Understanding the Fundamentals
Execution is a complex business and has various driving factors. High performance companies usually have the skills in place to drive successful strategy execution. Also, the creation and communication of a clear strategy that's aligned with organizational vision and goals can effectively drive strategy execution.
A company with the speed and ability to act quickly and make decisions is usually better equipped for execution. Companies must also secure employee engagement and capability and execution-focused leaders to implement strategies. Finally, a company must understand how customer demand and allocation of resources drive strategy execution.
Barriers to execution arise when the company has unclear plans, when employees in the company lack understanding of the strategy, and when the strategy doesn't address employee skills and needs and doesn't provide a way to reward performance.
Crafting a Business Strategy that Executes
Business strategy involves making decisions about what a company should do and how it should allocate resources. You can execute the strategy once it's in place, but without a good strategy, execution won't happen smoothly. To create a strategy that executes, you first need to define the strategy by fully examining the business, its goals, and its environment.
Defining the strategy involves performing three steps – clarifying the mission, vision, and values; reviewing the current situation; and creating strategy direction statements.
The mission, vision, and values statements form the basis of the company's purpose, actions, and aspirations, and clarify why the company is in business. To review the current situation, you examine external influences, internal influences, and the existing strategy. In the final step, you use the information gathered during the first two steps to set targets for how the organization intends to create value in the future.
Linking Strategy to People and Operations
Creating an exceptional strategy doesn't guarantee that it'll be executed successfully. To ensure your strategy is implemented effectively, it's important that employees understand how their work fits in with the big picture. You also need to translate strategy into tasks, and motivate employees by showing them how these tasks contribute to the strategy.
When communicating your organization's strategy to employees, you must explain why the company has made this decision and communicate the strategy constantly using diverse methods. You need to communicate with those who'll eventually implement the strategy and explain its benefits to them. And you should communicate in ways that encourage employees to help shape the strategy.
Monitoring and Evaluating Initiatives
Strategies are only useful when they're implemented effectively. To ensure that a strategy is effective, execution needs to be monitored on an ongoing basis. There are four methods you can use to monitor strategy execution. These include action plans, strategic dashboards, strategic review meetings, and reviewing employee engagement.
Action plans are informed by strategy maps and include individual work assignments assigned to individual employees. Strategic dashboards contain scorecard information along with detailed reports and data that executives can use to monitor the "health" of the company at a glance. Executives review feedback from strategic dashboards at strategic review meetings and discuss any problems with implementation.