3 secrets of successful strategy execution

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3 SECRETS OF SUCCESSFUL STRATEGY EXECUTION

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This presentation focuses on overcoming the common obstacles to successful strategy execution. The relevance of Hoshin Kanri is also discussed.

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Page 1: 3 secrets of successful strategy execution

3 SECRETS OF SUCCESSFUL STRATEGY EXECUTION

Page 2: 3 secrets of successful strategy execution

KEY TOPICS

Why is Strategy Execution the #1 CEO Priority?

What Are the 3 Secrets to Executing Well?

2. Close the Loop – View Planning/Execution as an Integrated Process

1. Stay Focused – Reinforce The Right Behaviors

3. Follow-up Relentlessly – Leverage Strategy Execution Software

Why is Strategy Execution Difficult?

Copyright i-nexus 2013. All rights reserved.

Summary/Key “Take-aways”

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Page 3: 3 secrets of successful strategy execution

Good Strategy x Good Execution = Superior Results

• You can beat expectations with good execution of a mediocre strategy

But...

• You can miss expectations with poor execution of a brilliant strategy

Good execution is the critical determinant of superior results

GOOD STRATEGY IS NOT ENOUGH…

Page 4: 3 secrets of successful strategy execution

“70% of companies believe they select the right business strategy, but fail to execute it due to short-comings in their management system” – Accenture Report

“In the majority of cases – we estimate 70% - the problem isn’t bad strategy but … bad execution” – Fortune Magazine

“…only 11% of companies employ a fully fledged strategic control system” – Ashridge Strategic Management Centre

“90% of organisations fail to execute their strategy” – David Norton, Balanced Scorecard Report

“ex-e-cu-tion (ek si kyoo shun), n 1. The missing link. 2. The main reason companies fall short of their promises. 3. The gap between what a company’s leaders want to achieve and the ability of their organisations to deliver it…” – Larry Bossidy and Ram Charan, Execution: The discipline of getting things done

“… over 66% companies with over $500M in revenue set targets that exceeded 9% real growth, yet less than one company in ten achieved this level of success.” – Chris Zook, Havard Business Review

WHILST MANY ORGANISATIONS CRAFT GREAT STRATEGIES, FEW EXCUTE WELL…

Page 5: 3 secrets of successful strategy execution

i-nexus Solves a Big Problem

Execution is the #1 CEO PriorityKey Execution Problems – CEO Perspective

• Poorly Communicated Strategy• Unclear Accountability• Poorly Defined Roles/Responsibilities• Inadequate Execution and Performance

Monitoring

THE CEO PERSPECTIVE…

Page 6: 3 secrets of successful strategy execution

Current Approaches and Tools Simply Don’t Work...

Senior ManagementGoals

Goal CascadeProcess

OperationalManagementGoals/Action Plans

PerformanceReportingProcess

OperationalManagementReview

10% Problem

Rearview MirrorProblem

Execution

Urgent vs. ImportantProblem

Underlying Challenges:

Ensuring Alignment and AccountabilityMaintaining Focus in the Whirlwind

Looking Ahead – Not Behind

THERE ARE SEVERAL UNDERLYING CHALLENGES…

Page 7: 3 secrets of successful strategy execution

Some interesting numbers... Help shine a light on the root causes of poor execution...

“<15% of companies routinely track how they perform over how they thought they were going to perform” Marakon Associates/Economist Intelligence Unit

“95% Employees don’t understand their companies strategy” Kaplan and Norton, Harvard Business Report

“<27% employees have access to their company’s strategic plan” Kaplan and Norton, Harvard Business Report

“86% of executive teams spend less than one hour a month reviewing strategy” Kaplan and Norton, Harvard Business Report

“70% of organisations do not link middle management incentives to strategy” Kaplan and Norton, Harvard Business Report

THE EVIDENCE BACKS-UP THESE HYPOTHESES …

Page 8: 3 secrets of successful strategy execution

•Grow Sales of New Product•Customer Focus•Invest in China•Improve employee satisfaction

The Off-site Strategy Day

Unclear Accountabilities

Poorly DefinedGoals

.ppt deck

The Ivory Tower Exercise

FundingConstraints

Give me your numbers...

I need to includesome contingency...

Way too much!Cut by 25%!

If I don’t include it I’ll lose it...

The Budget Dance

It’s close enough forMilitary work...

Divisional President

Functional Heads

Departmental Heads

Middle Managers

Employees

ProjectProject

Project

The Ad Hoc Cascade

STRATEGY EXECUTION - WHAT HAPPENS IN REALITY…

Projects

Page 9: 3 secrets of successful strategy execution

VALUE OF AN EFFECTIVE EXECUTION SYSTEM -IMPACT OF THE DANAHER BUSINESS SYSTEM

Page 10: 3 secrets of successful strategy execution

3 SECRETS TO SUCCESSFUL EXECUTION…

2. CLOSE THE LOOPLOOK FORWARD, NOT JUST BACKWARD, ON AN REGULAR BASIS

•View planning and execution as an integrated process•Define the leading measures that predict achievement of the goals•Set targets based on expected impact of actions and review progress periodically•Continually test assumptions and act quickly if hypothesis is wrong

1. STAY FOCUSEDFOCUS ON 1-3 BREAKTHROUGH/WILDLY IMPORTANT GOALS ONLY

•Actively decide what not to do, not just what to do•Ensure there is absolute goal clarity – make sure the finish line is clear•Ensure every employee understands what winning means

3. FOLLOW-UP RELENTLESSLYUSE STRATEGY EXECUTION SOFTWARE TO DRIVE RELENTLESS FOLLOW-UP

•Ensure every employee can easily see, understand and update their progress against the plan•Leverage automated exception reporting to reinforce ‘monthly’ heartbeat •Create focus on action by taking the ‘heavy lifting’ out of preparing for execution reviews•Create accountability for results through clarity and transparency

Page 11: 3 secrets of successful strategy execution

STAY FOCUSED – THE CONFLICTING FORCES…

The Whirlwind Goals or The Day Job New Activities

URGENT IMPORTANT

Page 12: 3 secrets of successful strategy execution

IMPORTANT

UR

GE

NT

URGENTNOT

IMPORTANT

URGENTAND

IMPORTANT

NOTURGENT

NOTIMPORTANT

IMPORTANTNOT

URGENT

LOW HIGH

LOW

HIG

H

STAY FOCUSED – AVOID THE URGENT NOT IMPORTANT TRAP

5%

10%70%

15%

Page 13: 3 secrets of successful strategy execution

STAY FOCUSED – CREATING CLARITY AND FOCUS

Less Structure More Structure

LAGGINGMEASURE

From X to Y by When

FranklinCovey 4DX

Wildly Important Goals

LEADINGMEASURE

LEADINGMEASURE

1-2 WIGs

Hoshin Kanri

Planning Tables/X-matrices

2-3 Breakthrough Objectives

Kaplan & Norton BSC

Strategy Maps/BSC

Page 14: 3 secrets of successful strategy execution

CLOSETHE LOOP – CHANGE VS. RUN THE BUSINESS

CHANGE THE BUSINESSRUN THE BUSINESS

Page 15: 3 secrets of successful strategy execution

CLOSED-LOOPSTRATEGY EXECUTION

CYCLE

InitiativesIndicators

Goals

Action

Impact

Insight

Translate Business Goals into Executable Initiatives and Create Clear Accountability for Delivery

Drive and Review Execution of The

Resulting Initiatives

Measure and Forecast the

Impact of Those Initiatives on Performance

CLOSE THE LOOP – WHAT’S THE REAL QUESTION?

1. Are we on track?

2. If we are not on track – are we doing something about it?

3. In aggregate, will the actions underway get us where we want to go?

Page 16: 3 secrets of successful strategy execution

1. Establish Vision

2.Develop 3-5 Year Breakthrough Objectives

3.

4.

5. Implement Annual Objectives

6. Monthly Review

7. Annual Review

P

DC

A

Reflection

Hoshin Process in Concept

Develop Annual Objectives

Deploy Annual Objectives

Catch-ball Planning

CLOSETHE LOOP – HOSHIN AS BEST PRACTICE

Page 17: 3 secrets of successful strategy execution

CLOSETHE LOOP – HOSHIN BOWLING CHARTS/ COUNTERMEASURES

Bowling Chart

Are we likely to hit the future targets?

If not, why not?What’s the root cause and what can we do about it – short and long term? Countermeasure Plan

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WTM FT FTWTM TWTM WWF TM FT FTWTMFT TWTM F TWTM

Monthly Business Execution Review

Meeting

Monthly Business Execution

Review Meeting

Week 4

FT

Week 1

FTWTM

Week 2

TWTM

Week 3

W

Week 4

Month 1 Month 2

WF TM

Make sure its

right

RELENTLESS FOLLOW-UP – ESTABLISHING AN EXECUTION HEART BEAT

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Key Goals for 20XX

(Re)Define Strategic Goals

© i-solutions Global Ltd. 2007

Cascade Goals/

DevelopPlans

Execute the

Actions

Set Personal Objectives/

Develop Action Plans

Run the Operation

HR/Talent Management

System

Spreadsheets/

Documents

Presentation Decks/ Spreadsheets

Review and Analyse

Performance

ERPSystem

BI Tools/Spreadsheets

Project Management Tools/Spreadsheets/E-mail

RELENTLESS FOLLOW-UP - EXISTING PROCESSES AND TOOLS MAKE FOLLOW-UP CHALLENGING….

Page 20: 3 secrets of successful strategy execution

Solving this problem disrupts three big software markets...

RELENTLESS FOLLOW-UP – A NEW BREED OF CLOUD-BASED STRATEGY EXECUTION SOFTWARE IS EMERGING…

STRATEGY EXECUTIONSOFTWARE

PROJECTPORTFOLIO

MANAGEMENT

CORPORATEPERFORMANCEMANAGEMENT

EMPLOYEEPERFORMANCEMANAGEMENT

Size: $1.1Bn/CAGR 9% (IDC)Primary Buyer: Operations• Planning and Execution of

Projects and Programs• Optimisation of Project

Portfolios

Size: $2.2Bn/CAGR 15% (Bersin)Primary Buyer: HR• Management and Automation

of Employee Goal Cascade Process

• Talent Management

Size: $1.9Bn/CAGR 28% (Gartner)

Primary Buyer: Finance• Tracking and Forecasting of

Financial Performance• Tracking of Key Performance

Indicators

“The fundamental problem with traditional performance management software is that it fails to close the loop – it helps you identify the action to take but doesn’t help you understand if the action you have taken has had any effect.”Martin Butler, CEO, Butler Research

“Business Execution software is emerging as the answer to two questions - how are we as an organisation going to do that? And how does it specifically apply to me? Business Execution software brings together people, projects and corporate performance into a single system.”Bruce Richardson, Chief Research Officer, AMR Research

Action

Impact

Insight

Translate Business Goals into Executable Actions and Create

Clear Accountability for Delivery

Drive and Review Execution of Those

Actions

Measure and Forecast the

Impact of Those Actions on

Performance

Page 21: 3 secrets of successful strategy execution

STRATEGYEXECUTIONSOFTWARE

Strategy Execution Software – helps you to:

1. Translate business goals into executable actions;

2. Tie in the people who need to execute those actions;

3. Drive and monitor execution of those actions;

4. Understand if the actions are actually moving, or are likely to move, the dials that measure achievement of business goals.

RELENTLESS FOLLOW-UP – A NEW BREED OF CLOUD-BASED STRATEGY EXECUTION SOFTWARE IS EMERGING…

Page 22: 3 secrets of successful strategy execution

RELENTLESS FOLLOW-UP – THE RIGHT STRATEGY EXECUTION SOFTWARE CAN ACTIVELY DRIVE “FOLLOW-UP”

What Actions Are We Taking and Are We

Doing Enough?

What Actions Are We Taking and Are We

Doing Enough?

Reminder – Time to Focus on the

Important!

Reminder – Time to Focus on the

Important!Are My Team On Track?Are My Team On Track?

Where Do We Need to Focus Our Attention?Where Do We Need to Focus Our Attention?

Page 23: 3 secrets of successful strategy execution

SUMMARY – KEY POINTS

Strategy Execution is the #1 CXO Priority

Success is Function of Right Behaviors, Right Process and Right Tool

The Key is to Look Forward, Not Backward and Course-correct Early

Focus Requires Tough Choices, Catch-ball and Absolute Clarity

Strategy Execution Software Makes Follow-up a Realistic Proposition

Current Fragmented Approach Makes Strategy Execution Difficult

Copyright i-nexus 2013. All rights reserved.

Stay Focused, Close the Loop and Follow-up Relentlessly!

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Page 24: 3 secrets of successful strategy execution

COMPANIES USING HOSHIN TODAY

Page 25: 3 secrets of successful strategy execution

ANY QUESTIONS?

Paul [email protected]

Skype: pauldocherty+44 (0) 7985 117784

For a copy of the slides please contact:[email protected]

Patrick [email protected]

Skype: patrick.pecorilli+1 514-816-0618