Strategy Execution

Execution is the ability to
mesh strategy with reality, align people with goals, and achieve
the promised results.

– Larry Bossidy

Website not in your language ? Right-click anywhere on the page and select ‚Translate‘ from your browser’s menu.

Strategy Execution & Strategy Implementation

Strategy Execution and Strategy Implementation are crucial for achieving organizational goals, but they are not interchangeable terms. While interconnected, they represent distinct aspects of the process of turning strategic plans into tangible results.

  • Strategy Execution is the overarching process of putting a strategy into action to reach organizational goals.
    It involves aligning people, processes, and resources to effectively deliver on the strategic plan. Think of it as the „what“ and „why“ – defining the roadmap and ensuring everyone understands the destination.
  • Strategy Implementation focuses on the specific activities and actions required to bring the strategy to life.
    It’s the „how“ – the tactical execution of the plan, involving project management, resource allocation, and performance monitoring.

The Challenges of Strategy Execution

Successfully executing a strategy is notoriously difficult. Common challenges include:

  • Lack of Alignment: When teams and individuals don’t understand or aren’t committed to the strategy.
  • Poor Communication: Leading to confusion, misunderstandings, and conflicting priorities.
  • Inadequate Resources: Insufficient budget, people, or tools to carry out the plan.
  • Resistance to Change: Employees or stakeholders may be reluctant to adapt to new ways of working.
  • Ineffective Monitoring: Failure to track progress, identify roadblocks, and make necessary adjustments.

The Benefits of Effective Strategy Execution

When done well, strategy execution delivers significant benefits:

  • Enhanced Operational Efficiency: Streamlined processes, reduced costs, and better resource utilization.
  • Higher Employee Engagement: A clear sense of purpose and direction fosters motivation and commitment.
  • Improved Adaptability: Ability to respond effectively to market changes and seize new opportunities.
  • Increased Competitive Advantage: Stronger market positioning and differentiation.
  • Improved Financial Performance: Increased revenue, profitability, and market share.

Project Management and Process Management

Strategy execution and implementation rely heavily on robust project management and process management practices.

  • Project management provides the structure for one-time, often first-time non-recurring initiatives crucial to strategic change. It focuses on organizing, planning, and executing these unique activities.
  • Process management ensures efficiency and alignment of recurring, day-to-day operations with strategic goals. It optimizes these ongoing activities for consistent and effective execution.

Effective project and process management disciplines are essential for translating strategic intent into tangible outcomes.

Strategy Execution Frameworks

Since decades strategists have been aiming to formalize strategy execution into strategy execution frameworks.

Five well kown frameworks are:

Management by Objectives (MBO)

  • MBO is a management approach where managers and employees jointly set specific, measurable, achievable, relevant, and time-bound (SMART) objectives. Progress is regularly reviewed, and performance is evaluated based on the achievement of these objectives.
  • MBO was popularized by Peter Drucker in his 1954 book, „The Practice of Management.“ Thus, it is roughly 70 years old.
  • Pros: Clarifies expectations and aligns individual goals with organizational objectives, enhances employee motivation and engagement through participation in goal setting, improves communication and feedback between managers and employees, provides a clear framework for performance evaluation.
  • Cons: Can lead to a focus on short-term goals at the expense of long-term strategy, may create excessive paperwork and bureaucracy, can foster a competitive environment if not implemented carefully, can be difficult to implement in rapidly changing environments.

Management by Exception (MBE)

  • MBE is a management approach where managers intervene only when deviations from planned or expected results occur. It relies on establishing clear standards and monitoring performance against those standards.
  • MBE has roots in scientific management principles and has evolved over time. While not attributed to a single originator, its formalization grew significantly during the mid-20th century, becoming widely used by the 1960’s, placing it at over 60 years old.
  • Pros: Allows managers to focus on critical issues and strategic priorities, improves efficiency by minimizing unnecessary interventions, empowers employees to handle routine tasks and make decisions, saves management time.
  • Cons: Requires clear and well-defined standards and monitoring systems, can lead to a reactive rather than proactive management style, may result in delayed responses to problems if monitoring is inadequate, can cause employees to feel that management only reacts to negative events.

OGSM (Objectives, Goals, Strategies, Measures)

  • A simple and straightforward framework that translates strategic objectives into specific goals, strategies, and measures. It helps to ensure that everyone understands the strategy and how their work contributes to its success.
  • OGSM’s origins can be traced back to Japan in the 1950s; around 70 years old
  • Pro: Easy to understand and implement, provides a clear line of sight from objectives to actions, facilitates communication and alignment
  • Contra: May oversimplify complex situations, can be too rigid for some organizations, requires discipline to maintain focus.

Hoshin Kanri

  • A strategic planning and execution methodology that aligns company-wide goals with daily employee activities. It emphasizes a top-down and bottom-up approach to ensure everyone is working towards the same objectives.
  • Developed in Japan in the 1960s, with roots in Total Quality Management (TQM); over 60 years old.
  • Pro: Improves communication and collaboration, enhances employee engagement and ownership, drives continuous improvement, fosters a culture of problem-solving.
  • Contra: Can be time-consuming to implement, requires strong discipline and commitment, may not be suitable for rapidly changing environments, 

OKR (Objectives and Key Results)

  • A goal-setting framework that helps organizations define ambitious objectives and track progress through measurable key results.
  • Popularized by Google, but its roots trace back to Intel and Andy Grove in the 1970s; around 50 years old.
  • Pro: Promotes ambitious goal setting, enhances focus and alignment, increases transparency and accountability, fosters a culture of high performance.
  • Contra: Can be challenging to set effective OKRs, requires strong leadership commitment, may not be suitable for all types of work

7-S Framework

  • A framework developed by McKinsey that analyzes seven internal elements of an organization: Strategy, Structure, Systems, Shared Values, Skills, Style, and Staff. It helps to ensure that all elements are aligned and working together to support the strategy.
  • Developed by McKinsey consultants in the 1980s; around 40 years old.
  • Pro: Provides a holistic view of the organization, helps to identify areas for improvement, facilitates organizational change.
  • Contra: Can be complex and time-consuming, may not be specific enough for some situations, requires strong analytical skills.

Balanced Scorecard

  • A performance management framework that aligns day-to-day work with an organization’s strategic goals. It uses a mix of financial and non-financial measures to provide a balanced view of performance.
  • Developed by Drs. Robert Kaplan and David Norton in the early 1990s; over 30 years old.
  • Pro: Provides a holistic view of performance, links strategy to operational activities, improves communication and alignment, facilitates performance measurement and tracking.
  • Contra: Can be complex to implement, requires ongoing maintenance and updates, may not be suitable for all organizations.

Gartner Advanced Analytics

  • This framework emphasizes the use of data and analytics to drive strategy execution. It consists of four stages: Descriptive, Diagnostic, Predictive, and Prescriptive Analytics.
    Prescriptive analytics, which uses AI and machine learning to recommend actions, is a key element of this framework.
  • A data-driven approach to strategy execution.
  • Developed by Gartner, a leading research and advisory company; relatively new, with increasing adoption in recent years.
  • Pro: Provides data-driven insights for decision-making, enables proactive course correction, promotes agility and adaptability.
  • Contra: Requires strong data infrastructure and analytics capabilities, can be complex and expensive to implement, raises ethical considerations around AI and data privacy.

The best framework depends on the specific organization and it’s needs, culture, and goals.

 

Strategy Execution – our Expert Services & Digital Services

Our strategy consultancy helps organizations bridge the gap between strategy development and execution. We offer a range of services, including:

  • Strategic Planning & Alignment: Facilitating the development of clear, actionable strategies and ensuring alignment across the organization.
  • Project & Program Management: Providing expert guidance and support for managing strategic initiatives.
  • Process Optimization & Improvement: Analyzing and redesigning processes to enhance efficiency and effectiveness.
  • Change Management: Helping organizations navigate and embrace change associated with strategy implementation.
  • Performance Monitoring & Measurement: Developing and implementing systems to track progress and measure impact.

Request for information

Request for proposal

Last but not least :

Strategy is a commodity,

execution is an art.

– Peter Drucker