A recipe for success: How to execute a strategy - The Finance Team

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A recipe for success: How to execute a strategy

Have you ever tried to make your own meringues? According to a friend of mine, who is known across Johannesburg for hers, it’s the most ‘difficult simple’ recipe in the world. It involves no more than five ingredients and a few – seemingly simple – steps. But make one wrong move and your meringues will flop, or end up tasting like sugared scrambled eggs.

Strategy execution is a little the same way. The concept is simple enough. Map out your strategy, then implement it. But the failure rates are rather high. According to the American Management Association, more than 60% of all business strategies are not successfully implemented. It’s no surprise, then, that strategy execution has become a major concern for senior managers around the globe. In fact, in a 2014 survey conducted by the Conference Board, CEOs rated concerns about strategy as their number one and number two most challenging issues.

In order to make sure her meringues come out just right, my friend has a few tips. Whisk the egg whites for a few minutes longer than you think you need to. Leave them in the oven to dry out for several hours after baking. And when you’re finished, store them in an airtight container.

In the same way, each of the gurus have their own tips for ensuring the success of your strategy execution. Harvard Business School professor Robert Kaplan and management consultant David Norton set theirs out in The Execution Premium: Linking Strategy to Operations for Competitive Advantage.

The book presents six steps intended to help organizations derive what they call an “execution premium”. If followed, they say businesses will see an increase in value stemming from successful strategy execution. The six sequential stages are as follows:

  1. Develop the strategy

It goes without saying that the first step involves developing a strategy that is worth implementing. This should involve your culminating vision of the company’s future in light of its strengths and anticipated opportunities.

  1. Plan the strategy

This might sound a little like the cart going before the horse, but it’s necessary to envisage your strategy before you plan it. Now that you have your ideas sketched out, you can put practical steps in place to flesh it out.

  1. Align the organization

Kaplan and Norton highlight Thomas Edison’s observation – “vision without execution is hallucination”. They highlight the need for the company to be aligned with the strategy that has been planned. In other words, your strategy needs to be actionable within the organization. Are the necessary systems in place to carry out your plans? Do you have the necessary leadership to oversee the plans? Does the organization need a culture shift in order to plausibly embrace what is envisaged?

  1. Plan operations

Once you have ensured the supporting structures and environment are in place, you need to plan how your operations will roll out your strategy. Successful strategy execution involves working in an environment where operations are geared towards achieving strategy-driven plans. This won’t happen organically; it involves thoughtful, deliberate oversight and changing of operations to align with the bigger picture.

  1. Monitor and learn

Here comes the reflexive part of the process – the part that ensures your company continues to progress. It’s the time taken to look at what you’ve learned with the experience of strategy execution, and what you might do differently with hindsight. It also includes putting easy, transparent systems of measurement in place. In order to monitor your success, you need to establish a realistic benchmark – and then be brutally honest with yourself when you’re gauging your progress. Now’s the time to identify what to do differently, and then move onto step six.

  1. Test and adapt

Tweak your approach based on your monitoring feedback and then test your newest changes. Adapt where necessary. This is a stage that allows for fluidity. It should signify that you are close to “arriving” – these steps should be putting the last touches on a largely successful strategy execution.

These six steps outlined by strategy execution pundits outline a tested “recipe” for strategy implementation. In order to enjoy success, however each step bears scrutiny and careful following. If your company wants to make a success of its strategy execution, get in touch with The Finance Team. We can help outline a process that will see your company as one of the few that derive real value from a well-conceived plan.

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