Strategy Execution Priority 3: Staying on Your Toes
By David Gordon | February 28, 2010
For those of you tuning into this fourth instalment without the background of our previous discussion, here is quick recap.
Leaders today are becoming aware that a major organizational weakness lies in the gap between management's two primary functions - planning and executing. Crossing the gap between planning and execution is not rocket science, and if you can do it well, you are roughly two to three times more likely to outperform your peers.
In order to successfully execute your business strategy there are three keys:
- Align and engage organizational units and employees to the organization's core foundation, strategy and corresponding initiatives
- Create new forms of accountability that allow employees freedom to operate and contribute but always within the context of the strategic initiatives
- Improve adaptability to quickly respond to performance gaps, eliminate commitment escalation to failed courses of action and quickly make course corrections as needed.
In our second instalment we discussed a methodology to align and engage organizational units which consisted of the following activities:
- Start REAL communications early
- Squelch employee complacency
- Identify false urgency and turn it into true urgency
- Motivate employees and focus on alignment to the strategic objectives
- Hold one-on-one, off-site meetings every six to eight weeks to track employee progress and discuss concerns
- Begin to tie personal employee goals to organizational initiatives
In our third instalment we discussed how to build accountability and get a grip on results. This consisted of the following activities:
- Understand factors that motivate employees
- Realize that compliance is not commitment
- Map out employee primary job responsibilities so that day- to-day operations of the organization continue smoothly;
- Tie individual goals directly to the strategic initiatives
- Get feedback and approval and utilize this experience to build effective two- way communications
- Keep performance agreements you develop current to maximize their value
In this instalment we are going to delve into the final element of successful execution of your strategy: improving adaptability to changing circumstances.
Think of a hockey game. Prior to the game, coach and team players watch footage of their team and the rival team in action, looking for potential internal strengths to maximize and weaknesses to protect, while highlighting potential threats and opportunities the rival is displaying.
The team then develops a strategy for the game ahead with a corresponding set of plays that they believe will take them to victory.
Everyone hits the ice and is ready to win. The puck drops. In the first few minutes of the game it becomes clear that things are not working out as planned.
If the opponents are skilled, they are likely observing what our team is up to and making constant adjustments to their own strategy.
At this point it wouldn't do much good for the coach to look at a written strategy document to decide what do to next. He had better be observing the game, focusing on new opportunities and making effective corrections with the players at hand. Can you imagine what the outcome would be if this team stuck to its original strategy throughout the game without strategic adjustments to counteract the opponent? Something like 0-5. Worse yet, imagine if the team continued to play the whole season without changing its strategy? Yikes! Last place, here we come!
Now, back to business. Let me ask you: How many companies spend substantial time developing strategic or business plans only to execute them without adapting their elements to the changing environment? Far too many!
On the other side of the coin, how many companies shelve their plan, operate in a day- to-day, reactive manner, and return to the plan at the end of the year only to discover that its goals were not met and are not even relevant anymore? From my experience, even more of them!
It seems like it would be common sense that in business, as in sport, we need a plan so that we have a basket of plays to build from and know where we want to get to. However, we can't rely entirely on the plan and we need to adapt to our ever-changing environment.
So why do businesses become bogged down in their strategy or perhaps forget they had one at all?
My firm has pinpointed a few key reasons why this seems to happen. Specifically, there is:
- Deep commitment to the plan that ignores feedback
- Lack of visibility into a complex and ever-changing landscape
- Poor inter-organizational communication
Let's get down to it. Here's what you can do to overcome these key issues, improve your adaptability and beat your competition.
Understand that linear strategy is dead
As we saw from the earlier example, the concept of developing a plan, creating specific goals, trying to execute the plan and then, at the end of the period, evaluating the success of the plan is not very effective. This is because such a linear view fails to incorporate new information into the strategy and act upon it accordingly.
Often management will pay hefty sums for the development of a strategic plan, or perhaps substantial internal resources are committed to develop the plan. Ultimately, once the plan is finalized, there is a sense that this is the best course of action and that by pushing ahead the organization will be successful.
However, all this development takes time and once the plan reaches its final form, much of the information in it may already be dated. Nimble competitors may have shifted focus or the strategy simply no longer applies to the new business or economic landscape. A fatal flaw would be to proceed with this plan as is and yet, due to the time, energy and resources put into it, commitment deepens and many management teams develop an emotional bias towards the plan.
Worse yet, many companies (usually smaller ones with a visionary/entrepreneur at the helm) simply operate on the leader's "gut feeling" about what needs to be done. Usually these leaders lack an external gaze and have a tendency to ignore negative feedback. They push forward with an ever-shrinking myopic view until the organization reaches its demise.
Plan, but think iteratively
By keeping the plan alive and continually incorporating new information as it arises, you can be better positioned to maximize SWOT analysis (Strengths, Weaknesses, Opportunities and Threats).
A strong foundation that includes your vision, mission, core values and key initiatives for the performance period is still needed; however, spend less time developing a concrete plan that you could use as a door stop. Rather, develop a "lighter" plan - a few pages at most. Still think about what you want to accomplish and be critical of your environment, just don't get so bogged down that you end up with a 300-page strategic plan that is totally unrealistic to your resources. This lighter plan will ultimately reduce commitment escalation and allow you to more easily make course corrections and remain adaptable to an ever-changing landscape.
The OODA Loop
Once clients have developed a "light" business plan, we recommend they use the "Boyd Loop," otherwise known as the "OODA Loop" to help keep you on your toes.
John Boyd, a 1950s ace fighter pilot and well-known military strategist, found that by continually working through a process of observation, orientation, decision-making and action he was able understand his opponents' decision-making cycle, react quicker, and outperform them.
It may seem to you that this loop is a common- sense way of showing how we make tactical decisions. It is. However, do you do it? Do you do it well?
All good iterative decisions are ultimately grounded in observing raw information in an evolving situation. To do this well you will need your organization to have an external gaze and develop formal methods that ensure timely, accurate information is coming back from the front lines to the decision-makers.
This can largely be accomplished by implementing a formal two-way communication process which I will get into shortly. It is worth noting that Orientation - the second "O" - is when filtering takes place and often when problems begin. Think of this as transforming raw data into information.
Orientation ultimately leads to an analysis and synthesis of observations; however, it involves many personal and emotional factors - some subconscious - such as values and previous experiences through which individuals will screen their observations. These factors have a tendency to skew the raw data and may lead to poor-quality information for your decisions. I can't help but think of the recent concerns with the climate data from the University of East Anglia while writing this. As a leader, you likely have somewhat limited visibility into the issues your front-line workers face while implementing strategy. This could be because you can't talk to every customer or, due to your position in the organization, your employees will only disclose so much, or simply because you can't be everywhere at once.
In other words, your access to raw primary data affecting the organization is limited and it is difficult to make direct observations.
Due to the very nature of running an organization, you likely rely more heavily on the direct reports of a few individuals on your team.
This information may have passed through two or more echelons before it reaches you, at which point it synthesized to some degree.
This synthesis of data can be extremely valuable - again because you can't do everything; however, even if unintentional, information biases will creep in which may limit your ability to see the whole situation with clarity.
So, how does one get well-synthesized information that has limited biases to it?
Strong alignment = better orientation
In order to have a team orient quickly and effectively together and get those valuable observations to decision-makers, you will need to have strong organizational alignment. Suffice it to say, aligning and coaching on core values will get you on your way although I suggest you read the second article in this series, "Improving Organizational Alignment." for a more complete description.
Competitive advantage in adaptability
The real value in utilizing the OODA Loop comes when you can quickly undertake the loop process and get back to observing. If your team is accurately processing and documenting the raw data and escalating timely, relevant and accurate information flows, you can get "inside" your opponents' decision-making cycle.
To you, it will feel like time slows down. You will be able to make effective decisions and put them into action before your peers have processed the original observations of what is happening.
In other words, this additional time to make effective decisions will enable you to out-think and outmanoeuvre your peers - a valuable competitive advantage.
How do you create, process and document this kind of intangible data?
Develop an effective two-way communication process
Like your car, in order for your OODA Loop to be valuable, it needs to have the right fuel. In this case, the fuel is a formal two-way communication process.
This communication process must:
- Document key conversations between managers and employees
- Force managers and employees to meet on a regular basis to discuss issues around the execution of the strategy
- Force both managers and employees to pre-score employees' progress toward goals and alignment to organizational values and to document any concerns before they meet to discuss them
- Open discussion about employees' alignment to the organization's values,
- Open discussion about employees' accomplishment of primary job responsibilities
- Encourage discussion of employees' progress towards goals
- Create opportunities for employees to express otherwise intangible elements of what is happening as they go out and try to implement the strategy.
Without such a communication process, your organizational OODA Loop will be ineffective, even dangerous, as you attempt to orient and act on phantoms rather than on actual concerns. This process will clear that right up and give you the information fuel you need to make effective decisions.
Implement a dashboard
I discussed the importance of a dashboard in my other instalments. So simply stated, if you don't have one, get one.
Without a dashboard, you will be driving without your headlights on. With one, roadblocks that are forming can be quickly pinpointed and mitigated. Initiatives that are falling behind can be investigated and resources shifted, if necessary. You'll be able to quickly scan through the data, highlighting areas of concerns. You'll also be able to delve into the root of concerns to ascertain if the issues are localized and easily remedied or if something more systemic is happening.
Automate your strategy execution process
The final tool that will help you respond effectively to changing variables is to find a system that automates many of the components I've discussed.
After all, how on earth do you plan to tie strategic initiatives to goals, pre-score meetings, monitor accountabilities, develop and score performance measures, evaluate value alignment and have all this information available in a dashboard format for leaders to quickly check resource allocations, monitor goal progress and scan for problems in any other effective way? Please don't say Excel.
A good backbone system simplifies reporting, improves access to information and, most importantly, keeps you on track.
So, stay on your toes. Think of the OODA Loop and develop a good two-way communication process to fuel your information flows. I'm confident you'll soon be on your way to successful implementation of your strategy. I wish you the best of luck.
David Gordon, Partner, Strategylink Consulting