The Language of Strategy 2 Execution

Bringing Together Financial Measures, Strategy and Execution, Enterprise Architecture and Change Efforts: Targeted Outcomes to the Rescue!0
ronald.lamb posted in Uncategorized, Execution of Strategy, Challenges, Performance Improvement, Getting Everyone on the Same Page, Improving S2E (Strategy to Execution), Measures of Success, Strategy on January 24th, 2010

Lack of Coordinated Effort at the Enterprise Level

I’ve rarely been in a meeting where the following leaders have met to bring about a coordinated effort to synchronize their key performance or financial and operational measures: VP of Finance, Strategy (Enterprise and Business Unit), Operations and Enterprise Architecture. Their perspectives, responsibilities and ability to affect positive change are indispensible but rarely coordinated. It is time to explore the opportunity and the challenges to overcome.

My experience working or consulting to executives within multi-billion revenue organizations is that their enterprise and business unit strategies are so broad and complex that very few people grasp the whole, and few could explain how they integrate. Yet, these organizations explain to Wall Street in terms of revenues and profitability how all these operations work together.

Few people operate at the enterprise level, so this coordinated enterprise story of coordination between finance strategy, execution is usually pretty weak. Often the story is basically a financial one or the power points of various business unit executives pulled together.

Most people work in business units and have their own part of the total strategy to execute. They have to optimize their operations to reach their own financial and other measured goals, regardless of the level of clarity of the enterprise strategy. A common refrain from the top executives on downwards, is “I know what our part of the organization is working on, but I have only a remote understanding of what other groups are doing and how their efforts impact ours.” Add to that, is the fact that most financial measures for organizations are not well aligned to the operational efforts.

What You End Up With Is A Major Gap In Understanding of What Has To Change Operationally To Move The Dial On Enterprise Financial Measures

How then can a large organization create this connection between corporate financial measures and business unit operations?

Creating a Common Language for Strategy to Execution: Targeted Outcomes (Financial, Strategic, Operational, Behavioral etc.)

The one approach that has consistently worked is the decomposition of Targeted Outcomes. These targeted outcomes start as targeted financial outcomes at the highest strategic level. For example, Earnings per Share can be decomposed into the profitability targets for the major strategic focus areas of the business. These in turn can be decomposed into the targeted revenue and cost savings targets within the business units. It is at this stage that you can decompose financial outcomes into all the operational targeted outcomes that are necessary to achieve the financial measures.

Once you have the set of targeted operational outcomes identified, you can add measures to them. That is exactly the type of information that VP’s and Directors need within Business Units to identify the operational efforts, programs and projects that can achieve those higher level operational outcomes.

Once the operational outcomes and associated projects are identified, it becomes just a matter of standard enterprise architecture and project management practice to identify and communicate the areas of change and then the dependency between change projects anywhere within the organization.

This is by design a short point of view based on observation and bringing about successful change. The major take away is that bringing Financial Measures, Strategy and Execution together using Targeted Outcomes Decomposition and Enterprise Architecture can be done. The problem is more often, that these groups and their efforts are still carried out within silo’s.

No Common Governing or Meeting Platform to Bring Together the Right People for the Right Actions

It is the influential executive or bold director/ manager who can bring the right level of awareness to the problem and potential solution. It is tougher still to get the right people in the room to even agree to an enterprise solution.

I’ll be writing more about the promise and value of bring these together and with some suggestions on how to bring it about in the real world of competing agendas, and not enough time.

Challenges to Overcome in Coordinating Finance to Strategy to Execution Efforts at the Enterprise Level

Here are some of the challenges that need to be explored in building coordination in Finance, Strategy, Execution and Enterprise Architecture;

• How to inform each other of the opportunities that we each know exist if we coordinated efforts.
• How to overcome the silo’d way those groups operate.
• What to do, when there is no standing forum for these leaders to come together.
• How to set up a charter for this group, and the measures of success that they can newly influence, and
• How to measure and sustain success.

Challenges execution Execution of Strategy Expectations Getting Everyone on the Same Page Improving S2E (Strategy to Execution) Measures of Success performance improvement silo silos strategy succcessful

The Language of Strategy 2 Execution Blog Manifesto0
ronald.lamb posted in Execution of Strategy, Business Transformation, Challenges, Performance Improvement, Organization Change, Getting Everyone on the Same Page, Expectations, Qualities of Execution, Improving S2E (Strategy to Execution), Guiding Principles, Failure Statistics, Measures of Success, Strategy, The Language of Strategy to Execution on July 29th, 2006

“Strategy 2 Execution” is defined as the single most critical process of an organization. In this context it is not a series of processes that ultimately take you from strategy to execution. This is the overall process. I also use the acronym S2E for it.

I wanted to create a message for first time visitors. It will be kept as a permanent link on the list on the right side of the page. I wanted to set a high bar for what the content was for the Blog. In the following I set out the need for a break-through in successful execution of strategy. I also set out what tests, such a solution has to pass.

Thank you in advance for any way that you contribute to that ‘quest’, whether it is through comments to the postings or by taking advantage of any of the ideas introduced here.

We all have something that is keeping us awake at night. Current capabilities and resources don’t seem to be enough to ensure certainty of successful execution. We have to rely on resources outside our control for our success. Surveys would claim that strategic programs fail well over 50% of the time.

No country or functional group has cornered the market on successful execution. Over the past 30 years I have worked or lived in over 45 countries. I have provided services in management consulting, strategy formulation, business and IT transformations, large program delivery, sales and engineering management. Failure is high everywhere.

A break-through solution that provides a step improvement is needed. Improvement efforts that include book and magazine articles by experts, methodologies, and standards seem to be providing only incremental improvement. They are largely providing high-level leadership ideas or focus on narrowly defined functional areas. We must work on Strategy 2 Execution as a single critical process. There has not been a significant improvement in overall Strategy 2 Execution success in years.

Successful execution is defined as “having met expectations”. We need to be clear about what success is. The bar for what defines success must be set higher than ever. Anything less is an illusion of success.

Here are five tests for a Strategy 2 Execution break-through solution;

1. Improvement is Both Measurable and Intuitively Felt: The definition of success varies widely. What is success for one participant is a failure to another. Measurability is a must but execution is often stopped because sponsors don’t feel that expectations are being met. The solution must address leaders’ intuition as to whether success is being achieved and whether their expectations are being met.
2. It Provides Overall Improvement: Execution improvements in specific functional or process areas sometime occurs at the cost of overall Strategy 2 Execution success. Overall Strategy 2 Execution improvement is what is needed. This will only be achieved by providing a solution that integrates strategy to execution processes with the way people are organized and deployed to work. It must hold overall improvement at a higher value than improvement in a specific area.
3. It is Scalable, for All Types of Execution: We exist in a global, connected world. Any solution must enhance execution across different hierarchies, functional areas, companies, industries, governments and cultures. Major performance improvement will only occur if the solution is scalable starting from individual to multi-party to large scale execution. To be widely adopted, it must be able to be incrementally deployed and serve all types of execution.
4. It Survives Unpredictable Change: Nothing important can be completed anymore before its starting conditions and assumptions change in some significant way. Level of importance, organization design and available resource/ finances will change before execution is complete. Inevitable change is the norm. Strategy 2 Execution must survive this.
5. It Serves Everyone Equally: The solution must be practical, simple to understand and easy to adopt. To be sustainable it must be shared by choice, by all roles, at all levels of the organization. It must serve to get everyone on the same page using a common language that all participants share.

This is the opportunity for leaders of all types to share our passion, curiosity, experience, and simple-to-radical ideas for improving overall Strategy 2 Execution success. Welcome.

Business Transformation Challenges execution Execution of Strategy execution process execution processes expectation Expectations failure Failure Statistics Getting Everyone on the Same Page Guiding Principles hierarchy Improving S2E (Strategy to Execution) language Measures of Success Organization Change organizational change organizational hierarchy performance performance improvement Qualities of Execution silo silos strategy success successful The Language of Strategy to Execution unpredictable change

Execution Failure Statistics and How Success is Defined - It’s worse than I thought0
ronald.lamb posted in Organization Change, Expectations, Improving S2E (Strategy to Execution), Failure Statistics, Measures of Success on July 17th, 2006

I was talking to the V.P. of IT projects for a multi-billion dollar financial services firm. We were talking about strategic project failure figures. We’d both seen studies showing failure rates pretty consistently at over 50%.

He told me that their firm hadn’t had a significant failure in over five years. I was astounded and impressed. After a failure that he placed at close to a $100M write-off, their firm had put in place the most strict procedures and approval gates that I’d ever seen. I suggested that it would be great to create a short case study on how they had managed to achieve such a success rate. To maximize the impact of the case I wanted to include a perspective from their business partners. I asked him whether his business partners would also claim that there had been no significant failures in the past five years. His answer was, “I have no idea”.

Scary, and no he wasn’t pulling my leg. It is still possible to find an organization that is so insular, so full of functional silos that someone at a V.P. level can declare success within their area without any consideration to the over-all success of execution. This organization’s performance measures and complex matrixes reinforce individuals to define success and failure to within only the scope that they control.

This type of corporate culture, this type of organizational thinking is one of the core reasons for execution failure. I first ran into the performance claim of “It’s ok leaving here”, when I was a young customer service representative working in Central America helping get airline communications networks online. The technician at Pan American or KLM or Eastern Airlines headquarters would tell me the data signal was “Ok leaving here” . That was his way of saying “ I have no more responsibility for successful connection between me and where you are”. In other words, his definition of success was strictly defined by what he could control.

This is the first posting for much more on the subject of how success is defined. It will also be a focus around how we are fundamentally organized and measured. We need to work, regardless of the organization structure, to achieve success in execution. I’ll also be soliciting input and links to other studies or examples of failure statistics, how success and failure are measured.

You’ll be seeing more of my recommended solutions for that challenge. Please stay and comment, if this is of particular interest to you.