By Michael Dattilio
Organizations spend quite a few man-hours every year on strategic planning and implementation. Then, halfway through the year, some key metrics and targets get knocked off track. Panic ensues and there is a big push to spend more time on the “strategic” issues, which are in fact by now much more tactical than strategic.
Why do corporate strategies so often devolve to tactical fire fighting? How can organizations keep inevitable short-term upsets from derailing the successful implementation of enterprise strategies? To answer these questions let's first look at how most organizations “do” strategy.
Strategy as We Know It
In most organizations, the strategic planning process is quite linear.
You gather in a remote holiday paradise (or, more likely, the local Dew Drop Inn conference room) to brainstorm and plan around things like “Strengths – Weaknesses – Opportunities – Threats” or some variation of such exercises plastered on two-by-two grids.
You look at markets, customers, partners and competition. Sometimes companies redefine who they are or who they want to be to their customers. Raise your hand if you have been a part of such an exercise. Good.
Next, or as an alternate beginning, you set goals for the year based on the new direction – vision – strategy - market. Each department usually has its own goals that generate the top level outcomes everyone has planned for. Again, a show of hands for those who have created such goals or been asked to create goals to link to such goals. Perfect.
Now, we sit back and connect the goals and watch this whole strategy thing kick butt. Still waiting?
Why Strategy Implementation Tanks
While the traditional, linear strategic planning approach described above is a comfort to our monolithic brains, it completely ignores the systemic interactions and inter-dependencies needed to accomplish top-level goals.
Most strategic results are touched by multiple functions, with one function (or sometimes no one) held accountable for the outcome. When mid-year metrics are below expectations, those accountable are called on the carpet for their performance.
Quite often, issues along the cross-functional path have contributed to the poor performance. This is when the blame game begins and more energy is spent covering and defending than making progress toward anything other than CYA. Goal? What goal? But take heart, there is a better way.
6 Ways to Optimize Strategy Implementation
We have found that 6 key areas are often overlooked when organizations are creating and implementing enterprise-wide strategies. If you start paying attention to even half of them you will likely see a significant improvement in your ability to successfully deliver on strategic goals and objectives.
- Document the Cross-Functional Path of Enterprise Goals
- Close the Leadership Skills Gap
- Limit Assumptions – Be Explicit
- Promote Effective Information Sharing
- Create Meaningful --Not Multiple -- Metrics
- Understand the Relationship between Process and Function
1. Document the Cross-Functional Path of Enterprise Goals
One of the most common reasons strategy implementation gets derailed is the failure to recognize the cross-functional nature of most strategic goals. If sales puts together a plan to sell 1000 widgets but manufacturing can only produce 500, clearly the sales goal will be stymied no matter how brilliant their implementation plan is.
Looking at outcomes and goals in the context of the functions that contribute to them can identify and eliminate misalignments, misunderstandings, and performance issues facing the strategy implementation.
2. Close the Leadership Skills Gap
Leaders of functional areas usually earn those positions because:
- They have been an individual star in the department, or
- They have delivered results through successful projects and initiatives.
In either case they may lack two skills that are critical in accomplishing most strategic goals:
- Leading Without Authority – Department heads may not have the knowledge or experience of leading individuals that do not directly or indirectly report to them. Some may not even recognize that the network of individuals that are contributing to a group's success (or demise) extends beyond their functional area. Until leaders become skilled at recognizing the broader scope of contributors and how to lead those individuals through influence rather than direct authority they will have difficulty accomplishing top level goals.
- Taking a Systemic View of the Enterprise - The ability to see the interconnectedness and interdependencies of enterprise goals and objectives is another key skill in effectively achieving enterprise-wide goals. Applying linear solutions to systemic issues just doesn't work. And many leaders lack the skill to understand, model and address complex, systemic challenges.
3. Limit Assumptions – Be Explicit
Staff are often unclear or unsure how they are expected to contribute to organizational success. Given no information, they make assumptions about what needs to be done and who is supposed to do it, usually focused on optimizing their department's overall performance rather than enterprise goals. It's the “it's not my job” syndrome run amok.
Combine that with the assumptions department leaders make about what they can count on from other parts of the organization and you are on track for a mid-year crisis.
4. Promote Effective Information Sharing
Information technology was designed to help promote sharing data effectively. But it's often implemented to make data so secure and protected that progress within the company can slow dramatically due to lack of sharing across functions.
Without key pieces of information, departments can't take timely action which often jeopardizes strategic initiatives. Additionally, having good information shared across functions helps devise a better implementation plan to start with, thereby eliminating potential obstacles before they occur.
5. Meaningful, Not Multiple, Metrics
You can't manage what you can't measure. True, but manage at the key points and levels within the value chain. Some companies have metrics at every conceivable level. And they try to pay equal attention to each one.
Having multiple metrics in place isn't necessarily a problem, as they can be helpful in quick diagnosis of larger issues. On the other hand, focusing and reacting to each of them drives behavior counter to the larger system of the business.
Another common problem is companies collect piles of data and then don't do anything with it. In this case, metrics are seen as a waste of time and effort, and thus are ignored.
The key is to create clear metrics –the right metrics -- that drive company performance toward its goals. They must be at levels high enough to drive cross-functional optimization but low enough to be actionable quickly.
6. Understand the Relationship Between Process and Function
Functional leaders often see themselves as leaders of a group of people who have a focused expertise (e.g. marketing, sales, accounting) within the company. In reality, they are leading processes, many of which cut across multiple departments within the enterprise.
When a department head fails to recognize this they often focus on optimizing the functional skills of their department rather than on optimizing skills that would benefit the larger process.
Sometimes, these skills are one in the same and there is no downside. Other times this diving into the weeds of the functional domain creates significant obstacles to successful strategy implementation. Departments get dug in about “the way we do things” and are unwilling to change, even if would increase the chance of meeting enterprise goals.
Conclusion
Strategy has the best chance of succeeding when the organization is aligned with it. These 6 keys will improve that alignment by identifying and quantifying critical organizational issues before they negatively impact enterprise goals and targets. Choose one to begin with and watch how things begin to improve.
If you would like to discuss how to apply these keys in your organization or have any other questions regarding strategic planning and implementation please contact Beth Chartier at 781-343-4008 or bchartier@wsa-intl.com to set up a time to chat.
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