7 Tips to Effectively Execute Strategy

B|G has found that organizations tend to manage to incorporate the first three ingredients into their strategy, including an understanding of their internal environment, considering the external environment, and developing long term and aspirational goals to achieving a shared vision.  The most important, and most challenging, ingredient of strategy is the ability of organizations to show lasting passion and perseverance during strategy implementation. Let’s further understand the necessary elements to effectively execute strategy:

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1. Communicate‍

Successful strategies are effectively communicated, and understood, by all stakeholders. It isn’t enough for stakeholders to be aware of the goals and initiatives outlined by leadership; a strategy comes to life for employees when they are actively involved during development and have an opportunity to voice concerns and participate during rollout of the strategy. B|G has found organizations that cascade enterprise strategies to each of the organization’s departments and ensure a proper understanding of how success is measured in their lines of work will lead to shared vision across the organizations.

Communication that only shows long-term success can lead to poor morale and a lack of buy-in. Studies show 70% of failed strategies don’t succeed because “results aren’t worth it or aren’t working” (Powelson, 2019). B|G has found organizations “creating short-term success and “building momentum by stringing together small successes” greater long-term growth. (The Halo Effect & Strategy). Leaders that involve their full teams during the implementation of quick wins result in 20% to 30% higher performance than their peers (Safferson, 2009).

2. Prioritize

Michael Porter, Strategist and creator of Porter’s Five Forces shared the one of the most important elements of execution: Strategy is about making choices, trade-offs; its about deliberately choosing to be different.” When organizations think big, numerous ambition goals and initiatives are articulated by passionate members of an organization. Organizations that successfully implement strategy are able to prioritize initiative and actively deploy resources to achieve a shared vision.

Properly allocated resources can be a great challenge for organizations. One study found 47% of companies move people across units and 33% aren’t comfortable disrupting units of the organization. Additionally, less than 15% of managers believe they have the proper resources to achieve their company’s top priorities (Homkes, 2015). Effectively prioritizing and sequencing initiatives requires great discipline, transparency, and healthy debate among leadership. B|G recommends further understand the impact of top initiatives to help during prioritization.  Cost-benefit analysis, alignment to mission, and an organization's ability to execute should all be considered for top projects in an organization. Organizations that properly allocate resources across business units achieve 30% higher average shareholder return over those that were ineffective in doing so (Homkes, 2015).

10 Minute Strategy Self-assessment

3. Coordinate

Organizations must effectively utilize their resources to execute upon top initiatives. This requires strong alignment and coordination among the business units across the organization forward. driving initiatives. Strategy pioneers Robert Kaplan and David Norton have found that  67% of  organizations don’t have alignment between their business unit and corporate strategies; strategic plans of support units like HR and IT don’t support corporate or business-unit strategic initiatives; and financial budgets aren’t linked to strategic initiatives in 60% of organizations (Kaplan and Norton, 2009). Business units must ensure effective and regular communication during the development, release, and prioritization during strategy development.  B|G recommends business units develop scorecards that align directly to enterprise scorecards and better understand the priorities of other units through the presentation of unit-level scorecards in forums with leaders. Organizations that understand dependencies, resource needs, and the required support from other units will see effective coordination.

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4. Monitor

A strategy isn’t a document that is developed by leadership over a series of meetings and briefly each quarter. A strategy is a guiding compass that positions an organization to effectively compete in their markets, requiring constant monitoring. Organizations fail to properly review and monitor their developed strategy. A recent study found 70% of leaders spend a single day reviewing their strategies each month while 85% of leadership teams spend less than an hour discussing strategy (Carucci, 2017). These organizations are failing to leverage learnings that come from regularly reviewing a strategy, constantly uncovering more insights regarding their external environment based on how strategy is executing. B|G has found organizations learn more about themselves and their environment during the release and execution of strategy, all of which can be gathered for future development and adaptation.

5. Adapt

“This very moment is the slowest pace of change you will experience in the rest of your life” - Lippincott, The Innovator’s Playground. All too often, organizations spend great amounts of time developing an all-encompassing strategy only to realize that elements of their strategy are now ineffective due to changing market conditions. Organizations must be aware of their rapid change worlds while developing strategy and ensure that the organization is prepared and willing to adjust and adapt their strategy to effectively compete among competitors. Organizations that practice continuous improvement while developing strategy can easily adjust the objectives and initiatives that were set if so needed.

A famous example of an organization that effectively pivoted their strategy is found with Netflix’s pursuit of a digital description service in the late 2000s. Understanding a shifting technology and social factors, Netflix shifted to downloaded multimedia and ultimately streamable media to customers. Netflix pursues a completely different delivery channel, but still acted in alignment with their core purpose, which is to “promise our customers stellar service, our suppliers a valuable partner, our investors the prospects of sustained profitable growth, and our employees the allure of huge impact.”

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6. Develop

Organizations that implement a successful are delivering great deals of a change to their people. Leaders from all levels of the organization take on new projects, own the success of key KPIs, and are required to lead their people in a more inspirational and transformational way. Organizations that support leaders to lead and make decisions through change support the success of strategy execution and support future success as the world becomes even more volatile and complex. Organizations with strong leadership development programs see nine percent greater returns and cultures that those that encourage risk-taking are five times more likely to anticipate change.

Developing leaders is no easy task. A majority of leaders are don’t know where to support their people:  "50% of execs hadn’t fully considered their team’s sentiment about the change. Worse, about half said they were just approaching the change ‘going on gut.’” (HBR) Oftentimes, organizations release a strategy with an understanding that their teams have all of the current capabilities needed to execute the strategy. (Abbatiello, 2017).

B|G recommends organizations invest in the development of key leadership and provide them with the correct training curriculum, coaching, and development experiences for them to continue to adapt, lead through change, and effectively execute strategy.

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7. Persevere

Lastly, organizations require great passions and perseverance to overcome obstacles along the way! The late Steve Jobs is quoted as saying “People with passion can change the world.”  B|G believes organizations that show great passion for successfully incorporating the key ingredients of strategy will be able to positively impact their world. Passion and perseverance can come from leadership at the top throughout the roll out of strategy, but it also takes leaders from across the organization that fully understand the core purpose and subsequent strategic priorities set during strategy development. Organizations that cultivate a shared sense of purpose among employees will see great success in the roll out of their strategy.

Stripe, a payments software company, lends its impressive growth to emphasizing execution, creating a shared vision, and instilling passion among employees. In discussing execution. Robert Collison, Stripe Founder, mentioned: You don’t have a valuable company unless the company continues to execute.” They have placed emphasis on achieving future success as it can be a “very dangerous mode to slip into, becoming rearward-looking, and looking at everything that has happened today because the much more relevant fact is what we release in (in the future)” (Devaney, 2018).

A publication sharing their recent growth praised their passion to succeed: “employees feel invested and motivated to keep making Stripe better, which only serves to contribute to the company’s growth” (Brown, 2019). Stripe seeks leaders that have displayed passion and grit in the past, as shown from a recent job description:  At Stripe, we're looking for people with passion, grit, and integrity. Your skills and passion will stand out—and set you apart—especially if your career has taken some extraordinary twists and turns. Organizations similar to Stripe have aligned their organization to achieve complex problems and change the world.

Strategies inevitably need to adjust, and even pivot, based on changes in the competitive landscape and external environment. Organizations that practice effective communication, prioritize strategic priorities, embrace this change, are biased toward action and find joy in the iterative feedback provided by customers and the market will successfully implement strategy. Organizations that incorporate the four key ingredients of strategy will succeed in providing excellent returns to shareholders and creating a high impact on the lives of customers and community members.

10 Minute Strategy Self-assessment

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Sources

• https://www.smartsheet.com/expert-guide-writing-effective-change-management-plan
• https://hbr.org/2009/01/the-quick-wins-paradox
• https://www.drift.com/blog/stripe-billion-dollar-growth/
• https://hbr.org/2005/10/the-office-of-strategy-management
• https://hbr.org/2015/03/why-strategy-execution-unravelsand-what-to-do-about-it
• https://growthhackers.com/growth-studies/how-stripe-marketed-to-developers-so-effectively
• https://hbr.org/2017/11/executives-fail-to-execute-strategy-because-theyre-too-internally-focused

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