Monitor Exection

Do you monitor strategy execution?
A. We have no strategic plan.
B. We informally monitor strategy execution, from time to time.
C. We monitor strategy execution two or three times a year.
D. We monitor and assess execution progress every quarter, identify barriers to strategy execution, and take remedial actions.
E. We monitor and assess execution progress every month, identify barriers to strategy execution, and take remedial actions.
[Score:  A=0, B=1, C=2, D=3 and E=4]
Why is this question important?

There are two fundamentals that drive organizational success:

  • strategy execution and
  • available resources – the people required to deliver strategy.

The crux of organizational success rests with the capability to execute.  Some of the reasons for the failure to attain and deliver well-crafted strategies are the following according to a study by Kaplan and Norton (of The Balanced Scorecard fame):

  • 95% of the workforce doesn’t understand Strategy
  • 60% of organizations budgets are linked to Strategy
  • 70% of organisations management incentives are not linked to strategy
  • 85% of executives spend less than an hour per month discussing strategy

From this study it was also found that organizations’ which were successful at executing their strategy shared the following principles:

  • Translated strategy into operational terms (objectives)
  • Cascaded strategy to all divisions and individual scorecards / performance agreements – making strategy everyone’s everyday job
  • Managed their strategy execution on a continual basis
  • Aligned budgets to strategy
  • Mobilised change through effective leadership

Strategy execution is more important than development of strategy.  You need the competencies, skills and capabilities and teamwork to execute strategy.

Strategy is never sustainable unless it is it is supported by consistent execution of strategy by top management.  It is great implementation which makes a strategic plan, a roaring success. It is also great execution that provides early warnings that strategy is off course.

Many businesses spend considerable time in developing a strategic plan, but despite everything they fail to achieve the results they planned.  Why?  They do not create the opportunity to track the execution indicators which are vital for strategy implementation or provide the time to communicate major goals and objectives to their employees.

Development of key performance indicators and implementation of a monitoring system for their implementation allow managers to focus on major initiatives and designate the activity of all staff to achieve strategic objectives.

Operational Review Meetings versus Strategy Review Meetings

Operational Review Meetings

Operational review meetings review short-term performance and respond to recently identified problems and issues that demand immediate attention.  Many companies have weekly, twice-weekly meetings to review operating dashboards – sales, bookings, service delivery … and to address issues that have arisen – customer complaints, late deliveries, stock-outs, break-downs …  Such meetings should be short, highly focused , data driven and action centred.

Strategy Review Meetings

You should schedule monthly strategy review meetings to review the progress of the strategy – whether strategy execution is on track, detects where problems are occurring in the implementation, determines why problems are occurring, identifies actions to correct the situation, and assigns responsibility for achieving the targeted performance.

Both operational review meetings and strategy review meetings are of course necessary – but they serve different purposes and should be separate meetings each with their own specific agenda.

Periodically you need to assess whether the agreed-upon strategy remains valid in light of new knowledge, information, opportunities and changes in the competitive, technological, economic and regulatory environment.