To Implement Business Strategy, Create a Culture of ExecutionBy: Joel H. Head
In the United States, the average firm only achieves about 63% of its strategic plan. Based on studies conducted by McKinsey, the Harvard Business School and others, 90% of strategies that fail do so because of lack of execution. Without a clear implementation strategy, even excellent business plans hardly stand a chance.
Research in the last several years has pinpointed many reasons why business plans fail. Most of the reasons have to do with "operator error" and include poorly communicated plans, weak or non-existent implementation planning, inability to adapt to changing conditions, lack of a systematic approach, and poor employee engagement.
For effective implementation to happen, an "execution mentality" must be present in the working environment. In this environment, execution must represent a primary value; activities and effort are not enough. There must also be an emphasis on measurable results and a get-it-done attitude. People are expected to step up to challenges. Lackluster performance is not tolerated though the emphasis is on constructive improvement rather than punitive measures.
Establishing a culture of execution begins with a written business plan which clarifies mission and vision, enterprise goals, measures and targets, and illuminates company values for all employees. To begin building buy-in, the plan should be created with the help of the individuals who will be primarily accountable for its execution. This means that the head of each major business unit will have contributed to the research, visioning and formulation of the plan.
Similarly, as the plan is cascaded through the organization and enterprise goals are translated into departmental and individual objectives, the people who will be responsible for executing the plan should be involved in developing their part of it. At each step it is important to identify the critical variables and potential potholes that could derail the plan, and develop contingency actions so strategy implementation can remain on track.
It is critically important to monitor performance at regular intervals. We recommend quarterly intervals but some firms review progress monthly or even weekly to get real time feedback on how the plan is progressing. Set milestones or interim goals at various intervals as a further check of whether the plan is on track.
Another essential is solid communication at all levels of the organization, to further illuminate plan particulars, to report on progress, and to recognize achievement. Everyone needs to know what is expected of them and how their progress will be measured. Regularly inviting employees on the front line to comment on progress will go a long way to informing you about how the plan is working and what obstacles remain.
Often a large issue in building a culture of execution is the art of delegation. Many things can go wrong. First, when you delegate an assignment, employees have to be given full authority to complete the assignment. Micromanaging the process will set the employee up for failure.
Many times, accountability is confused with responsibility and the confusion works against execution. Responsibility is a commitment you make to yourself based on your own internal standards. Accountability is a commitment you make to another person based on mutual obligations each makes to the other (e.g. fair day's pay for a fair day's work). If the employee has no authority to complete an assignment, accountability and effective execution will not be possible. The employee will be left only with his or her responsibility mixed with lingering resentment that they cannot control the outcome.
In delegating, managers are responsible for explaining all of the dimensions of the employee's accountability. Accountabilities have many dimensions including tangible dimensions like results expected, an execution timeframe, "stretch goals", and boundaries such as rules and limits. There are also intangible dimensions with accountability like teamwork or stewardship, that is, the accountability to effectively care for and manage all resources.
The barriers to effective execution can be overcome by educating managers about the importance of effective communication in delegating and driving performance. Managers should be well schooled in the skills of goal setting, measurement, coaching and providing feedback.
The Role of the Leader
Execution will not happen if the senior leadership is not out in front of the process. It is essential that leaders be hands-on rather than hands-off, meaning that even if you have delegated full accountability for an assignment, it is important to monitor progress and follow up with people at regular intervals. Being available as a resource, role model and as a coach can go a long way in making sure that plans stay on track and progress is being made. The opposite is also true - if the leadership is not involved, people will believe that what has been planned is really not a priority.
To this list we would add one additional behavior -- build trusting relationships. Without trust between managers and employees - a necessary ingredient in developing an engaged and accountable work force - people will not risk "going the extra mile" to get the job done.
© Copyright 2009, Joel H. Head
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