Connecting Strategy and Execution

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 my discussion next week is focused on the Technology area, connecting strategy to execution is critical across the organization. Integrated strategy drives execution excellence.

Too many organizations build their strategy in a silo. The strategy is separate from the business lines and supporting organizations required to execute. In many organizations, you’ll find “Strategic Management” offices or “CEO Strategy Board” functions. These teams operate at the highest level of the organization and focus on the macro issue and strategy. They then pass their plans and white papers off to the supporting teams on the assumption that will result in the execution of those plans.

Every year the enterprise strategy team starts again and builds (or modifies) a new strategic plan based on the current state of the organization and the market. Then that “new” strategy is passed down the chain. The problem is that very few organizations have an established feedback loop or ongoing monitoring of the strategic plan. Strategy happens on an annual basis and is forgotten until the next cycle.

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 lines of business and support teams and draws together the strategic priorities for the organization. But it is equally vital for that central function to connect to the teams that will execute on that strategy.

In future posts, I’ll discuss approaches to strategic development which 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.

Integrated Strategy – The Multi-Dimensional Strategy Cube

One concept I use which is very helpful to linking the top level strategy to the individual supporting teams is my “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 regardless of your dimensions, the concept remains the same. The cube allows you to measure the relative strategic priorities of all of the parts of the organization and build an integrated road map.

The exercise may look and seem similar to existing strategic planning processes that you have in place today. There is unique power in integrating and linking all of the individual strategic priorities when you build your strategic plan and execution road map.

Change Management

According to Chip and Dan Heath in their book Switch, successful change is described through a metaphor of leading an elephant and rider. Without any influence, the elephant will continue along the current path and resist change to that path. That 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 current path.

To successfully execute change to the supporting road maps you need to:

1. Direct the Rider
2. Motivate the Elephant
3. 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 the plan. 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 also to understand the reasons for the direction to change their path. In most cases, the rider will understand the strategy, but may not understand the reason for the strategic priorities. Without understanding, the teams will continue on their current path, remaining in their comfort zone.

Motivate the Elephant

This is really where the power of the multi-dimensional cube comes into play. Directives or orders don’t fight organizational inertia; it needs to be altered by understanding. An enterprise strategic plan that doesn’t communicate the reasons for the priorities doesn’t have the power to drive understanding. Without understanding, teams struggle to connect their work to the broader plan.

By building a plan which highlights the balance between organizational priorities at a dimensional level teams are quickly able to see where their work fits. They can see how their work will drive success against the broader plan.

Shape the Path

Rewards and feedback typically drive this component of the change 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. Also, you need to build an 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. Setting incentives to the rider and the elephant is difficult without them. It is hard to measure progress and hard to reward progress when there metrics for 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. It also aligns those metrics to the appropriate supporting teams so that they can be rewarded for execution.

Execution

Changing the approach to strategic planning in an organization, unfortunately, isn’t as easy as “flipping a switch”. Enterprise strategy is typically driven from the top down and is one of the established processes in a larger organization. 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:

1. Direct the Rider

   Sit down with the key stakeholder or executive sponsor for the strategic planning process in your organization and ask some key questions.

   • 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 seeking. If as an organization you aren’t sure how you measure success then you have created a platform for a change.Once you’ve opened up the door to change with the rider, the next step is to introduce the concept of the cube. You should tailor it to your own business and market to show them there is a different way.

2. Motivate the Elephant
   
   Thankfully this one isn’t as hard as getting the buy in of the executive teams. In most cases, the business units and support teams are frustrated with the strategic planning process already. They will be very open to hearing about new ideas. It is critical to ensure the story of the dimensions and the cube highlights the benefits to their areas. Specifically highlight their own strategic priorities, the ability to identify common priorities between groups, and the ability to link their strategies to the overall organization.
   

3. Shape the Path

   This is where you’ll need to rely heavily on executive sponsor buy in and support. To effectively make the change, you need to set specific targets, develop metrics, and track progress across the organization on an ongoing basis. Don’t skip the measurements. Without them, you’ll quickly revert 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 depending on your organization. I have found the addition of “dimensions” in the 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. Build an integrated strategy to drive success in execution.

Related posts:

Take Chances When Opportunity Strikes Build a Strong Foundation for Innovation Building a Full Stack Strategy Be Willing to Change – Change is Power