"However beautiful the strategy, you should occasionally look at the results."
- Winston Churchill
You've developed an evidence-based future-oriented business strategy. It differentiates you in the market. You've got plans in place, focused and aligned all your resources to achieve it. Job done! Right?
Not quite!
Your job is not over yet.
You see, the real world does not play along. Competitors fight back. Suppliers fail to deliver or change their strategies. Customers change their minds. Unexpected technological breakthroughs disrupt your market. All manner of things can, and probably will, disrupt your strategy.
"No plan survives contact with the enemy."
- Moltke the Elder
Mike Tyson makes the same point - perhaps more colourfully:
"Everybody has a plan until they get punched in the mouth."
- Mike Tyson
As you're executing your strategy, you need to continually be asking yourself two things:
- Has the evidence on which I based my strategy changed? Is it still true? Has new evidence come to light?
- Is my strategy producing the results I thought it would?
This post focuses on the second of those two questions.
If your strategy is not producing the desired results, don't just keep going!
"Insanity is doing the same thing over and over and expecting different results."
- Albert Einstein
Instead, take a step back and ask:
- Why isn't it producing the results?
- What can I do about it?
This may take you right back to the analysis phase of your strategy development. And that may lead you to a revised strategy. But that's not what we're here to talk about now.
We're here to talk about the results themselves.
Specifically about two problems I frequently see:
- Focusing on the effort, not the outcome
- Measuring the data you have
Problem 1: Focusing on the effort, not the outcome
I remember talking through a strategy scorecard with a CEO. He stopped me and asked: "Are you suggesting I measure success in terms of the outcomes achieved rather than the effort my team put in?"
And, of course, that is exactly what I am suggesting.
You may want to consider effort when determining remuneration and promotion. (Probably alongside other factors like demonstration of corporate values, etc.)
But when it comes to strategy execution, the focus should be clearly on outcomes - results.
Results are what attract your customers and keep them coming back. Results are what your shareholders/owners and other stakeholders are after.
Strategy is about achieving results. In the most efficient and effective way.
Here is a hypothetical example I am sure you will all recognise. A business decides it wants to increase customer satisfaction or customer retention or some such outcome. Then it decides that, to do so, it needs to install a new CRM or some such initiative. Six months later, success is declared. The new CRM has been installed on schedule and within budget. (It's a hypothetical example!)
In the midst of the celebration which follows no-one remembers to check whether the outcomes were achieved. Did the new CRM result in increase customer satisfaction or retention? Or did it not?
This is such a pervasive problem that some organisations have established a whole new discipline to counter it. This is often known as Benefits Realisation.
Initiatives may start off with the best intentions. But benefits realisation often falls by the wayside before the initiative completes. Overruns clash with tight schedules and budgets to squeeze it out. New priorities are set. Resources are redeployed. The business moves on.
Problem 2: Measuring the data you have
One of the reasons for this is that collecting the data you need can be expensive.
Data must be collected, validated and analysed.
The effort to do so is often not fully understood or valued.
It is somehow easier to justify the effort and expense of installing a new CRM than it is to justify the expense and effort of measuring the outcomes. And if it is justified initially, it is often one of the first things to get descoped or simply forgotten about as the project schedule and budget tightens.
Investing in measuring the outcomes should be given at least as much priority as investing in the steps you take to improve them. If you don't, you will never know if your strategy is really working or not.
Faced with the expense of collecting, validating and analysis new data, many organisations make the mistake of trying to rely on data they already have. After all, most organisations are already awash with data. (Even if it is poorly managed.)
The problem is that most of this data exists for other purposes. Much or it exists for accounting or regulatory purposes. These are important sources of data. But they're probably not going to help you to track the progress of your strategy.
Strategy is about making choices and differentiating your organisation. Your strategy should be unique to your organisation.
Accounting and regulatory standards are not unique to your organisation. The data and measures they require are not unique to your organisation. So they are unlikely to be relevant to your strategy.
If, when setting out a new strategy, you are told you can track its progress using data the organisation already has available, you should smell a rat.
Your strategy determines what the organisation needs to focus on. Why would your organisation have invested in tracking and outcome before it was deemed to be strategically important?
So a new strategy always requires an investment in new metrics. You should consider the cost of developing those metrics to be an integral part of the cost of executing that strategy.
Furthermore, you should define the metrics to be gathered as part of the development of the strategy.
The scientific method requires us to determine the criteria for success before the experiment is run. This prevents people from post-rationalising their choices. The same is true for strategy.
Conclusion
It is my personal opinion that insufficient focus on results is one of the main reasons so few strategies get successfully executed.
(That's why results tracking, using a strategic scorecard, is built into StratNavApp.com.)
Our current bias towards action ("Just do it") mitigates against our investment in the disciplines which underpin success.
If the desired results are not clearly and unambiguously outlined from the start, alignment suffers. Efforts quickly diverge because it is impossible to know which directions are/aren't producing the better results.
Decision makers kid themselves that they're successfully executing the strategy and that it is working. Without any evidence to confirm or disconfirm it, there is little pressure:
- to try harder,
- to make the tough decisions and trade-offs,
or, perhaps most importantly, - to know and accept when they make a mistake and then correct course.
Good luck!
As always, I would welcome your thoughts and questions in the comments below. And if you need any help of a more specific nature, you can contact me here.
