Focus on the results

"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:

1. Has the evidence on which I based my strategy changed? Is it still true? Has new evidence come to light?
2. 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:

1. Focusing on the effort, not the outcome
2. 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.

5 critical success factors for strategy execution

Many strategies fail in execution. These critical success factors will ensure that your strategy is not one of them.

1. An Integrated Strategy with Clear Goals.

A good strategy describes the why, the what, and the how. These are tied to specific, quantified business outcomes. It is communicated in clear and concise language that everyone in the organisation can understand and relate to.

Most organisations of any size go on to have an IT strategy, and HR strategy, a Marketing strategy, etc.

These should answer the question:

• "How will we use IT, etc. to deliver our strategy?"
  and not:
• "What is the strategy for our IT department?"

This is a subtle but important distinction in achieving alignment.

In the video in this post, Michael Porter argues that strategy must be integrated. Organisations with "an IT strategy, an HR strategy, etc." are less likely to have a strategy at all.

2. Leadership Commitment from CEO Through Middle Management.

Leadership should be both engaged and aligned. There is no room for spectators or armchair critics. This includes the often-overlooked middle-management. Ownership and accountabilities should be clearly defined.

Strategy involves making choices. The best strategies result from choices between many attractive options. But this means the honest people might have preferred different choices.

A good strategy process recognises that there is a time to debate those differences of opinion and a time to align behind the strategic choices that have been made. The two should not be confused. It should be permissible for people to say: "That is not the choice I would have made were it up to me, but I accept and will align with that choice." Leaders who cannot align should choose to leave or be told to do so.

Once leaders are aligned, they should use every opportunity available to show this through their words and actions.

3. Deploy the right resources.

Inevitably, a new strategy requires an organisation to do things it had not been doing before.

This requires employees to demonstrate new capabilities and skills. Often times, employees won't have those skills. Or their capabilities in that area may be underdeveloped or even rusty.

To be successful, an organisation must either train its existing people in those capabilities and skills, or bring new people in who already have them.

Unfortunately, in some circumstances, the organisation will have to let people go if they are unable or unwilling to change. Although difficult, that may be for the best. No-one wants to be a square peg in a round hole. Organisations doing so should do so with dignity and support. Those that remain will judge the organisation based on how it treated those that left.

4. Adopt an Agile Mindset.

There are still instances where old-fashioned waterfall management of large programmes remains the only option. But they are becoming fewer and further between.

In all other instances, an agile mindset will fare better.

• Break changes down into their smallest possible components. Sequences and deliver them incrementally.
• Identify and address roadblocks quickly.
• Accept that not everything will go to plan and not all changes will be successful.
• Learn lessons from each success and failure and feed these back into the process.
• Prepare to undo unsuccessfully steps. This will reduce the costs of failure relative to the benefits of the lessons learned.
• Make adjustments to the plan on an ongoing basis. It is not cast in stone.

5. Monitor Progress Towards Outcomes.

It's easy to get swept up in the doing - the execution. However, it is important the organisation tracks not only:

1. Is it doing what it set out to do?
   but also
2. Is it achieving the outcomes it set out to achieve?

Of the two, the latter is by far the more important. And the more often overlooked. It also requires that your strategy was expressed with clear goals in the first place. (See success factor 1 above.)

Progress should be tracked monthly, if not weekly, and reported widely. It should be objective and transparent.

Inevitably, generating, recording, processing, analysing and reporting the data used for such KPIs will take some work. This work should be considered to be at least as important as the work to deliver the strategy itself.

If you're struggling with any of these critical success factors, please contact me for a free no-obligation consultation.

What is strategy development and execution?

People argue about which is more important: strategy or execution. This is a false dichotomy. Both are important. In fact, each is worthless without the other.

In strategy, development and execution are opposite sides of the same coin.

Defining strategy development and strategy execution

Strategy development is the process of deciding and agreeing what an organisation will do, when, for whom, how, and why.

Strategy execution is the process of allocating resources, changing and aligning the organisation to deliver that strategy.

The problem with strategy development without execution

The problem with strategy development without execution is fairly obvious. Without execution, your strategy will never be more than an aspiration. Nothing will change.

Unfortunately, this is exactly what happens with many strategies. The leadership develops a new strategy and announces it to the rest of the organisation and then... not much happens.

A popular remedy for this problem is to try and involve more people in developing the strategy in the first place. Whilst this can help, it is usually not enough. Sometimes, it can make matters worse. People, be they staff, customers, suppliers or others, can be great sources of insight. But someone still has to process that insight. Strategy is about making choices and trade-offs. It should not be an attempt to give everyone what they want.

Instead, strategy execution requires rigour and discipline:

• Communicate clearly and unequivocally. It should include not only what the strategy is, but why it is that. It is important to distinguish between when you are asking people for their input, and when you are communicating a new strategy to them.
• Establish accountabilities, track and report against carefully thought out milestones, scorecards and KPIs.
• Allocate resources. More often than not, this means re-allocating from what is now relatively less important to what is now relatively more important. Change structures and reporting lines accordingly. Terminate or redirect programmes which no longer fit.

All of this can be very uncomfortable. Strategy involves change. Many people resist change - especially where it challenges their existing power base.

The problem with strategy execution without development

The problem with strategy execution without development is more subtle.

If you haven't developed a strategy, what will you execute? Unfortunately, this does not seem to stop many organisations. The result is 'busy work'. People pursue their pet projects just because they can. Or they deploy resources to do things just because they worry that those resources will be taken away from them if they're not seen to use them.

Even more subtle is the problem of strategies which are not executable.

Some so-called strategies are little more than grand slogans, woolly ambitions or jargon-packed corporate double-speak.

When asked to execute them, staff don't know what they're actually supposed to do. What should change?

And so they play it safe. They carry on doing what they were doing before. Or they use the opportunity to pursue their pet projects.

If they are smart they will rebadge their existing work or pet projects as being central to the execution of the strategy. And because no-one can say for sure what the strategy dictates instead, it can be hard to contradict them.

How can you overcome these problems?

To overcome these problems:

• Make sure that your strategy articulates clear choices. It is as important to say what the strategy is not as to say what it is. You haven't really done strategy until you've decided not to do something.
  
  
• Avoid unqualified comparative statements. As a general rule, avoid words like "best", "leading" and "world-class".
  
  For example, a company might say it wants to be "the worlds best widget manufacturer". That is a fine ambition. But what does it mean? What, specifically, constitutes best? How will this be achieved?
  
  
• Describe as vividly as you can how the organisation will be different after executing the strategy than it was before.
  
  Focus on tangibles - changes to processes, resources, products and services - rather than intangibles. Focus on what you will do differently, rather than on what you will become by doing it. (What you will become is also important. But you won't become it unless you do something. So focus on that.)
  
  For example, a company might say its strategy is "to become the most trusted widget manufacturer". Again, that is a fine ambition. But what will the company do to achieve that?
  
  
• Avoid sitting on the fence or delegating your strategy.
  
  For example, a company might say its strategy is to be customer-centric or to listen to its customers and what they need. Those are both noble ambitions, but they are not strategy. Strategy describes the choices you make after having listened to your customers, understood their needs, and decided what you will and won't do about them.
  
  The same goes for equivalent statements like "putting staff at the heart of our business".
  
  
• Use tried and tested tools like StratNavApp.com for developing and executing your strategy.
  
  StratNavApp.com contains all the tools you will need. They're integrated, collaborative, online and available everywhere all the time. So it will help you do the heavy lifting of incorporating inputs, processing them, generating strategy output, allocating accountabilities and responsibilities and tracking progress.
  
  You can, of course, try and do all of this on your own. But why would you, since the tools exist. It'd be like hammering in a nail with your fist because you didn't want to use a hammer.

Strategy development and execution are equally important parts of a holistic process. It is as important to develop strategies that are executable as it is to ensure that what is executed is the strategy.

The most popular posts on strategy development and execution in 2018

Happy New Year to you all!

At the end of another year - where does the time go - I took time to reflect on the most popular posts on the Strategic Coffee blog during 2018.

Here they are:

10. What is a SWOT Analysis

Love it or loathe it, the humble SWOT analysis remains one of the most popular frameworks in the book, coming in in a respectable 10th place. See also 11 techniques to help you do a better SWOT analysis and The consistently popular SWOT analysis.

9. McKinsey 7S Case Study

This is the only case study we've ever blogged. Client confidentiality usually prevents us from writing case studies, but this one was kindly submitted by a reader. Perhaps you have another you'd like to share with us?

8. The BCG Matrix

The BCG Matrix is a portfolio analysis tool which can help you decide which subsidiary business, product or service lines you should invest in, hold or dispose of.

7. Harvey Balls Font

Harvey Balls, sometimes called Booz Balls, are those little circles with 1, 2, 3, 4 or no segments coloured in. They are useful for indicating high/medium/low, or degrees of strength without being as specific as using numbers would suggest. This post provides a link to a font you can install to make them incredibly easy to use in, say, Word, Powerpoint or even Excel.

6. How to use Porter's Value Chain Analysis

At one time, I thought Porter's Value Chain had fallen from favour, replaced by more modern alternatives such as the Business Model Canvas. This post's position on this list suggests otherwise.

5. How to use a RAID log

A RAID log is a staple tool in project management. Here, we adapt it for use as a strategic management tool.

4. Using the McKinsey 7S Framework to assess strategic alignment, strengths and weaknesses

The McKinsey 7S analysis makes a second appearance on this list in position 4. This time, it is a more conventional post explaining how to use it.

3. How to draw a Strategy Canvas in 4 easy steps

The Strategy Canvas, popularised in Blue Ocean Strategy, is a visual tool for differentiating your proposition to set it aside from the competition.

2. How to design a Target Operating Model (TOM)

In an environment where businesses must increasingly compete not just on what they deliver (products and services) but also on how they deliver, Target Operating Models are a key consideration for strategy execution. 

1. 9 essential tools for Strategy Analysis

And finally, in the top stop, our ever-popular compendium of the 9 most essential tools for Strategy Analysis. This includes a number of those lower down on this list, plus several more.


In reviewing this list, it strikes me first of all that all of these articles are very practical guides on the basics of how to develop and execute strategy. I think this practical focus is heartening in a subject which can sometimes tend towards the theoretical on the one hand, and the hyperbolic on the other.

Secondly, I notice that many of these articles were written some years ago - albeit that many of them have been updated several times since they were first published.

That may point to the perennial nature of the subject - in a field which is constantly searching for the next big thing, many of the basics of how we do so have not changed terribly much.

But it may also point to the nature of SEO (Search Engine Optimisation). Most of our readers find the blog by searching on Google or Bing and search engines favour content which has been there for a longer time.

Do these posts reflect the kind of content you'd like to read on strategy development and execution? We're constantly looking for new content to keep the blog fresh, so why not let us know what type of content you'd like to see during 2019 by dropping us a note in the comments below? I'd love to hear what you think.