Dr Yahya Shakweh
A recent Harvard survey, of nearly 700 executives across a variety of industries concluded that very few top companies, less than 18%, can be rated very effective at either strategy or execution. Only 8% are very effective at both, while 63% were rated neutral or worse on at least one aspect. According to this survey, very few companies have mastered the process of articulating and executing strategy; more than half of the companies who are effective in either strategy or execution are skilled in both strategy and execution. This suggests that strategist leaders who can develop compelling answers to fundamental strategic questions will probably gain skill at execution. Likewise, leaders who can excel at implementing strategies will probably gain skill at strategy development.
Generally, what differentiated the few successful companies and their effective leaders, who excel at both strategy and execution, from their counterparts is that they integrate strategy and execution very closely in every decision they make. They address fundamental strategic questions such as what sort of organization they want to be, what unique value proposition they offer, whilst simultaneously addressing fundamental execution-related questions such as what they can excel at and what additional distinct capabilities they need to develop, and how they build and scale such capabilities, and put them to good use.
There is no doubt that the quality and caliber of top leadership of such successful companies is so important that they avoid conventional wisdom of conformance to industry best practices or change for the sake of non-conformity. They are persistently focused on the fundamental questions about their company’s strategy and execution, which are considered simultaneously in the same conversations with the same teams, so that strategy and execution are closely integrated in every decision. They are operating their companies with full confidence, with business acumen that comes from having earned the right to win, the ability to engage in a chosen market with building or acquiring distinct capabilities that consistently outmatch and outperform their competitors.
Successful companies and effective leaders in strategy development and execution share a number of attributes that differentiate them from the rest in a number of distinct leadership acts.
1. Devise an integrated closed loop strategy framework: Instead of developing strategy as a standalone process and then start execution, successful companies develop a mature fully integrated strategy framework; covering strategy development; translate strategy to theme measures and targets, and initiatives; strategy alignment; operational planning; execution; monitoring and learning as well as adaptability. Effective leaders ensure that a viable, effective closed loop strategy framework is in place.
Thus, an effective strategy framework translates the strategy into operational terms to describe and communicate strategy in consistent, insightful, operational terms. It also enables alignment of the organization to the strategy. It is worth pointing out that in order for organizational strategies to work, they must be linked and integrated across many functions; including finance, manufacturing, sales, marketing, etc.
2. Articulate and commit to a clear identity. Instead of pursuing growth opportunities in non-core markets, successful companies focus on growth opportunities that leverage company’s strategic capabilities, with a clear value proposition and distinct capabilities. Effective leaders are a role model of commitment to their company’s unique identity. They have something powerful to promote, possibly a well-articulated purpose, vision, values or a simple message about culture or value proposition. As they demonstrate the courage of their company’s principles, they develop the influence and impact required to build a clear identity of an exceptional company.
Through effective mobilization, appropriate governance and strategic management, management can embed new strategy and new culture into their business management systems, thus creating a continual process to meet the current and future strategic needs of the organisation.
3. Translate the strategy into the everyday action. Instead of following industry best practices as the right way to success, successful companies build custom-made capabilities that differentiate them from the rest. Effective leaders need to endorse two kinds of perspectives simultaneously; short-term and long-term views. On one hand, they are the architect and chief builders of the capabilities, on the other they operate tactically at a minuscule level of detail so that they can see, sense, touch and feel the details of everyday activity, and strategically so that they raise their view high enough to see clearly and show others.
Successful companies make strategy everyone’s daily job by educating the organization about strategy, help employees develop personal objectives, then compensate them based on their adherence to and implementation of the business’ strategies. They also aim to make strategy a continual process by linking strategy to the budget process; review strategy regularly in management meetings; and develop a process for learning and adapting strategy.
4. Leverage your culture’s strong attributes. Instead of focusing on business organization restructuring or incentives redesign, successful companies put their culture to drive desired change; they leverage the power of the deep-rooted and entrenched beliefs and behaviors. Effective leaders devote themselves to the cultivation of collective expert skills in a way that matches the unique cultural attributes of their company. Their actions are fully instilled in the company’s culture; you lead by example and practice mutual accountability where everyone’s success is important.
5. Prioritise resources and allocate strategically. Instead of trying to reduce costs across the board by going lean everywhere, successful companies allocate resources strategically. Effective leaders ensure that company’s resources are consistently allocated toward strategic priorities. Equally, their personal resources (time and attention) should be devoted to the most critical capabilities and the value proposition they support.
Successful companies instill a mindset of clear priorities by working on the dual plan of both clarifying strategy and providing a rigorous framework for its implementation, thus enabling managers to deliver strategy, by translating business plans into detailed operational plans, leveraging also the company’s performance management system. The overarching goal is to provide a guidance to senior and middle management in taking tactical decision, which proved to be, in the past, very loosely connected to the overall strategy of the company.
6. Envision and build the future. Instead of attempting to become a responsive company by swiftly reacting to external changes as and when they unfold, successful companies create the change they envision and shape their own future. Effective leaders view themselves as the change agent who can lead with courage and humility. They are the architect of their destiny; they invest in strategic capabilities and build an extremely talented team, whilst recognising that the future will ultimately depend on developing the next generation of leaders.
7. Establish consistency and integrate learning into the strategic and planning processes, end-to-end. A critical foundation for success in the implementation has been to demystify strategy, somewhat making strategic thinking a routinely and integral part of the forecasting processes that were in place already in the company. This step entails, among the others, also a deeper and continuous monitoring of the achieved results, along with increased accountability for the employees and a more clear and direct tight between the rewarding system and the results achieved. Effective leaders demonstrate an open and inquisitive mind and a learning attitude by embracing what works and be willing to think outside the box.
Successful companies establish a structured process to strategy and operation reviews as a means to monitor performance, take corrective actions and promote learning. They also embrace testing and adaptability through profitability analysis, strategy correlations and embracing emerging strategies.
It must be noted that mastery of strategy development and implementation is a long-term process that requires perseverance and resilient leadership. Embracing these acts of leadership can boost confidence and help forward looking companies to close the gap between strategy and execution, and result in creating a high performance culture and an engine of growth to the company as well as building a high-performance strategically-oriented corporate culture. They can also provide an opportunity for deep and powerful leadership development across the organisation where strategy and execution are closely integrated in every decision, thus creating an agile business culture that ensures long-term sustained success.
About the Author
Dr Yahya Shakweh is a well-established executive, business strategist, thought-leader, director and advisor.
[Image courtesy of Stuart Miles at FreeDigitalPhotos.net]