Implementing Strategy – What needs to change in our thinking?
The last seven years has seen a growing interest in not just creating the right strategy but implementing it. A radical school of thought argues that it is more important to execute a strategy than have the right strategy in the first place. Here is recent evidence of this:
Hay Group’s research in 2003 revealed that the key difference between the world’s most admired companies and the others surveyed lies in execution.
An article called “The Secrets of Execution” in Fortune Magazine in 2004 stated that strategy may be important, but the world’s most admired companies simply know how to get things done. (Let’s face it: we know what to do, it’s just that we lose our focus somewhere between thought and action.)
Fortune Magazine also published an article in 2001 stating that companies fail to successfully implement strategy not because of bad strategy but because of bad execution.
Paul Ormerod of The Economist has stated that 10 percent of all companies in the U.S. fail every year—despite the fact that the U.S. has the largest, most successful economy in the history of the world.
A long-term study by Newcastle University (1973-1989) showed that business success is governed more by how well strategies are implemented than how good the strategy is to begin with.
Larry Bossidy, former CEO of Allied Signals, and Ram Charan, management consultant, published Execution: The Discipline of Getting Things Done (Crown Business, 2003). This book launched the field of strategy implementation into the public domain worldwide and brought to managers’ attention the challenges that lie ahead after strategy gets created.
Since the Bossidy/Charan book was published, four others have followed, along with a wave of articles on the topic of strategy implementation. This may not seem like much to shout about, but it does follow a pattern of management breakthroughs. For example, before Six Sigma became a global phenomenon the late 1990s (mainly because GE adopted it), only four books existed on this topic and its creators at Motorola really pushed the concept.
Take a moment to consider which is more important (1) having the right strategy or (2) having the structure and discipline to implement a new strategy in your organization?
For many years, the focus has been on having the first option—the right strategy. But what good is promoting the right strategy if companies cannot execute it and customers do not benefit from it? What good is having the right strategy if it does not add shareholder value?
New Thinking Stresses the Importance of Implementation
Today, a shift is happening in management thinking. Leaders realize that, in the past, the ways they implemented strategy, for the most part, did not work. Despite everyone’s best intentions at the beginning, within 12 months, most strategy implementations had failed. The problem rested in how strategy was executed and how change got managed.
It is time for radical change in our thinking and approach to implementing strategy. Yet this one thought—implementation is more difficult than creating strategy—is probably the most difficult shift in thinking for today’s leaders to comprehend. After all, leaders have been trained to set strategy. In college, they are taught what strategy is and how to set it. Their job is to guide, not to do. As such, they mostly delegate the implementation. And that is why they are paid the big bucks.
But now, leaders need to realize that no matter how good a strategy is, if it is not implemented successfully, then it is not worth the paper it written on.
Don’t Underestimate the Challenges that Lie Ahead
As Bridges Consultancy works with organizations worldwide, we have seen leaders constantly underestimate the implementation challenge they face. Typically, after creating the strategy, they believe that the “hard part” is done. So they tend to sit back, relax and take their foot off the pedal, thinking they can delegate the rest.
Not so. Implementation takes twice as much effort as crafting a strategy. That means if you have taken one year to develop the right strategy, it will likely take you two years to implement it. This is because the job of leadership becomes harder, not easier. Instead of working with a select small group of dedicated people, they must now engage with everyone in the whole organization. Communication must fan out from the strategy team to every group in the organization and leaders must shift from thinking about “what needs to be done” to simply “getting it done.” Then they must invigorate everyone in the organization to join forces and take the right action.
To quote the words of the famous Scottish poet, Robert Burns, in his poem “The best-laid schemes o’ mice an’ men/Gang aft a-gley.” (The best laid plans of mice and men often go awry). It’s a reminder that no matter how carefully a strategy is planned, something may go wrong when implementing it.
Don’t Blame It on People Resisting Change
Despite popular opinion, most people do not resist change. Research has revealed that 20 percent resist, 60 percent will go along with whatever the leadership suggests and the final 20 percent support the change.
How does that break down? The 20 percent who support the change are busy doing what needs to be done. The 60 percent who “go with the flow” keep their heads down and do not want to attract attention to themselves. Therefore the group that leaders hear from most are the 20 percent who complain and resist. This leads to the misperception that most people resist change. In fact, it is only 20 percent who do.
Marcus Buckingham states that any workforce can be divided into these three categories:
people who are engaged (loyal and productive)
those who are not engaged (just putting in time)
those who are actively disengaged (unhappy and spreading discontent).
Buckingham also states, in the U.S., workers are 26 percent engaged, 55 percent not engaged, and 19 percent actively disengaged.
Requires Leaders Going in Multiple Directions at Once
A key reason an implementation frequently fail is that not enough is happening over time. Implementation involves not only rolling out a training program or installing new measures or changing the performance management system. It means combining of all of these plus more, requiring leaders to go in multiple directions at the same time.
Specifically, leaders must pay attention to the following:
While teaching the new skills required delivering a new strategy, they must redesign processes to support the strategy.
While communicating to the staff members what the new strategy is and obtaining buy-in, they must also start identifying and instilling measures to track the new strategy’s success.
While explaining what needs to be done, they must ensure the efforts of those staff members who step up to the plate are being reinforced.
While adjusting everyday social norms such as the way meetings are run or products launches are held, they must review the implementation every two-weeks.
Create a “To-Stop” List, Not Only a “To-Do” List
When the strategy is ready to be rolled out, most leadership teams have a “to-do” list at hand—and only a “to-do” list. Just as important, they must also have a “to- stop” list.
Why? Because by identifying what needs to be stopped, the organization can focus more energy, time and resources on the right action. When changing strategy, certain current behaviors, processes or measures need to be stopped or staff members end up doing more and more work. Even more damaging is that many of the actions typically taken add no value to the new strategy. I suggest that for every item on your “to-do” list, you should put two on your “to-stop” list.
Creating “to-stop” lists is only one of dozens of fresh ideas needed to implement strategy these days. To share your ideas on implementing strategy and your insights on shifting thinking, please email us at bridges@bridgesconsultancy.com.
