under fire ensures management has its finger on the pulse.