the 3 secrets to successful strategy execution

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The 3 Secrets to Successful Strategy Execution

Paul Docherty- i-nexus

Patrick Pecorilli – Virtual Process

[Introduction]

Paul: Patrick, it’s my pleasure. So I’m just sharing my screen now. Hopefully the participants can see

this when they’re viewing their screens. So first of all, let me say welcome to everybody who’s joined

and to everybody who’ll download and listen to this webinar later. Again, just by way of introduction,

my name is Paul Docherty. As Patrick said, I’m the founder of a business that fundamentally helps

organizations to execute their strategic plans most effectively. What I’m going to do today is give you

an insight into some of the lessons that I’ve learned working with over a hundred different large

organizations in terms of how do you actually get things done. How do you turn your aspirations into

reality? And what are some of the best practices that organizations use to make that happen?

The agenda for today, I’m going to focus on why is execution such an important priority? I’m going to

explain a little bit of the perspective that leaders in organizations have run it and I’m going to try and

unpack for you why it’s difficult and what are some of the challenges that organizations face as they

try to execute their plan. And hopefully I’ll be able to then share three key ideas, three concepts if you

like, or three secrets that if you can apply them successfully in your organization, you will see a

significant improvement in execution follow-through with the percentage of the outcomes that you’re

aiming to achieve that actually get done. And then finally I’m going to pull it all together and

hopefully make a link to Patrick’s business as well in terms of how you can make the improvements

that you deliver or the results that you deliver sustainable. So let’s get started.

So I think it’s fair to say—and I’m sure many of you will recognize this—that if you ask a leader

what’s harder, is it easier to come up with a strategy or is it easier to execute it, they’ll probably say

execution is where their challenge is. In fact, that’s not really a surprise. If you think about all the guys

that go to business school, what do they learn about? They learn about how to craft strategy, all the

different strategic models. They don’t learn a lot about how to drive the execution of strategy.

I think the critical thing that I’ve taken away from all of my experiences is that you can have the best

strategy in the world but if you can’t execute that strategy well, you’ll be outperformed by businesses

with a lot less effective strategies but doing them very much better, you know companies that execute

well. And what I’d like to sort of share some thoughts with is some data—this is not a surprise to

many people in this side I’m sure that execution is challenging. It is quite amazing how poor we

generally are at execution.

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I think one of the reports that was very fascinating to me was that people analysis done by Kaplan and

Norton, the originators of the balanced scorecard. And they looked at over thousands of organizations

and they looked at the aspirations, the goals that they stated publicly about the goals of the next three

to five years. And then came back to those organizations, three to five years later and said what

proportion of those organization were clearly achieved even the majority of their objectives. And the

answer to that question is very few, in fact less than 10%. So it’s kind of amazing to me that if this is

the reality, why isn’t this sort of problem more easily solved?

Well I think if we’re going to look at it a little more deeply, let’s take a view from the perspective of

the senior leaders in organizations. And I guess if you ask the question to CEOs and said,“What do

you care about?” you’d kind of expect the answer to be about the growth or profit or increasing the

revenue of the business or increase the satisfaction of the customers. When in fact, when you ask the

question—andthis is a very well-used survey— in fact it’s a very popular one undertaken by The

Conference Board. They survey the top 500 of the top 5000 global CEOs and they ask them every year

what are your top 10 challenges, what are the things you’re thinking about everyday. And for the last

10 years in a row, the number one challenge has been execution or excellence in execution. In fact in

2010 for example, it wasn’t just the top challenge it was also the second top challenge as well. And

that’s not really a surprise to me.

If you think about everything that happens, all of the outcomes that they need to achieve you know

the reality is most CEOs are making promises. They’re making promises to analysts, to their

customers, to shareholders. They’re making promises everyday about what outcomes that they need

to deliver. And a piece of information that I only recently learned was the average tenure of a global

1000 CEO has dropped by three years in the last five years. That’s incredible. It means that I think it’s

now something like three and a half years where it was over six. So that’s basically an indication that

if you’re not performing and delivering what you promise, there’s not a lot of room to maneuver as a

senior leader of organization. So they’re not a surprise if this is a priority for them. But if you ask them

what it is that they consider to be the challenges, if you try to pack that little bit that make execution

more difficult they tend to point to the following things: poorly communicated strategy, unclear

accountability, roles and responsibilities not being defined and specifically not having a follow-up

process in place. And I think that’s a pretty good diagnosis of some of the sort of top-level challenges.

For over a decade or so we’ve been looking into this problem at the sort of next level of detail. What is

it that organizations need to be able to do very well to execute? When we started to go through it a bit

more detail, it started to become a bit more clear what the real challenge is. So let’s think about all this.

So if you’re filling in the shoes of a CEO and you ask yourself this question, how am I going to execute

my objectives and the most of it is there aren’t many CEOs that you point to and say,“Hey is your

strategy bad?” Most senior leaders would say,“I’ve got a good strategy. My challenge is disseminating

that strategy.” And in fact, if you look at every organization and not just very large ones but also the

small ones as well, there are really fundamentally two processes in those organizations. There’s a

process by which you cascade objectives in the organization and then the process by which you report



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and understand how you’re getting on in executing those.

And just to give you a little bit of personal experience. Before I started i-nexus, I used to work for a

large telecom supplier. And out of a pretty large organization that I had the responsibility for

delivering results from several hundred million of revenue that has delivered on an annual basis,

sorry. And what I felt was my challenge was how do I take my goals and how do I make the rest of

the organization, how do I line them up behind my goals? What I had at my disposal was this sort of

objective process that some people use.

So I would sit in a room with my direct reports and I would set objectives for them and they would

then do appraisals, the performance reviews of their own team. We would cascade the goals out and

one of the things that pretty quickly became apparent to me was that the people at the ground level, if

you like, really didn’t have much understanding when you’re going through that process what my

goals were. In fact, we found that a very small proportion of people actually understood what was

going on. And similarly, when I was reviewing the performance, fundamentally the information I was

getting was really information about the past, what already happened. I was looking at the, if you like,

the financial results of my operation but I had no idea—no in fact I didn’t really know if some things

that I’ve instigated as a change or an action, I didn’t really know if it happened until I didn’t see it in

the result which is no way to run a business, if you like.

If you think about it, the challenge we’ve got is that the goals that we cascade into actions that create

the projects that drive the execution of outcomes, those tend to not be connected. So that it’s very

difficult for me to understand what’s happening in terms of when those projects will be delivered and

ultimately when they’ll move the dials. Remember the dials that I’m being held accountable for

moving. And we would really diagnose three core problems.

We call them firstly, the 10% Problem. The reality that such a small proportion of the organization can

actually articulate not just what the goals of the organization are but how their goals fit to the senior-

level, senior executive’s results. I think this is a very worrying thing. It fundamentally means that a

large proportion of the energy of the organization is not being directed towards the outcomes that you,

as leaders or senior management want to achieve.

The other problem which we’ll go into more detail about is what I would call urgent versus important

problem. Fundamentally, when we’re in day-to-day, we know we need to do certain things because

the report, so when we look at what’s all around us what sometimes what people call the whirlwind,

we get distracted by getting things out the door. And we’re always trying to say to ourselves, I just

made some time doing that but we find ourselves constantly pulled into things that have to be done

today just to turn the handle of the business.

And finally the problem we observe is what we call the Rearview Mirror Problem. It’s this problem is

a really only being able to look backwards not forwards. It’s very difficult to understand in any

organization because we don’t close the loop. What is it that we have in front of us? What’s the impact

of all of our in-flight projects when we deliver the changes we need to deliver the results that we’ve

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promised to our shareholders or to analysts etcetera?

So if you think about it, the fundamental things that we’ve got to deal with when we execute is

making sure that we achieve alignment and accountability. We translate the goals into something

meaningful and we know who’s going to be responsible for delivering those goals. Being able to keep

the focus, keep the alignment and the focus while we’re in that whirlwind and being able to look

forward not just backwards. To actually understand if what we have in play is going to get us where

we want to be.

So if we think about it, there’s a lot of evidence. I showed you some of the evidence about challenges

with execution. Some of these other evidence is showing that this is definitely the case. I mean a very

small proportion of employees even see the company’s strategic plan. Never mind understanding

what are the relationship of their goals to the organization’s goals. Is it any wonder then that

organizations struggle to execute? So if you think about this, I think that that’s part of the problem.

Another part of the problem is how organizations actually do this process and how they allocate

resources. This is a little bit of a hundred thousand foot view of the same process such as discussed.

Every organization that I’ve ever worked with the senior leadership take time out, contemplate an

angle and think about the goals of their organization should be, the strategy etcetera, and that

typically results in a set of PowerPoint decks and other kind of things that are documenting this. But

it’s very poorly-defined. It’s not crisply articulated. And then you get into that process as I’ve

described before this ad hoc cascades where they sort of perform goal-setting process typically

administered by the HR organization. Out of which, initiatives fall at all levels of the organization.

And that’s kind of setting one set of priorities for the organization.

On the other side, you get what I call the Budget Dance which is a sort of annual cycle in which the

organization goes through a sort of a process of deciding how resources should be allocated to the

execution of initiatives and projects and other such. And it’s an amazing process which sometimes

makes me fascinated in terms of how game theory works in each organization. I’m sure you get

exposed to it at some point in your career which is you get this process of the top management says

give me your numbers and then as it’s cascaded through the organization, everybody’s building in a

bit of contingency because they know how it’s going to go. And then that’s all rolled up and when you

look at the aggregate view, it’s just way more than people would want to spend. And the numbers

don’t make sense. So then as a kind of really go hard at it and break this down and try to pit that and

get down to a more meaningful number but everybody’s thinking well what if I don’t include this, I’ll

lose it next year.

So it all then rolls back up and this process takes months to happen. And ultimately, in my experience,

it’s disconnected from the process of setting goals. There’s only some sort of loose alignment through

the knowledge of the people at the senior level about the objectives of the organization. But the

initiative allocation in this whole process is highly disorganized. And what results is almost an

impossible challenge for the people trying to execute which is that they may or may not have projects



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that are aligned to the goals of the organization. And more importantly, the resources they need to

execute those are much likely misaligned, as well.

Now, clearly this is a kind of painting a pretty negative picture of why organizations struggle with

execution. It isn’t necessarily the case that organizations have to be like this. In fact, in my experience,

there are some approaches that you can take and are increasingly being adopted across

predominantly western organizations, increasingly some of the eastern organizations as well which

have the opportunity to be a game-changer here. To really sort these issues that organizations have,

really fundamental and not being able to close the loop and to ensure that that’s what cascaded down

is driven to be executed ultimately rolled up to move dials.

I want to give an example of the organization that is a little known but a very, very successful

organization. I think in fact it’s been often coined as one of, if not, one of the most profitable

organizations in the world. And that’s a company called Danaher. The reason I picked out Danaher is

that they’re an example of an organization that’s performed countless acquisitions and has been able

to drive a significant amount of growth and not just in the business itself from hundreds of millions to

multiple billions, in fact tens of billions of revenue but it’s been able to drive an increase in value that’s

outperformed all of its peers.

For example this is showing you the effects of investing a hundred dollars in Danaher stocks in 1990,

what it would have been worth in 2011. In fact, it went up again in 2012 as well. And you can see this

blue line on top represents Danaher. And they have simply not just outperformed all of their peers in

Standard and Poorbut also that the index itself. And the fundamental impression when people see

something like this is how the hell are they doing this. And the answer that… People once called him

the CEO of Danaher points to is firstly it’s about execution and secondly it’s about the way in which

they have developed what they call the Danaher business system. And this Danaher Business System

is a codification of some of the lessons I intend to share with you today. And I think it’s fair to say that

the ideas behind this—there’s no monopoly of good ideas here—but the ideas behind this are well-

understood but they’re not necessarily widely understood. And I think that’s the key. Some of the

concepts I’m going to share with you have been around for a long time. It’s just that the way you can

put them together and the way ultimately that you can make that, you can leverage technology to

help you achieve what Danaher’s achieved, it’s amazing what other possibility is.

So let me first start by sort of introducing you to what I consider to be the sort of three key secrets to

successful execution. The first secret which is surprisingly very unsurprising is staying focused. I

mean, one of the things that I’m sure is increasingly clear to people when they start working in an

organization is people are always busy. There’s fundamentally more stuff to do than you ever have

resources to do. And part of the challenge is that we have this natural temptation to identify more

objectives than we have the ability to execute. And part of being focused is actually deciding what not

to do rather than necessarily deciding what to do. And it’s a natural temptation to identify lots of key

goals because they’re all worthy goals which if you think about it, if you take 10 goals at the senior-

executive level and then you were to cascade those four or five through the organization, a large



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organization, that’s when literally many thousands of goals that they know and actually another

things get created from that.

In our experience, the real key is to pick a few key things to do. Whether you call them breakthrough

goals, three to five year breakthroughs or widely important goals, it’s really important that you

identify a small number of things to do and then make clear what the finish line looks like. I think if

many people particularly those listening from the US will remember in the fifties and sixties, NASA

had a worthy goal. I think it was to be the leader in space exploration or something like that. Some

worthy goal, your vision of things. The only time was when it was really galvanized was when

obviously when the President made a very clear statement, “By the end of this decade, we’re going to

put a man on the moon and bring him successfully back.” This example is well-known. But that’s the

kind of goal that makes your finish line crystal clear and it also defines what success means in such a

way that everybody understands what winning means. So if you think about this, staying focused is

really one of the keys to a successful execution.

The second, which has probable come out in the early analysis I shared with you, is closing the loop.

So it’s not just knowing exactly what it is you’re going to do but being able to do understand if you’re

heading in the right direction or whether you need to turn the super tanker. A great analogy that I

often use to talk to people about organizations and strategy is if you’re the captain of a large ship and

that large ship is clearly heading to the rocks, you can’t really make a lot of difference to that if you

find out very late. You’re about to hit the rocks. The only time you can make a difference is when you

can turn the wheel effectively right at the offset, as soon as you know you have a problem and the

time it takes to reel in the ship is significant. So what’s really important is you’ve got to be able to view

planning and execution as an integrated process to be able to understand effectively how those things

when you execute all those projects, how they play together to move the dials.

And then finally, one of the things that’s combating this urgent and important is having a way of

driving relentless follow-up. And I would say that the organizations that are the most successful in

strategy execution are the ones not just that focus and close the loop but the ones that put a heartbeat

into the organization and ensure that there is a regular review of execution progress. And that it’s

something that takes the attention of the senior leaders of the organization. In my experience, unless

that’s in place and unless there’s a way of taking the heavy lifting out of that, it’s very quickly.

Strategy and initiatives they don’t die because somebody decides it’s not important. They die from a

death of a thousand cuts. Everyday some just doesn’t do a little bit more. It doesn’t get more attention.

Eventually, the greater strategies don’t happen. And it’s really about keeping the top on mind and

making sure that you’ll be following up relentlessly.

So let’s talk a little bit about this first problem, staying focused. I mentioned earlier that there are two

conflicting forces: The whirlwind and the goals that we’re trying to drive, the whirlwind of the day job.

In my experience, the whirlwind of the day job will always win. Unless you make the judicious

choices about what you’re going to focus on. And one of the things it’s very interesting to me is a lot

of research done by the Franklin Covey Institute around the urgent and important and how much


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time people spent on goals and what percentage of goals they actually achieve. One of the interesting

things is if you aim at doing one to three goals, you’re likely to achieve one to three goals. If you aim

at doing 10+ goals, you’re likely to achieve no goals. And that’s what’s interesting.

So it fundamentally says, if you focus on a few things, you’re more likely to win. But when that

demand is a crucial conversation within the leadership and within the organization as to what’s

important to us. Which in turn, demands that we should crisply articulate our strategy in such a way

that we understand what the big wind spurs would be. In my experience this is difficult. This is

difficult for senior leaders because even back in the days when I used to work, I used to work for a

company called Marconi. They were bought by Ericsson after the collapse of the sort of the telecoms

bubble-bursting in the late 90s, early 2000s and in that time, way before then, I did a lot of the work of

senior leadership team of that organization. I asked a question,“How much of your time are you

spending on tasks that you would consider to be urgent and tasks that you would consider to be

important?” Urgent was defined as day job tasks versus changing the business path which were

important.

And what was fascinating to me was this is a top management of a multi-billion dollar company. And

even the top, top leadership team of a multi-billion dollar company was spending a majority of their

time in what I would call the urgent not important trap which is fascinating. So there has to be a way

to try to focus the organization. You have to have a mechanism because if there’s no structure, if

you’ve got a lot of goals and people are trying to focus on some of those but they’re in the whirlwind,

this is the result.

So the question is what can I do about that? What are the options open to me? Well I’m not here

fundamentally to go into the detail of this but I would offer that there’s a spectrum of different

approaches that organizations use. And with these approaches they can really help. My personal

favorite, if you like, is Hoshin Kanri largely because I think when you do it, it’s a sharp relief, the

focus that you have to have and it drives the discussions in the organization which ultimately arrives

in an achievable plan through a process called Catch-ball planning. We’ll come back later to that in

this presentation. Whether you embrace an approach which is kind of less structured or approach

which is more structured, fundamentally, I recommend strongly that you implement a framework to

help your organization drive a discussion about what the vital goals that you’re trying to achieve are.

Whether the largely important goals or the Franklin Covey 4 disciplines of execution approach or

whether they’re sort of the key strategy map objectives of sort of the balanced scorecard approach or

whether they’re the Hoshin Kanri concept of breakthrough objectives and being able to break that

down either to planning tables or the X-matrix concept, ultimately, the key is that you create clarity

and focus by building a picture of the goals that everybody can understand and being able to then

cascade systematically that through the organization. So I would venture that that’s probably the most

important thing you can take away from this session about staying focused in terms of that.

Let me move forward to closing the loop. In closing the loop, what we’re talking about here is making



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the process of goal definition, translation, execution embedding that into the business operation,

effectively change the business and run the business, linking those two things together. And in this

area, I think that the thing that I would argue is really important is what are we actually trying to do.

And here, I think the key question is how do we bring together things that are typically discreet and

fragmented in organizations?

For example, in an organization today, we define a set of goals and we drive a set of initiatives and we

have a set of indicators that tell us how we’re performing against that. And the real question is how

can we bring it together so that we have a closed loop system to driving the questions related to not

just what are the goals but what are the actions and who’s responsible for those? What’s the impact of

those initiatives? Back to the example I gave where I was responsible for operation. I had no idea what

the impact of the projects were because I couldn’t see it. I couldn’t see that whether those dials were

turning or could turn the dials that I care. So the initiatives were turning or could have turned the

indicators that I care about. And ultimately, are we moving the dials? Are we really understanding

whether our assumptions built into the plan makes sense? And on this area, I will say that the

question is not just are we on track. And if we’re not on track, what are we doing about it which we

tend to look at tools that tell us about to achieve that. But critically the question we need to be able to

answer is in aggregate, will the actions that are underway get us where we want to go?

What I would suggest here is that if you haven’t spent any time on this before, I would strongly

suggest that you take the time to look at Hoshin Planning. I would say that there have been a few key

aha moments in my life when I thought,“Well that’s really interesting when I first learned about, for

example, my post graduate degree analysis or when I first learned about Six Sigma as a concept or

when I first learned about Hoshin planning as a concept. It’s all those things that went, “Why didn’t

somebody tell me about this 20 years ago?” And what I realized when I understood Hoshin planning

is Hoshin planning provides a systematic way of effectively taking your goals and then understanding

what we’re going to try to achieve this year and then deploying that into the organization. Such that

on an on-going basis, on a sort of monthly review basis, you can actually understand whether you’re

moving the dials.

And I would say that one of the key concepts behind Hoshin is bringing the concepts of plan-do-

check-act, that sort of continual review and learning process to the concept of have I moved the dial

when I’m at it. So instead of saying once a year, what’s my target then coming back at the end of the

year and finding out if I have or haven’t it hastened it, therefore, my super tanker’s just hit the rocks.

It’s all about coming earlier in the process, setting a glide path for your targets that you’re trying to

achieve and then checking to see whether your actions that you’ve opened and implemented, whether

they are moving you towards the target. And if they’re not, implementing actions to get yourself back

on track.

In my experience, if you can put in place a goal cascade through the Hoshin process, if you can make

sure that the Catch-ball process which is a concept of ensuring that the team feedback on each idea

and each goal to make sure that it’s realistic as you cascade the process and if you can put in place a


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monthly review using the concept for example of the Bowling Chart which is a tool that’s close to the

Hoshin process that the idea behind the Bowling Chart is being able to see visually, graphically, in a

visual management style way, whether you are tracking towards the targets you set on a month by

month basis or not.

And the key idea is if you can implement a monthly review in your organization that follows up on

the progress towards goals and critically asks the question if we’re not on track and before we walk

into that review we understood what it is that we can do to get back on track effectively the

countermeasure plan, if we can implement discipline around this that’s visible and understood by

senior leaders then you will keep your focus while the whirlwind’s around you. Or at least you have a

better chance of doing that. In my experience in the organization that deploy this goal cascade and

then have this monthly follow-up process in place, they have a significantly greater achievement in

terms of the outcomes that they deliver because if there’s something that isn’t happening they know

about it early enough to get involved and intervene and reallocate the resource that will take the

action to get that plan back on track.

So just to kind of come through this to the last part of the process of the Bowling Chart and the

Countermeasure plan, the final pieces. This all sounds great in theory Paul. But I can see that this

would be very difficult to achieve in my organization because we’d have to get leaders to put in place,

cascade the objectives that sounds like a lot of Excel spreadsheet. Then I’ll have to put in place some

kind of structured reporting process and hold everybody to their feet to the fire on that. That sounds

like a challenging thing to do. In our experience, it is quite challenging to do. And that’s why we

strongly recommend that you have to establish in the organization a time-table. A time-table that

effectively becomes the heartbeat of the organization. So you have time-tables of developing the plan.

And a time-table there for rolling up and reviewing the plan that explains what happens between the

monthly reviews.

You put in place a process to update the previous actuals, to add commentaries, to really understand

and make sure it’s right before you have the review and instigate the action and then roll that forward.

That heartbeat process takes some effort to put in place. In our experience, what makes it really

difficult is that what we’re trying to do in that session is bring together the insight that says what are

the actions we’re implementing, what progress we’re making with those actions and how are we

doing it on the dials that those actions are directly trying to drive. And ultimately, are we seeing the

movement not just on the leading indicators but on the lagging indicators, too.

One of the things that we observed in organizations is that if you look at the process we use to do this,

the process defining goals, cascading them setting objectives, executing the actions and then we

overlay the tools we use to do those processes. So for example, the presentation decks, the

spreadsheets and documents, the various HR tools, the project management tools, the ERP systems

and even the sort of analytical tools or the sort of spreadsheet or whatever you might be using to try to

understand that, the chances of being able to bring all that together and understand exactly how we’re

progressing on an annual basis or even a monthly basis is extraordinarily high. And that’s why we’ve



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seen the emergence of a new type of tool in organizations.

In the same way as ERP emerged to solve the production planning cycle problem and organizations

now can’t imagine what it would be like to run a business without an ERP system. What’s happening

now in i-nexus is that they give you the forefront of this is the emergence of a new breed particularly

of cloud-based software that enables you to link all pieces of the picture together. And ultimately

bring together not just the tools that you might use today for setting goals like HR tools but the tools

you might use to basically drive projects, the tools you might be using to implement that could

measure your performance, the core performance, to putting all these together in a way where they

drive execution collectively of a new type of software where you can actually do exactly what I said

earlier.

You can translate the goals. You can define accountability. You can drive the actions and ultimately,

you can gain the insight. And it’s these kind of tools, the strategy execution software which enables

you to take the head and lift it out of the process. Tools that actually help you define your cascade

whether it’s via X-matrices, the Hoshin concept or simply by a goal cascade in a more sort of

traditional way and run the projects and execute and track the initiatives. And ultimately understand

if they’re moving the dials. And what this software’s capability allows you to do probably most of all

is it allows you to reinforce that heartbeat to put in place a process which essentially ensures that as

you drive month for month the execution of the action, then you can understand that those actions are

actually happening.

In my experience, if you can put in place a process that says to the leaders of the organization, to the

project managers, to the sponsors of the initiatives, to the people who all need results this is where we

are, this is what’s happening and then, hold that process month by month to the delivery of reporting

at each level in the organization, then you can actually ensure that that process can be embedded and

fixed. And ultimately, like I said before, relentless follow through is the key to being able to drive

execution.

So just as a brief sort of summary of what I’ve covered. Clearly, strategy execution is a big problem.

CEOs and organizations have been wrestling these problems for many years. The current approach to

strategy execution, the misalignment of resources to the fact that the processes are not integrated, the

tools are not integrated make strategy execution difficult. But it’s not just a function of having the

right tools and processes. It’s also a function of having people with the right behaviors, having the

discipline to focus on the important versus the urgent. And to achieve that, our experiences with

methodologies and approaches like Hoshin give you a framework to force that clarity, to ensure that

everybody understands what they’re doing and to create the accountability. In my experience, if you

have that, whilst you can look forward and you can course-correct early without the tools set to

basically ensure that it becomes something that you can do without huge amounts of heavy lifting and

something to lock it in place, strategy execution software for example makes that a realistic

proposition. It becomes hard to keep the follow-up. And in my experience and I think that the people

we have spoken to, if you ask them what really matters, it’s all about doing those three things. Staying



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in focus, closing the loop and following up the . . . .

That’s the summary of what I wanted to cover. I’m conscious that I aimed it at 45 minutes for this so I

wanted to pass the mic back to Patrick and say a couple of things just if there’s any questions. And

secondly, if you’d like a copy of the slides or like to learn more about the concepts behind this, then

you can reach out to my colleague Richard Valentine who’s specifically going to be focusing on

providing people with the copies of the slides. Or if you have any questions about the concept of

strategy execution or how it works in practice and you’d like more information about that, I’d be

delighted to talk to you personally. I think, Patrick, that’s the main points I wanted to make in today’s

webinar. Hopefully the attendees find it useful. And I’ll pass it over to you.

Patrick: So thanks a lot, Paul. Really interesting stuff, really appreciate it. We’ll take a few minutes for

some questions, a Q&A session. I started getting questions already so I’ll just… Paul, you mind if I ask

them on behalf of the participants and if you can answer them, that would be appreciated.

Paul: Okay.

Patrick: So a lot of stuff on Hoshin Planning it seems like you hit a nerve with some of our

participants. So you mentioned Hoshin Planning in your presentation. Can you give us some

examples of organizations that are using it? And I’ll put two questions in one. They’re asking if

Virtual Process or i-nexus has methodology in Hoshin planning and so on and so maybe if you can

answer that one, too.

Paul: Yes so I think it’s fair to say that I could speak to a lot of different companies but actually what

I’m going to do as part of the… For those people who want feedback, I recently presented in January

this year in fact at Operational Excellence Conference this sort of Process Excellence Week in Orlando

I think it was. And the question I was asked is how Hoshin planning was evolving. And I put together

a slide together that shows the six or seven companies that focus on those, companies like

[0:43:12.9Powerline] and HP and Xerox, Danaher, etcetera. But then I did a video to show the number

of organizations that we’ve been talking to that have actually started to employ this approach. And

rather than 10 or 20 companies, we’re talking literally hundreds. And I’m very happy to include that

slide. I’ll add it to the slide there, a little extra if you like for anybody who’s interested in

understanding who’s using thosekind of techniques.

But what I also wanted to speak to is the question of is this concept uniquely employed in i-nexus?

Yes I think firstlyto say, as far as i-nexus, we spent a lot of time and energy building the concept of

Hoshin providing support for the form. But I did want to say a little bit about Virtual Process here.

One of the slides that I covered was about closing the loop. You translate goals into action and then

you implement the action but you then have to sustain the game. And the concept in Hoshin is daily

management and being able to run a daily process that ensures that on a day-to-day basis what you’ve

defined as a procedure or as a process sticks. And in my experience, one of the biggest challenges in

that is being able to give an organization a way of specifying how that process operates and then

being able to then use that process specification directly to execute process. And one of the reasons I


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was really pleased to team up with Patrick and the team was that I think the way that Virtual Process

come up with a solution is excellent and it really supports implementing that transition from Hoshin

execution of the change into supporting daily management and making sure that the changes are

actually executed. That’s my perspective on it, Patrick. Anything that I…

Patrick: Oh no, that’s perfectly said. So thanks for the plug in, I appreciate it. Second question, Paul.

We’re currently using the balanced scorecard. Can we leverage this as the starting point to help drive

execution?

Paul: Great question, Patrick. The answer is yes. A number of organizations, I think a number of

organizations that have taken on the balanced scorecard probably using Hoshin as a concept. But one

of the things that the balanced scorecard does, particularly strategy mapping concept is that it gives

you the ability to articulate your goals and understand the logic behind that. I mean the balanced

scorecard basically says if I motivate great people and they execute flawlessly on operational

processes then we’ll get superior customer satisfaction that ultimately leads to great financial results.

And then the reality of that is that that thinking is good. And the identification of objectives is great

but the cascading of the objectives is a challenge. And what the balanced scorecard kind of prescribes

is you just keep developing sub-scorecard. It doesn’t say how and what we found is take your

corporate board balanced scorecard and you distill from it the objectives that really matter it’s a great

starting point for then implement that as the breakthroughs you do through you Hoshin process into

your annual and ultimately into your action level through the Hoshin process. So I think the two

things are complementary and I think the balanced scorecard provides a great starting point.

Patrick: Perfect. So, Paul, I’ll ask another question, I think we’re running a bit over so we’ll make this

our last one. So John is asking, I’m curious how you sustain the strategic improvements after you’ve

made them. Can you share some experience with us or with this?

Paul: That’s a great question. I think it goes back to the earlier question about the daily management. I

mean one of the things that when people talk about the Hoshin Kanri, they often talk about the X-

matrix and the cascading part of that and they almost completely ignore the fact that managing the

operation, the daily management as we call it, is as important to sustain the game. And in fact, what

tends to happen is that you almost separate the planning and the cascading, the goals and the KPIs

which change the business goals from you run the business goals which is more typically the sort of

ongoing quality cost delivery of operational activity.

Now what’s important here in my experience is that you have to charter yourself a set of meaningful

targets of those. But what’s more important is to implement a sort of process control on that. And to

be able to do that, you’ve got to put in place measurement systems in your operation that look at how

much variation is there in your entire process and give you the clues into that. And in my experience

this is all about not just [0:48:01.6inaudible] concepts but applying that idea across all operations

whether they be front-office, back-office, transactional process or whatever. Putting in place that kind

of operational control where you have clear definition of what is to happen and you have the


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boundaries that you expect the process to perform in. I think this applies in financial services, in other

types of industries not just in manufacturing very successfully. Patrick, I’m sure that you have to help

organizations with.

Patrick: Yeah definitely and what I wanted to also mention Paul to some of our guests and so on is

that if anyone is interested in viewing the webinar of our software or contacting Paul and seeing how

his company can help any participants, please don’t be shy. That’s what we’re here for. Paul I wanted

to thank you very much for the presentation today. I think it was extremely, extremely interesting.

And I also would like to tell everyone that a video will be put on YouTube, I’d say within the next

couple of hours. We’ll be sending everyone the video link so if anyone wants to look back and view

the video, we’ll be showing it with everyone. And if you need any information or a copy of the slides,

just contact Paul’s partner, Richard Valentine.

Paul: Valentine.

Patrick: And he shall send that to you also. So thank you very much everyone. Thank you, Paul.

Deeply appreciate it and we shall hopefully speak to some of you in the near future. Take care and

have a good day.

Paul: Take care.