I will be speaking next week at the Bank-IT Conference on the topic of “Building a Full Stack Strategy: Integrating Strategy from Business Vision to Tech Execution” so I felt that I would share some of my thinking more broadly here. While I’m containing my discussion next week specifically to the Technology area the reality is that connecting strategy to execution is critical (and similar) across the organization.
Too many organizations build their strategy in a silo, completely separated from the business lines and the supporting organizations that are required to execute the strategy. In many organizations you’ll find “Strategic Management” offices or “CEO Strategy Board” functions which operate at the highest level of the organization and focus on the macro issue and strategy and then pass their plans and white papers off to the supporting teams on the assumption that will result in execution of those plans.
Every year that “enterprise” strategy team starts again, builds (or modifies) a new strategic plan based on the current state of the organization and the market, and then that “new” strategy is passed down the chain. The problem I see is that in very few organizations there is an established feedback loop and ongoing monitoring of the strategic plan. It happens on a regular (almost always annual) basis and is forgotten about until the next cycle of strategic planning.
I’m certainly not here to criticize the existence of the central strategy team. In fact I believe that it is a critical component to the entire strategy-to-execution process. It is vital that there is a function that sits above the various lines of business and support teams and draws together the strategic priorities for the organization at the top level but it is equally vital for that central function to be connected to and have the ability to influence the teams that will execute on that strategy.
In future posts I’ll discuss the approaches to strategic development which I believe support this connection and reflect the current state of business (agile, fast-moving, hyper-competitive), but today I want to focus on that connection point.
Multi-Dimensional Strategy Cube
One concept which I have used in the past which I believe is very helpful to linking the top level strategy and vision to the individual supporting teams is the “multi-dimensional strategy cube”. There needs to be a way to look at all the individual strategic priorities of the individual teams, overlay that with the overall strategic priorities of the organization, and then illustrate the integrated priorities back down to the individual teams so they can connect their work to the bigger picture.
The multi-dimensional cube allows you to itemize and categorize each of the strategic priorities across a set of dimensions such as:
- Business Activity (Service Model)
- Organization (Line of Business or Geographical)
- Technology or Business Architecture and Platform
- Customer Segment
- Customer Experience
- Market Differentiation
- Innovation Type (Incremental vs. Disruptive)
The dimensions of the cube need to be relevant to your own business and marketplace, but the concept remains the same regardless of the business: how to measure the relative strategic priorities of all of the parts of the organization in order to build an integrated road map.
The exercise may look and seem similar to existing strategic planning processes that you have in place today, but there is real power in integrating and linking all of the individual strategic priorities when you build your strategic plan and execution road map.
According to Chip and Dan Heath in their book Switch, successful change can be described through a metaphor of leading an elephant and rider. Without any influence the elephant will continue along the current path and resist any change to that path which is what we see in the strategic planning execution in most companies. While there is a strategy developed centrally, it doesn’t link to the priorities of the supporting teams so they have limited reason to change from their own current paths.
In order to successfully execute change to the supporting road maps you need to:
- Direct the Rider
- Motivate the Elephant
- Shape the Path
Direct the Rider
Most strategic planning exercises stop at this step – they hand down the enterprise strategic plan and expect that since the rider is intelligent and rational that they will follow that plan. The reality is that while the assumption that the rider is intelligent and rational is likely correct, the rider is only part of the equation. Their teams (the elephant) need to also understand the reasons for the direction in order to change their path. In most cases the rider will understand the direction of the strategy, but may not completely understand the reason for the strategic priorities, and so the teams (the elephant) will continue on their current path maximizing their own benefits or their own level of comfort in execution.
Motivate the Elephant
This is really where the power of the multi-dimensional cube comes into play. Organizational inertia can’t be fought by directives or orders, it needs to be altered by understanding. An enterprise strategic plan that doesn’t highlight the underlying reasons for specific priorities doesn’t have the power to drive understanding so teams will typically struggle to connect their work to the broader plan.
By building a plan which highlights the balance between overall organizational priorities at a dimensional level teams are quickly able to see where their work supports each dimension and has a much clearer understanding of how their work will drive success against the broader plan.
Shape the Path
This component of the change is typically driven through rewards and feedback to the teams and the rider. As a leader you need to make it easy for both to see the path that they need to follow (in addition to giving them understanding of why it is in the best interests of the organization for them to follow). In a typical enterprise strategy there aren’t any component dimensions so setting motivational incentives to the rider and the elephant to travel the path is difficult. It is hard to measure progress and therefore hard to reward that progress when there isn’t a breakdown of the dimensions of success.
By building the strategy into a set of dimensions it becomes much easier to determine the metrics for success against the plan, and also to align those metrics to the appropriate supporting teams so that they can measure and be rewarded for executing their components of the strategic plan.
Changing the approach to strategic planning in an organization unfortunately isn’t as easy as “flipping a switch”, however. Enterprise strategy is typically driven from the top down and is one of the more established processes in a larger organization. In order to make strategy more valuable and to execute a new approach to this planning cycle it will require senior level support (and the senior level fortitude to follow it through).
I would suggest the following in alignment with the Switch framework:
- Direct the RiderSit down with the key stakeholder or executive sponsor for the strategic planning process in your organization and ask some key questions like:
- How do we currently assess the relative priority of our various strategies across the business and our support teams?
- How do we measure the success of our strategic plan?
- How do we measure the execution of our strategic plan?
- How well have we done in execution of the plan over the past 3-5 years?
There may be some uncomfortable answers that come out of these questions (like “I don’t know”, “I’m not sure”, or “Let me get back to you on that”) but that is exactly the outcome you are looking for. If as an organization you aren’t sure how you measure success or execution then you have created a platform in that executive’s mind for change.
Once you’ve opened up the door to change with the rider the next step is to introduce the concept of the cube and dimensions (preferably tailored to your own business and market) to show them there is a different way.
- Motivate the Elephant
Thankfully this one isn’t as hard as getting the real buy in of the executive teams. In most cases the business units and supporting teams have been frustrated with the strategic planning process for some time so they will be very open to hearing about new ideas.It is critical to make sure that the story of the dimensions and the cube highlight to them the benefits to their individual areas; specifically the power to highlight their own strategic priorities, the ability to identify common strategic priorities between groups, and the ability to link their own strategies to the overall organizational priorities to motivate their own teams.
- Shape the Path
This is where you’ll need to rely heavily on that executive sponsor buy in and support, but in order to effectively make the change you’ll need to set specific targets, develop key metrics, and track and measure progress across the organization on an ongoing basis so you can demonstrate success. Don’t skip the measurements – without them you’ll quickly revert back to the old way of strategic planning (and in the process lose your credibility with the elephant).
There are likely several ways to build an integrated strategy to execution plan depending on your organization, but I have found the addition of “dimensions” into a cube that you can rotate and look at from many different angles to be particularly powerful. Integrating strategy and execution is critical to success in today’s business environment so whatever method you use to tightly tie those components together across your organization you will reap the benefits of having done so.
Tim Empringham, MBA
Tim Empringham is a passionate advocate for Innovation in organizations of all sizes as a mechanism to drive growth, create uncontested market space, create new customer value, and drive efficiency into the internal organization. His focus is on disruption of thinking and markets through integrative thinking, structured Innovation frameworks, and leadership development of Innovation and Change leaders within the organization.