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What does it take to succeed in strategy execution? The audience at the CEO Forum is eagerly awaiting the answer.
This blog series will give you the practical tools you need to become one of the successful companies everybody is talking about — both now and in the future. We will demonstrate that strategy acceleration is one of the key ingredients in the recipe for creating a profitable and successful company.
The Power of a Thoughtful Strategy
A company’s strategy is the compass that provides direction and focus, both for management and the entire organization. Irrespective of the industry you operate in, having a well-crafted strategy is essential. Strategy execution is the process that brings the strategy to life. But what exactly do we mean by strategy execution, and what elements can a strategy encompass?
Examples of typical strategic initiatives include:
- Increasing revenue and/or profit margins
- Expanding the company’s market share
- Enhancing the company’s overall value
- Transitioning from traditional to digital work methods
- Improving and transforming sales processes
- Undertaking significant reorganizations
- Investing in environmentally sustainable practices
Most companies today have a documented strategy in place. However, the challenge lies in moving from ideation to action. Some organizations remain stuck at the strategy document stage, while others make conscious efforts to execute their strategy in a structured manner. Unfortunately, many struggle to achieve success, often encountering slow progress.
The Board’s Critical Role
Boards and management teams generally recognize the significance of having a strategy and executing it effectively. However, the board’s involvement in this crucial work is sometimes neglected. Small and medium-sized companies, in particular, tend to focus excessively on control and operational matters, wasting valuable time that could be devoted to shaping the company’s future.
In our view, the board holds a clear and distinct responsibility for strategy work. There should be no ambiguity about where this responsibility lies.
The board’s responsibilities include:
- Making decisions regarding a new strategy or ensuring the execution of an existing one according to plan.
- Making difficult yet necessary decisions and creating conditions for successful execution.
- Providing oversight and ensuring targets are met.
Despite an awareness of the distribution of responsibilities and the workflow, actual results are often lacking. Strategy execution becomes stagnant, halts, or worse, dissipates completely. This pattern has persisted for nearly two decades. Why, then, do so few take action to address this problem?
“We have a sound strategy; we all know our direction and the necessary actions. Yet, our repeated failures stem from our inability to execute the strategy within the designated timeframe,” shared a somewhat frustrated CEO we recently encountered after years of unsuccessful strategy implementations.
Challenges Extending Beyond Companies
The need for effective strategy creation and execution extends beyond corporations. Governments, municipalities, and other organizations face similar challenges. As digitalization permeates society, citizens demand new and innovative solutions for public services, be it in policing, healthcare, integration, education, elderly care, or childcare. We often hear promises of new goals and strategies during election periods. However, what efforts are being made to effect behavioral change and implement these strategies in reality? The public sector has significant room for improvement, providing ample opportunities to make a difference.
The First Step: Aligning Goals
Achieving success in strategy execution hinges on a crucial factor: ensuring that management, managers, and employees possess a deep understanding of and alignment with the company’s goals and direction.
However, when we examine the results of a study conducted by the ADP Research Institute in 2017, titled “Evolution of Work 2.0: The Me vs. We Mindset,” it’s easy to feel somewhat disheartened. The study highlights a significant gap between decision-makers and those responsible for implementing those decisions. With such statistics, it’s not surprising that strategy execution often falls short.
Within the 82 percent of individuals who express a desire to understand how they can contribute to the bigger picture, there likely exists a considerable amount of frustration. Imagine the transformative potential if this large group of employees felt fully onboard with the strategy train. The release of such immense collective power would be truly remarkable.
Leaders struggle to prioritize the most important initiatives. Employees don’t know what to focus on, yet 82% want to contribute.
Harnessing the Untapped Potential
The positive aspect lies within the 82 percent of employees who possess a strong desire to contribute. This represents a vast untapped potential that management teams should focus on. By making employees aware of the company’s goals, a shared determination to contribute to its future existence can be cultivated. This opportunity is too valuable to be lost, yet it often slips away in many companies. This realization underscores the vital role that communication plays in our methodology, also known as the Howwe® Way of Working.
The Recipe for Success
Every day, we come across numerous well-known companies that serve as exemplary models, such as Amazon, Uber, and Spotify. They have demonstrated their ability to seize trends early, leverage technology to their advantage, outpace competitors, and amass billions of dollars in market value. Interestingly, three out of the current top ten most highly valued companies did not exist in 2000. Naturally, other companies are keen to understand the secret behind their success.
The attention garnered by these companies has sparked various analyses aiming to uncover the recipe for their achievements. Through extensive study, we have extracted valuable insights concerning their strategy execution.
Research has shown that companies capable of adapting and implementing strategies faster than their counterparts enjoy a competitive advantage, with average growth rates 40% higher and profits 52% higher than the industry average.
So, what sets these companies apart in terms of strategy execution?
- They execute new strategies faster than their competitors.
- They have a clear direction and effectively communicate their strategy to achieve goals.
- They employ a well-defined process to break down goals within the organization.
- They visualize their goals clearly and track progress towards achieving them.
- They foster effective cross-functional collaboration among different departments.
- They are bold in their approach, driven by data.
This blog series centers around achieving success through strategy acceleration. In this post, we delved into the concept of strategy acceleration and explored the recipe for success. When it comes to strategy execution, valuable lessons can be gleaned from historical perspectives. Therefore, our next blog post will take a historical look at strategy work.
