You’ve just completed your annual planning exercise… Now what?
Congrats CEO and senior team – you’ve done your strategic planning by the book:
- Ran a retreat with the team
- Sounded out the staff
- Refreshed your strategy
- Set goals and initiative list
- Thrashed out the budget
- Presented to the board… APPROVED!
Your plan’s ticked off and good to go. And now the real work begins – deliver your strategic plan.
‘However beautiful the strategy, you should occasionally look at the results’.Winston Churchill
So how do you go about executing your plan?
The bad news is that it’s work – real work. But there is a simple trick to getting it done: fit it into the natural rhythm and flow of your business. As long as strategy gets sporadic focus, it will get sporadic attention and thus will likely languish.
Let’s dive into five key steps to get strategy into the rhythm and flow of daily business.
1. Set up a Two-way Communication Cycle
Strategy is guided from the top, delivered in the middle and kept alive at the edge.
What I mean is this:
- Senior management formulate the strategy by: assessing the market, weighing up strengths and weaknesses, and setting the course
- Middle management get the program of work done
- Line staff either keep the new things alive with their enthusiasm or kill them with indifference
The first essential step is to set up an ongoing communication loop between those who formulate, execute and maintain. The key is to make it an ongoing loop.
2. Empower Action-taking
Strategy is useless unless it can be converted into action and outcomes on the coalface. One of the biggest traps senior executives fall into is not fully empowering their teams to take immediate actions that give life to strategy.Here’s a story that illustrate how to do it:
British Airways was turned around in the 1980s when it was losing $140 million per year. A key factor in the transformation was a focus on one KPI: timely arrival and departure of aeroplanes.
Front line terminal staff were empowered to take action and commit expenditure whenever the KPI was in danger. i.e. extra cleaning crews and overtime for maintenance crew.Flight arrival and departure times had the single biggest impact on profitability and these simple actions authorised by terminal staff helped turn BA into one of the world’s most profitable airlines in the world.
For more on this read David Parmenter’s Finance & Management article.
3. Reward co-operation
Do you think your team works together well? Take care that your carefully crafted performance management culture isn’t producing counter-productive results. What do I mean? Does your culture promote and reward individualistic performance at the cost of team performance?
Here’s how you can test this. Look at the performance pay objectives of the senior management team. Is there any bonus allocated to overall team and cross department support?
A March 2015 Harvard Business Review article reveals that a lack of inter-departmental co-operation is one of the biggest impediments to executing strategy.
When managers are not able to rely on colleagues in other functions and units, they tend to compensate with a host of dysfunctional behaviours that undermine execution, including duplicate effort and letting promises slip.
4. Establish work flow for executing strategy
Managing execution of strategy belongs to the CEO and senior team. The key to successful execution is to insert it into management routine and to develop a healthy ongoing tension between operational demands and strategic imperatives. Meetings and reporting are the tools of trade for ensuring the right things get done.
This is what we live for here at Leaderkit. We call it Executive Workflow.
5. Set up course correction
Your board reporting and meeting cycle can be used as a strategic course correction system.
Here’s how you can do it:
- Present your strategic and annual plans to the board in a simple format, using a framework like the One Page Plan. Keep the plan tight – 40-50 words in the strategic foundation, with 10-12 scorecard goals and 10-20 key initiatives. Agree it with the board as the approved plan for the year.
- Categorise your strategic initiatives in two buckets – those that will predominantly contribute to current year’s operational results and those that will drive longer term results and report monthly on the progress of both.
- Identify problems and blockages early and pro actively report them to board using the SIR format: Situation – Implications – proposed Resolution.
- Set up a quarterly deep dive on broader strategic topics. I.e. Competitor Analysis, Product Roadmap. Whilst the topic might be broad, the context should be precise. Spend time formulating the 2-3 key questions you’re putting to the board to ask and answer.
This sort of deliberate review cycle has multiple benefits:
- It gets you thinking ahead and pro actively resolving problems
- Creates a natural rhythm for considering and correcting your course
- Draws the board into strategic conversations
- Minimises surprises – the number 1 killer of confidence in the CEO
Establishing these new ways of working may be painful at first but the benefits will far outweigh the cost. As they become part of the routine and “that’s how we do things here” you will lift the game for the whole organisation.
Thanks for reading. Let us know if you have any specific questions or feedback that you’d like us to address.