MT ELIZA BUSINESS REVIEW — WINTER / SPRING 2009 Bringing life to the organisation’s strategy Graeme Cocks hy is it that so many strategic plans, even the good ones, fail to live up to expectations? A big part of the answer is simply that it’s often easier to think something up than to put it into practice. Winning organisations know that strategies are pointless unless they’re properly implemented — so they take pains to do just that. STRATEGY FORMULATION IS usually regarded as the exclusive domain of senior management because it, rewards creativity — the most admired and valued of all intellectual pursuits.’ It is where managers aspire to be because of the challenges, rewards and influence that. it brings. By comparison, effective implementation of strategy rarely attracts as much kudos or respect. Yet experienced oxecutives know that the most creative and well-crafted visions and strategic plans are useless if they cannot be translated into action. With executives searching for the next unique strategy in sluggish economies and competitive markets, execution is a key factor that separates successful companies from those that decline.* It may well provide a major source of sustainable competitive advantage.‘ Vision is one thing, but the total organisation also neods ‘feet on the ground’ Implementation is not merely a matter of operationalising the strategy by exercising command ‘over resources, employees and their work. This, Frequently, the ‘approach assumes a causes of breakdown 7 E - 7 logical and in strategy Effective execution calls for unique, creative skills QBN iTS, bor dared ~ leadership, precision, attention to detail, aistinton between capabilities, breaking down complexity and communicating — ‘andits processes an , 7 activities that are clearly and concisely. ena needed to bring the Hs felogntod a strategy to life. ne na subordinate status as the responsibility of ‘middle Effective execution calls for unique and éreative skills including leadership, precision, attention to detail, breaking down complexity into digestible pieces and communicating in clear and concise ways throughout the organisation and to all its stakeholders. Intricate control and feedback mechanisms are also necessary to hone the operations to align with business strategy. ‘These are tasks that are just as intellectually demanding as vision and strategy formulation itself” management’. Here, implementation is seen as more ‘mundane and detailed compared with creating a grand design and vision of the future. Some practitioners argue that, if middle management has control over implementation, they may also have effective control over strategy itself* ‘Suooossfll organisations stay tuned to their external ‘environments and adapt quickly and flexibly byMrs changing their internal processes, systems, competencies, products and services. They implement these changes while continuing to operate efficiently and effectively. Skills for strategy formulation and execution are both important, although itis unusual to find people able to integrate both and become successful general managers. Yet organisational success requires constant review and connection between strategy formulation and execution, with each component feeding and growing off the other in an organic way (see figurel). Figure 1 Linking strategy formulation with execution STRATEGY EXECUTION FORMULATION EXECUTIVE TEAM OPERATIONS Strategy formulation needs input from the operational level to bring reliable insights into organisational capabilities and resource constraints. Further, if the strategic management process consists of the top management only, operational people are less likely to be enthused as they are implementing something that they had no voice in ereating.’ While a tedious process to the fast-moving world of the strategist, this investment pays dividends when the time comes for implementation through early participation and improved communication.” One of the key impediments to strategy execution lies in the shortcomings and challenges of functionally based organisations, where co-operation among many, if not all, functions is necessary. Many creative approaches to this complex problem have been Proposed, such as building a strategy implementation network or a process-centred organisation." However, formal structure is not an important reason for sticcoss in winning organisations in Australia.” Structures in these organisations are constantly changing to cope with new projects starting and old ones concluding. Restructuring is constant. Recent major research'* into some of Australia’s leading organisations found nine common elements for long-term success: effective execution, perfect alignment, adapting rapidly, clear and fuzzy strategy, leadership not leaders, looking out and looking in, Tight people, managing the downside and balancing overything. ‘The findings are represented as a ‘winning IZA BUSINESS REVIEW WINTER / SPRING 2003 wheel’ framework for success that is applicable to organisations of all types from all industry sectors (see figure 2) It shows the central, pivotal role of effective execution that is depicted as both an element of the framework and as representing the outcome of the total framework. The other eloments of the ‘winning whee!’ sre connected to make the wheel work and steer the organisation towards its mission and goals ‘The power of the mode! lies in its integrative approach ~ there is no ‘start’ or ‘finish’ to the wheel. All, elements are important and change in one precipitates change to others. However, itis the organisations’ ability to execute effectively that defines them as winners. They do whet they say and they deliver results, again and again. ‘These characteristies differentiate them from most other organisations that disappoint their stakeholders by failing to deliver what they say, what they promise and what thoy promote and market, Exocution of strategy is an extremely broad and complex issue.” Following are three key drivers that are required for effective implementation: + focused leadership * communication through visible management systems + use of project management techniques. Figure 2 The winning framework for organisations in Australia From The Fist Wing Oeansatans in Asta 2022)MT ELIZA BUSINESS REVIEW - WINTER / SPRING 2003 FOCUSED LEADERSHIP ‘Staying focused is koy to strategy execution. Raffoni* characterises focus as meaning a realistic attitude, simplicity and clarity. Is the strategic plan realistic, given our current resources and workloads? And, most importantly, what will we give up or stop doing to make way for the new strategy? How will we separate customers, asking inclusive questions rather than providing solutions. During execution of strategy, they challenge people with defined objectives and jointly agreed targets, knowing that people normally meet or exceed targets if they are included in setting them in the first place, rather than having them imposed from above. Leaders then give people every chance to from the past? The perform to these strategy neods to bo : : objectives by as simple as possible Staying focused is key to strategy execution. _investing in training to translate its and support contents throughout the organisation. Rather than spreading the total strategy, there comes a point when it is more important to ensure most employees are clear about their role in achioving the eritical 80 per cent than ‘communicating the remaining 20 per cent to everyone." Having identified the ‘vital few’ concepts, it is preferable to focus on drilling deeper into the concepts, repeating the same message and introducing new dimensions from customers and from internal and external benchmarking, Keeping focused means knowing intuitively that answers do not reside in § the plethora of management fads, acronyms and buzzwords that will continue to plague Australian managers, offering hope for the right solution and quick fixes. The danger lies in these fads taking on a level of significance that can transcend the organisational strategy itself. They are merely enablers of strategy execution, useful in their respective ways if they are customieed to the unique needs of each organisation. They become more powerful when they are integrated as a total ‘operational performance model. Otherwise, constantly changing from one fad to another makes people systems. Creating stretch targets might be a way of getting action, but these must be focused on the needs of the customer and marketplace. ‘Australian companies such as Qantas and Woolworths focus on solecting and developing people with the right attitude and values to fit with the culture and strategic intent, rather than just focusing on people with the best technical BM. skills. Their leaders recognise that people, not technologies, provide the only EA) enduring source of creativity, | improvement and change. Organisations such as Telstra and Brambles also know that financial rewards are usually not the only driver for Australians to work, # Working for the ‘cause’ is a key motivator ~ the passion and fieres pride in what their ZF" organisation stands for, other than just financial returns." Focused leaders identify the organisation's ‘cause’ as a way to harness the creative talent of their people. COMMUNICATION THROUGH VI MANAGEMENT SYSTEMS ‘Robust systems are a prerequisite for effective ‘execution of strategy. These include operating, disillusioned with information, the lack of focused decision-making and and consistent Focused leaders identify the organisation’s reward systems. leadership, paneer ‘i Operating aystems eae ‘cause’ as a way to harness the creative talent of represent the heart of the organisation's execution requires focused leaders who hold employees ~ and themselves - accountable for results. Leadership does not mean just having leaders at the top: it’s about. creating leaders throughout the organisation who are able to develop, receive and interpret strategic plans and cascade them in a clear and consistent way for all employees." Focused leaders aiso know when and how to manage upwards, to negotiate resources and provide candid feedback to those involved with strategy formulation, ‘To maintain focus, leaders talk with frontline people working in core processes that add value for their people. ability to implement its strategy. If core processes are not capable of producing and delivering the required produets and services, the organisation will fal to deliver value to customers. Organisations such as GE Capital in Australia constantly measure and flow-chart these processes to reduce variation and identify opportunities for improvement. They use the concent of visible management: to communicate current performance and future strategy to all employees, and ¢0 avoid gaps in perception that lead to ineffective execution. The goal of visible management is to balance detail withMY ELIZA BUSINESS REVIEW - WINTER | SPRING 2003 relevance, then to balance resources and accountability, and to measure actual progress and performance. Visible management systems become pervasive by creating ownership and making the numbers speak for themselves. They tend to remove emotion and allow objective and rational team debate and learning, ‘The call centro at GE Capital is outstanding in its ability to execute its corporate strategy because people assume responsibility for their part of the organisation ‘and the eystems in which they operate. Direct feedback and open communication are used extensively. Achieving results through communication simply adds to the challenge of implementation. GE Capital makes it very clear what The calll centre at GE Capital is outstanding in its ability to execute its corporate strategy because structure, the starting point for most of the project planning tools." A similar approach can be conceived with strategy execution that involves breaking the strategic plan into required activities and definod tasks. Each task has its ‘own objective, consumes resources, has a time line and can be scheduled. Identifying tasks, putting resourees against them and using a GANTT chart to display their chronological order will ensure that the strategy is possible. Identifying task dependencies can be done using a network diagram and locating the critical path that will determine if the implementation plan can be completed on time. Powerful tools such as these offer great potential to assist with strategy execution, yet they are rarely used. people need to ‘ 7 achieve individually people assume responsibility for their part of the g,,,yrat goes he fd in ther teams, : “i tee organisation. accomplish?’ is a key reales hand question for the form of real-time data, such as call waiting times displayed at workstations. People’s performance is measured against their targets with feedback and rewards based on results. Information is made highly visible in the workplace through, the widespread use of charts, scorecards, dashboards and problem-solving tools such as histograms, control charts and cause-and-effect diagrams. People have great incentives to deliver: positive competition, recognition by colleagues and peers, and personal satisfaction from being responsible and achieving results. Team leaders and process owners are able to clarify goals, bridge gaps strategist. The answer to the question, ‘And can it be accomplished?” lies within the project management discipline. If the answer is ‘no’, the organisation must Ri. either improve its operations or change the Ry strstesx ‘The emergence of project } exeeution has seen a growing trend in if Australian organisations towards establishing program management, offices. The purpose of program offices at Packard and Coles Myer is to supply project. management expertise, thus linking all the projeets in the program together and break down. The offi barriers to make containe tas that es eae ae There are powerful tools that offer great potential perform many of the responsible fo eee ist wi project management its ti to assist with strategy execution, yet they are [eperinran st USE OF PROJECT rarely used. scheduling, MANAGEMENT budgeting and risk ‘TECHNIQUES. ‘management. Its Bringing life to the organisational strategy can be ‘viewed as a program made up of a series of related projects, each requiring planning and ellocation of resources to deliver results — to get the job done on time and on budget. These are precisely the challenges faced by project managers who routinely apply a set of powerful tools and techniques in their specialised field of management, They are constantly balancing the constraints of quality, time and costs in their projects. Project managers define their goals, then work back from these goals to plan the project by breaking it into small, discrete tasks. This creates the work breakdown prime role is to put good project management practices in place and support them. It may also be populated with project managers who are available to lead projects throughout the organisation, Project management emphasises the importance of planning as much as it focuses on implementation. The same should be true for stratogy execution. Yet often the emphasis is on action, created by a sense of urgency, rather than formulation of a well-coneeived, realistic and robust plan. Strategies involving incremental change or continuous improvement may not require detailed planning. However, organisationsMT ELIZA BUSINESS REVIEW facing transformational change or major shifts in strategy can ill afford the consequences of poor planning. Effective execution follows effective planning = the project then becomes one of control by tracking progress, feedback, problem-solving and standardisation, WINTER / SPRING 2003, sure the best people with the right skills are allocated to the right johs. If execution is still not proceeding to plan, look at the resources that have heen allocated and whether people have what they need to get the job done* ; ; i : SUMMARY Picad ae 7 Effective execution follows effective planning - This article has planning tools also ; portant become the project the project then becomes one of control by —o mp bang control tools. The tracking progress, feedback, problem solving and _ }ife to stratogy in purpose is to i Anstralian identify variances standardisation. organisations. The from the plan and ey messages are: take immediate corrective action. Similarly, control of strategy implementation requires monitoring of performance, usually through identification of milestones, critical success factors and thresholds.” Effective strategy execution, like project management, needs regular and structured meetings and communication. People issues and resources should head the agenda at review meetings. Assuming the plan is clear and has been communicated, make + recognise that organisational success requires integration of strategy formulation with strategy deployment + identify effective execution as a key element for success * provide focused leadership + create highly visible management systems to ‘communicate widoly and consistently + use project management techniques to deploy the strategic plan. ENDNOTES 1M Raffoni, 2008, Harvard Management Upelate, no UOS02A. M Ralf, op ct. 2M Raton, op cit. ‘WG Egelhoff, 1909, Sion Management Review, Winter, pp 87-60. 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