Dive into the crucial world of strategy execution and its impact on your business. Discover the essential components, best practices, and tools for effective strategy execution with our guide.
Effective strategy execution is the key to achieving organizational goals and driving growth. However, executing a strategy can be a complex and challenging process that requires a deep understanding of the fundamentals of strategic management.
According to the Gartner Execution Gap Survey (1), "About 40% of executive leaders say their enterprise accountability and leadership are not aligned on strategy execution."
This data clearly shows that closing the gap between strategy and execution remains challenging.
Successful strategy execution requires a structured approach that aligns all aspects of an organization around a common goal and involves effective communication, robust planning, and diligent implementation.
To succeed in executing a strategy, organizations must adopt a holistic approach focusing on seven key pillars: leadership, communication, alignment, implementation, measurement, agility, and accountability.
These pillars are essential for building a solid foundation that supports effective strategy execution in any organization.
Strategy execution is the process of putting a strategic plan into action to achieve the organization's desired goals. It is a process of translating an organization's strategic objectives into concrete actions to achieve the desired results.
Strategy execution requires a strong understanding of the organization's objectives and the ability to mobilize resources to achieve those objectives. It also requires an understanding of the external environment to understand how the organization's strategy will be affected by external forces.
Strategy execution must also involve monitoring and measuring results to ensure the strategy is implemented as intended. The process can involve implementing changes to processes, procedures, structures, systems, or teams and requires successful communication, collaboration, and engagement across all levels of the organization.
Strategy execution is essential for any organization to ensure the strategic plan is implemented correctly. According to these studies, between 60% and 90% of strategic plans never launch. It shows us the importance of having a proper strategy execution—it is the bridge between high-level planning and its proper implementation.
Without proper execution, the organization’s strategic plan may fail to achieve the desired results. Therefore, organizations need to have a comprehensive strategy execution framework in place to ensure the desired outcomes are achieved.
An effective strategy execution helps organizations remain competitive, increase efficiency, and improve customer experience.
The seven pillars of a successful strategy execution are:
Researching and formulating a strategy before executing it is a fundamental step in this process. It serves as the crucial first pillar in formulating an organization’s long-term goals and objectives. This process involves a comprehensive analysis of the internal and external factors that impact the organization and identifying key opportunities, threats, and challenges.
It is common for organizations to develop data-backed strategies based on market conditions, historical insights, and competitor activity. When formulating your strategy, collect and analyze relevant information to ensure your ideas and goals are aligned with objective data. You could use that information to determine a realistic implementation strategy and address the organization's primary needs.
We are in a period of accelerated change, and the speed of change is currently unprecedented. This necessitates a non-linear approach to strategy creation. Strategy creation is often an iterative process that requires ongoing refinement and adaptation based on changing circumstances and feedback.
During this process, it is crucial that all members of the organization have access to the same information and a clear understanding of the company's strategic goals. This will ensure that everyone is working toward the same goal and that objectives are aligned with the overall vision of the organization.
Business objectives serve as the guiding force that directs the efforts and resources of a company toward achieving specific outcomes. These objectives should be clear, measurable, realistic, and aligned with the overall goals of the company. One approach among many existing to setting these objectives is implementing company-level OKRs (Objectives and Key Results).
With this approach, the organization establishes its strategy and then defines specific objectives that align with and support it. These objectives are typically set for a designated time frame, such as a quarter or a year, and serve as targets to strive for. Establishing regular cadences for monitoring these OKRs is essential to ensure progress and strategic alignment.
For instance, at Businessmap, we conduct strategy reviews to assess the current market landscape and evaluate our performance concerning the key objectives. Clear communication plays a vital role in this process, ensuring that all stakeholders are aware of the objectives, progress, and any necessary adjustments.
By defining clear business objectives, companies can prioritize their activities, allocate resources efficiently, and monitor progress toward their goals. Additionally, well-defined objectives give employees a sense of direction and purpose, fostering motivation and alignment toward shared organizational goals.
In pursuing successful strategy execution, it is essential to recognize the importance of aligning business and functional objectives. While business objectives (company OKRs) outline an organization's overarching goals and aspirations, functional objectives translate those aspirations into actionable plans and initiatives at the team level (team OKRs).
This alignment ensures that every department and individual within the organization works towards shared goals, maximizing efficiency and effectiveness in achieving desired outcomes. By harmonizing company goals with team goals, organizations can foster a cohesive and integrated approach to strategy execution, ultimately driving sustainable success.
In the context of successful strategy execution, visualization plays a crucial role in ensuring alignment between company objectives and functional goals. As discussed previously, it is essential to have a clear understanding of the objectives set by the organization. However, simply stating these objectives may not be enough to ensure effective alignment and regular progress tracking.
By visualizing all company objectives, teams can gain a comprehensive overview of the strategic direction and create a shared understanding of the desired outcomes. This visualization can take various forms, such as Kanban boards, charts, diagrams, or dashboards, which provide a comprehensive overview of the company's objectives, progress, and performance indicators.
Visualization goes beyond words and numbers, providing a tangible representation of the goals. Additionally, regular cadences and check-ins based on these visualizations enable teams to monitor progress, identify misalignments, and promptly make necessary adjustments.
For any successful strategy execution, it is imperative to establish a seamless integration between goals and work progress. By forging this connection, organizations can understand the efficacy of their efforts and swiftly adapt their direction accordingly.
This crucial alignment enables organizations to evaluate whether their work is yielding the desired outcomes tangibly. Moreover, it empowers them to make timely adjustments, ensuring their endeavors remain on track and aligned with their overarching objectives.
By effectively linking goals and work progress, organizations can enhance their agility and responsiveness, ultimately bolstering the overall success of their strategy execution.
To effectively track the attainment of goals and ensure cohesive work, it is crucial to have a central place where all relevant information is visualized and consolidated. This central hub serves as a dashboard for tracking progress (OKR dashboard and OKR tracking), allowing real-time visibility into the status of different initiatives and objectives.
By having a comprehensive overview of the progress, organizations can identify potential bottlenecks, make informed decisions, and take timely action to address deviations from the desired outcomes. Furthermore, this centralized approach to monitoring and measuring progress through work and OKR visualization enables teams to align their efforts, collaborate more effectively, and stay focused on achieving strategic goals.
In the pursuit of successful strategy execution, one of the crucial pillars is the adaptation to a changing environment.
Back in 2001, there was a need for a new approach that could help organizations be more flexible, responsive, and adaptive to changes. Frustrated with how things were, Agile's "founding fathers" came up with the Agile Manifesto based on 12 Agile principles. These principles changed how we manage work and entire portfolios of projects today.
However, successfully adapting to a changing environment requires the establishment of effective cadences across the entire organization, fostering a culture of continuous improvement.
At team level cadences, service delivery reviews and Agile retrospectives enable teams to reflect on their performance, identify areas for improvement, and make necessary adjustments to enhance service delivery.
Similarly, operational reviews across departments facilitate a comprehensive evaluation of operational processes and workflows, ensuring alignment with strategic objectives and identifying opportunities for optimization.
At the executive level, strategy reviews play a pivotal role in assessing the effectiveness of the overall strategy and making informed decisions to steer the organization in the right direction. By implementing these cadences and fostering a feedback-driven approach, organizations can proactively adapt to a changing environment and enhance the ability to execute their strategies successfully.