Going Live with Your StrategyI've written about the knowing-doing gap previously. I'd like to follow up with some practical ideas in the specific area of getting from knowing what your company's strategy is to actually executing it successfully.
Thanks to strategy consultants Michael C. Mankins and Richard Steele, we have a research-based checklist of seven steps for effective strategy development and implementation.
Writing in the July-August 2005 issue of the Harvard Business Review, Mankins and Steele note, as any number of other researchers have, that "despite the enormous time and energy that goes into strategy development, many companies have little to show for their efforts." To make your own organization's strategic planning efforts pay off, Mankins and Steele recommend:
- Keep it simple, make it concrete. Explain in clear language where the company is headed and why. Describe what the company will and will not do.
- Debate assumptions, not forecasts. Create cross-functional teams with representatives of planning, marketing, and finance to ensure that the assumptions underlying your long-term plans reflect both the real economics of your company's markets and its actual performance relative to competitors. Avoid debating forecasts because such discussion, due to its links with performance evaluation and compensation, invariably becomes political (as opposed to fact-based).
- Use a rigorous analytic framework. You want a sound way of linking your business's performance in the product/service market with its financial performance. Therefore, make sure that the dialogue between headquarters and the business units about market trends and assumptions is conducted within a rigorous framework. Mankins and Steele offer profit pools as an example.
- Discuss the level and timing of resource deployments early on. This is essential for arriving at realistic forecasts and for making execution of your plans as efficient and successful as possible.
- Clearly identify priorities. Use agreed priorities to guide tactical decisions. You want employees to have a clear understanding of where to direct their efforts.
- Continuously monitor performance. Identify and monitor the primary drivers of performance, and then track resource use and results against plan. Use this continuous feedback to reset assumptions and reallocate resources as necessary.
- Reward employees' execution performance, and continuously strengthen their capabilities. You want both to motivate continued good performance and to equip employees to steadily improve their skills.