Category: Strategy Implementation

By M. Dana Baldwin, Senior Consultant

Execution is the key to effective results for Strategic Planning. As Robert S. Kaplan and David P Norton, the authors of The Strategy Focused Organization put it, in the opening paragraph of the first chapter: ‘A study of 275 portfolio managers reported that the ability to execute strategy was more important than the quality of the strategy itself.’ Recognize that this is not blanket permission to have poor strategies, but rather an indictment of the effectiveness of execution by all too many companies.

What are the impediments to effective implementation and execution of strategies for companies? One problem is the lack of buy-in by key personnel in the company. What can cause this lack of buy-in? Starting with the actual planning process, are these people part of the strategic planning team? This can involve either direct or indirect participation. By direct participation, we mean that the particular people are on the planning team, and play a role in developing the course and direction the company is going to pursue. In the case of indirect participation, the people are not on the actual planning team, but are part of the development of the data and ideas on which the planning is based. Indirect participants may participate in developing market segment, competitive evaluations, analyzing technology, supplier market conditions, HR needs, economic projections and reviewing regulations under which the company is working. They may submit, through team members, ideas for new markets, new products, new applications or new investments for the company. Any involvement which includes people outside the actual planning team helps build buy-in and ownership of the process, and will result in more people committed to making the strategic plan successful.

Another problem area can be the lack of follow-through on the part of the senior management team. A senior management that is not truly committed to the strategic plan will not do the simple tasks necessary for the strategic plan to be successful. This usually starts at the very top. The CEO must be completely committed to making the strategic plan successful. Where companies fail to execute the strategic plan, one can usually find a CEO who is not able or willing to give the strategic plan the minimal amount of time it deserves.

A third problem is one of over-commitment. In making commitments to the team, each team member must be realistic about being able to actually perform the steps needed to carry out their parts of the strategies or action plans. When realism hits those who over-commit their available time, what gets hit will be strategic action steps. Strategy execution, at least those parts of it which involve action plans to carry out those necessary activities which do not fall into everyday assignments, falls by the wayside as the urgent drives out the important. It is critical that everyone commits only the time which they can realistically make available to perform the activities required to complete the action plans and to carry out the strategies the team has developed.

In conclusion, companies that seek transforming strategies must have excellent execution. This means that the company must systematically remove all impediments to effective implementation.

The Strategy-focused Organization, by Robert S. Kaplan and David P. Norton. Harvard Business School Press 2001

For more information on how to take your strategic planning to the next level please listen to our webinar: Why Isn’t My Strategic Planning Working?

M. Dana Baldwin is a Senior Consultant with Center for Simplified Strategic Planning, Inc. He can be reached by email at: baldwin@cssp.com

© Copyright 2014 by Center for Simplified Strategic Planning, Inc., Ann Arbor, MI — Reprint permission granted with full attribution.

By Thomas E. Ambler, Senior Consultant

Reprinted from Compass Points January 2008

Balancing internal and external forces that fight one another and create tension is at the very heart of strategic management. One of the most familiar and least pleasurable duties of a CEO is the role of “herding cats” in an effort to bring common direction to a management team whose jobs by nature tug in different directions and compete for common, limited resources. Nowhere is this conflict more pronounced than where short-term organizational health, aka “Execution” or operational effectiveness, inevitably meets up with long-term organizational rejuvenation, aka “Innovation”.

Most companies seek to gain competitive advantage by differentiating their products and services and/or their business model. This occurs through product and process technology innovation (R&D) and value innovation (e.g., finding a “Blue Ocean”¹). If your company is attempting to be highly innovative, you feel the dynamic tension and recognize that your organization is clearly composed of contradictory parts, much like the Duckbilled Platypus.

Here is its description:
“The platypus has a flat, rubbery bill, no teeth and webbed feet–like a duck. Yet it has a furry body and beaver-like tail, and nurses its young like a mammal. It walks with a lizard gait and lays leathery eggs like a reptile. And the male can use venomous hind-leg spurs to strike like a snake.”

Here is a creature that breaks all of the rules of birds, mammals or reptiles. Yet, it functions just fine for what it is intended to be and do. So, how would you characterize your company? Is it like a platypus or does it operate more like a pure bird, mammal or reptile?

Many companies define themselves as purely “bird, mammal or reptile” and win in the short term by tuning themselves to run like a top. They measure everything, benchmark their operation against world-class organizations and have an exceptional “Execution Machine”. Only startup companies define their mission to be strictly Innovation. Most companies, on the other hand, are some combination of Execution Machines and Innovators and have to deal with the “messiness” of two fundamentally incompatible worlds. Typically, the Execution Machine has the upper hand and the company’s Goals (e.g., urgent short-term financial results), means of conveying personal Status and rewards, Structure of power, systems and communication flow, and view and handling of Failure are designed primarily for Execution and not Innovation. This appears to have occurred even within 3M, historically the ultimate example in innovation, through its forced institution of Six Sigma as the centerpiece of corporate culture.

To counter this normal bias toward Execution and avoid treating Innovation as a stepchild, Thomas Kuczmarski² has developed an entire Innovation process, of which the following Creed is a key element:

1. I believe innovative new products and services are integral to my company’s future success.
2. I believe I control the future success of innovation for my company.
3. I believe new-to-the-world products can be our most valued currency.
4. I believe that internal innovation will yield greater returns than equally risky acquisitions.
5. I believe long-term investments in innovation will yield profitable returns if managed correctly.
6. I believe innovation will pay for itself and generate high returns if a balanced new products portfolio is maintained.
7. I believe that the quantity of new products is as important as their quality.
8. I believe new solutions to existing problems will provide big-hit new product opportunities.
9. I believe that I am one of the biggest assets or most impenetrable barriers that can make or break innovation.
10. I believe that an effective innovation mindset can motivate my employees to perform better and be more productive.
11. I believe that the death or success of innovation lies directly in my hands.
12. I believe that measuring return on innovation is as important as measuring return on equity.
13. I believe that failure is an intrinsic component of innovation, and I accept that.
14. I believe that maintaining a positive, proactive, and buoyant attitude about innovation is critical for morale.
15. I believe innovation should be one of my top five priorities and remain on my to-do list.

Check out your beliefs relative to this list. If you can’t say, “yes”, to at least 10 of the beliefs, you are likely a barrier to achieving high levels of innovation. Ideally, the entire top management team will subscribe and live out this creed in a unified manner. But, of course, it is the consistent, sustained, proactive commitment by the CEO that is absolutely crucial for the success of Innovation in all companies.

Short and long-term success of your company is all about balance and trade-offs. Dynamically balancing the tension between Execution and Innovation through wise creation and management of goals, personal status, power structure and handling of failure lead to successful strategy.

References 1. W. Chan Kim and Renee Mauborgne, Blue Ocean Strategy, (Boston: Harvard Business School Press, 2005) 2. Thomas D. Kuczmarski, Innovation: Leadership Strategies for the Competitive Edge, (Lincolnwood, IL: NTC Business Books/American Marketing Association, 1995)

For more information on how to take your strategic planning to the next level please listen to our webinar: Why Isn’t My Strategic Planning Working?

© Copyright 2011 by Center for Simplified Strategic Planning, Inc., Ann Arbor, MI — Reprint permission granted with full attribution.

Tom Ambler is a Senior Consultant with Center for Simplified Strategic Planning, Inc. He can be reached by email at ambler@cssp.com

By Dana Baldwin, Senior Consultant

Why do so many smaller companies have difficulty getting started with strategic planning?  Over 90% of Fortune 500 companies do some form of strategic planning, but only about 25% of small companies do formal strategic planning.  Many companies appear to get by without doing formal planning for some period of time, but in many instances, like some big change in the economy, or in the technology used in the product or service, or used to make the product or perform the service, the upset will derail the small company and can cause a downturn in the fortunes of the entity, possibly resulting in the closure of the business. Strategic Planning is key to being prepared to prosper in the future.

In many ways, not going through formal strategic planning is very short-sighted and limiting.  Without planning, companies can be much more at the mercy of both their competitors and their customers’ whims and actions.

What is needed to actually do strategic planning?

• First is a concise, efficient process, like the Simplified Strategic Planning process.
• Second, most experts in strategic planning recommend an outside facilitator to lead the team through planning. The reasons for this are mostly obvious. A good facilitator will keep the team on track, provide critical leadership, and assure quality and focus.
• Third is a balanced team, representing sales and marketing, operations, finance/accounting and management. The team should number roughly from five to nine people if possible. Certainly, keep the number at no more than 12, for sake of efficiency and effectiveness.

By initiating strategic planning, companies can start to gain more control over their futures.  By planning their course and direction, companies start to take advantage of their strengths, lessen the impacts of their weaknesses and to build on their strategic competency.

We define a strategic competency as a combination of skills, processes and knowledge, which must excel in three tests to a high degree.

• First test is: does this competency add value to customers?
• Second is: does this competency differentiate the company from competition?
• Third: is the competency difficult to copy?

To be a strategic competency, all three questions must each be true to a high degree.  The reason this is so important is that the strategic competency is the major sustainable competitive advantage that allows the company to differentiate itself in the market place.

The team will analyze its markets and competitors, look at financial reports, analyze strengths and weaknesses, make assumptions about future trends, discuss potential new products and services, check threats and discuss strategic issues.

Then they will establish strategies for their core business segments, select what new opportunities to pursue and select objectives to be completed over the next twelve to eighteen months.  They will develop action plans to assure that their objectives will be carried out on time and will set up budgets to track results. This step turns strategic into action.  (alternatively, turns strategy into execution)

Execution is always a key to success, and having the discipline to monitor progress of your strategies and your action plans is the key to good execution.  When strategies and action plans are executed in a planned, monitored manner, the success of the strategic plan is much more likely.

There is nothing in this process which should scare a small to mid-sized business away from starting to plan for its future. The biggest obstacle most often is simply inertia – failure to get started. Excuses are many, but realistically, not one of those reasons is truly acceptable.  Tighten your belt, take a deep breath and get started. You can only gain from starting.  Interested in learning about the Simplified Strategic planning process, a process that is designed for small to mid-sized companies? Please click on seminar and learn about our world-renowned seminar.

M. Dana Baldwin is a Senior Consultant with Center for Simplified Strategic Planning, Inc. and can be reached at .