The Language of Strategy 2 Execution

Better Execution: Change Your Strategy? [Part 1]0
ronald.lamb posted in Execution of Strategy, Challenges, Performance Improvement, Organization Change, Expectations, Improving S2E (Strategy to Execution), Life Lessons & Execution, Strategy on September 20th, 2006

Rob May of BusinessPundit.com, poses a really interesting question in a Blog posting.

““Does Change Help Link Strategy and Execution?”

He’s curious about how companies can improve the link between the two. The key question he poses is:
By consistently changing your strategy, do employees become more focused on the execution of it? Do changes in strategy lead to better execution?
I’m going to give my response to his interesting question in three parts.

Part 1:

• Too frequent change in strategy hurts execution success.

Part 2:

• Employees don’t become complacent about execution due to infrequent change in strategy.
• You can’t master a strategy.

Part 3:

• A famous Harvard University study, known as the Hawthorne Effect, may actually suggest that you can get better execution if you change strategy often.

Part 1

“By consistently changing your strategy, do employees become more focused on the execution of it? Do changes in strategy lead to better execution?”

This is a great question. It may seem like the answer is straight forward, but there is an interesting wrinkle based on a famous, Harvard University study. I’ll return to this study after reviewing the obvious response. I think most people would immediately answer that changing the strategy frequently will lead to poor execution. Here’s are some reasons why:

1. Uses up key Resources: Creating a coherent strategy is management intensive work. It eats up leadership time and focus. Refinement of a strategy is fine since it supports existing momentum. Changing strategy requires serious analysis, building of the end state and all the efforts necessary to gain agreement, communicate it, and build the plans to achieve it. Execution suffers due to management focus on the strategy rather than execution.
2. Wait and See: Critical work and decisions get delayed during strategy formulation work, as employees “wait and see which way the strategy goes”. “There is no reason to start some critical initiatives if they are associated with the new strategy, is there?” Execution gets delayed.
3. More Project Start-up Time: In many organizations a large majority is project oriented and doesn’t know what the strategy is. What they want is a good definition of the project they’re supposed to accomplish. Changing strategy means changing requirements. Execution suffers as projects associated with the former strategy have to get turned off and project resources released. New projects take time to get started as resources become available. Value isn’t achieved until the project team is providing deliverables that combine with other projects to create value. Execution suffers.
4. Feeling that You’re Delivering Value is Destroyed: Teams like to accomplish their project scope, on-time, on-budget. It’s what they get rewarded for. Changing people’s projects regularly doesn’t let them accomplish much. It is hard to be proud of being part of continuously partially completed projects. Execution suffers as team member’s sense of the value of accomplishment is destroyed.
5. This Too Shall Pass: When strategy changes frequently, it is tough to measure people and the value they are delivering. They start to understand that they’re not measurable. They realize that management has no ‘stick-to-it-ness’. People nod at all the right places when asked to change, but then do nothing. No one will check and they believe any change won’t be sustained anyway. It will go back to business as usual. “This too will pass” becomes the reaction to requests to change.

Part 2 Continues tomorrow.

7 Steps to Eliminate Your Organizations’ Sacred Cows0
ronald.lamb posted in Execution of Strategy, Business Transformation, Challenges, Organization Change, Getting Everyone on the Same Page, Improving S2E (Strategy to Execution), The Language of Strategy to Execution on September 12th, 2006

The University of Michigan, surveyed 308 executives during 2005 on the variables that were most likely to derail their strategy. The variable chosen most frequently, by 38% of the respondents was, was “their Company’s Past / Habits”. That seems to suggest either an unwillingness or lack of a capability to address these habits. In many organizations these are also called the sacred cows or “the elephant in the room that no one wants to talk about’’.

Jim Collins has it right in his best seller “Good to Great”. One of the most important habits for a great company is to “Face the Brutal Facts”. One set of facts that few mature organizations face is the entrenched habits that hold them back from high achievement.

It is absolutely possible to change deeply entrenched organizational habits. I worked with a business unit of a large firm that needed to address this issue head-on. They were given five years to achieve a production target well above their historic ability, or risk being sold. They desperately needed to depart from their past, from the habits that had held them back.
They were going to need everyone’s maximum effort to achieve the target. That meant ensuring that everyone was on the same page, committed to the same objectives. We decided to identify to the whole management team what we believed were the problem habits and how they were directly linked to achieving the targeted outcomes. We then showed the actions we wanted people in the organization to take. In many cases this meant changes to deeply rooted leadership practices. The top leadership team had to lead by example. The process gave license to all of the team to ‘correct’ their peers when they were using behaviors that propped up the old habits.

They also embraced a reporting mechanism that would provide the full organization with visibility on progress. It showed that the leadership was serious about change.

The result was a great success. It was especially rewarding to hear the team formally declare when any of the ‘bad’ habits was sufficiently eliminated. It was then removed as a risk to success on the execution roadmap.

The method can work for any sized organization. To achieve the same result here are seven steps to follow;

1. Identify the habits you’d like to change (free flowing interviews using a trusted third-party works best),
2. Identify the root cause of the habits (to ensure you don’t just end up hiding the symptoms),
3. Put in place outcomes and associated initiatives to remove the cause of those habits.
4. Structure a logical diagram to communicate the links between the main program’s targeted outcomes, the habits you want to remove and the root causes.
5. Put in place a way to track change efforts on the root causes. A modified cause/effect diagram also known as a fishbone diagram works well.
6. Start by coloring the text for all the identified ‘bad’ habits and route-causes in red. When you start working on improving any of them, change the appropriate text colors to orange. When you agree that the cause / or symptom is sufficiently removed, color the text in green. It should also allow you to identify reduction in the visible symptoms that the organization has for so long associated with those habits.
7. This should provide a real sense of accomplishment. Celebrate successes. You should notice fewer grumblings about ‘we’ll never be able to get it done’. It shows the organization;
   • you understand what the barriers are,
   • that they are true impediments to success,
   • that actions are in place and
   • you recognize when there is real improvement.

Feel free to contact me if you’d like further information by using the comment link on this posting.

Current Execution Methods Can’t Deal with Unpredictable Change: Hope is Not a Method0
ronald.lamb posted in Execution of Strategy, Business Transformation, Challenges, Organization Change, Resource Management, Getting Everyone on the Same Page, Improving S2E (Strategy to Execution), Strategy, The Language of Strategy to Execution on August 4th, 2006

Much of the change in organizations seems be unpredictable to those experiencing it. In those cases where you feel that you are the one instigating the change, it feels unpredictable to those experiencing it. The problem is that the methods and tools we use in the execution are just not up to dealing with unpredictable change.

This is what I believe to be true about organizations, processes and execution during times of unpredictable change and what we need to change.

• Processes move strategies, goals, outcomes or projects toward success. Execution processes are unpredictably subject to change from improvement to organization wide business process re-engineering (BPR).
• People within organizational structures are what drive the processes. These organizational structures are subject to unpredictable change.
• Before execution is complete, anything important being executed will be unpredictably affected by unpredictable process and organization change.
• These changes will directly impact team members working on our projects. With no warning, team members will no longer be able to meet their commitments. They will empathize, but won’t be able to help because they have new commitments.
• It is impossible to eliminate the unpredictability of change. Important execution involves individuals from multiple parts of the organization. No one effectively controls all the resources necessary to achieve success.
• Let’s call each uniquely managed part of the organizational hierarchy a ‘silo’. Each part uniquely controlled by another manager is also a ‘silo’. Each silo can make well intentioned changes to their process, roles, or organizational design. The overall organization may also make change to the complete organization. These changes appear to be largely unpredictable to people trying to execute based on the old ways.
• In execution we rely on managers from other silos to meet their commitments to provide;
• Resources for our projects, and
• Completed projects/ deliverables that are part of our project.
• This reliance on others and the knowledge that unpredictable change is the norm means that in most cases, the common execution method is based on Hope. We don’t control other managers’ resources. We don’t know whether they will successfully deliver a completed project for us.

Cultural norms in most organizations don’t permit detailed questioning by peers on how they’re going to achieve their commitments. Hope remains our most common method of execution.

• Hope is not a Method. To move from Hope towards Certainty in execution requires a new method different than what is being used today. People would like to know in advance whether other managers or team members are at risk of being able to deliver on commitments.

Until organizations choose to find a new method to execute strategies that provides full and continuous transparency on how commitments are being met, Hope will continue to be the execution method for most organizations.

The first five requirements for a new strategy 2 execution method are:

1. A way to get everyone on the same page. There needs to be agreement on what is required to achieve the highest-level targeted outcome.
2. Organization-wide transparency on progress towards the achievement interim outcomes regardless which parts of the organization structure are involved.
3. A flexible linkage between execution processes and organization design that allows for continuous change. People in a changing organization may change reporting structure but not their alignment to targeted outcomes. People may change where they are in the organization, but it is the support of targeted outcomes that is their primary work responsibility.
4. Shift to funding of targeted outcomes rather than projects. This allows outcome owners to shift funds between outcomes and their initiatives to ensure the most important initiatives are funded and have the needed resources. Funding of initiatives over outcomes keeps initiatives that have become less important, funded much too long.
5. An on-going assessment of the health of the overall strategy to execution process. The organization needs to have a point of view on the areas of strength and weakness of the current strategy 2 execution process. Within their span of control, managers can create execution process improvements only when taking into consideration the impact on overall strategy 2 execution success.

Note:

1. Execution sometimes takes place where all the resources are controlled by one person. You can assume that success should be higher in such cases. For example, CEO’s tend to control all the resources. Yet, CEO’s report that well over 50% of strategic program fail to meet their expectations.
2. Some people would say that the method is based on Trust, not Hope. I would claim that it’s only Trust if you have worked with that person before and they have established a track record of meeting their commitments. Otherwise Hope is the method.
3. Organizations will change; sometimes to the better (for you) and sometime for the worse. I doubt that any organizational change is good for everyone at the same moment in time.
4. There are many strategies or projects in progress at any one time. It is impossible to plan process or organizational change to eliminate the impact of change for all strategic programs or projects that are ‘inflight’.

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.

Failure to Meet Expectations Has a Major Impact on Success During and From Execution0
ronald.lamb posted in Business Transformation, Challenges, Performance Improvement, Organization Change, Expectations, Qualities of Execution on July 27th, 2006

Skip Reardon at Six Disciplines brings to light a McKinsey survey that sheds new light on what drives a successful transformation in organizational performance.  Respondents  reckoned  that their companies were conspicuously more effective than others at raising expectations about future performance, addressing short-term performance, engaging people at all levels of the organization, including a clear and coordinated program design, and making change visible –through, say, new IT tools or physical surroundings.  McKinsey also claims survey results show that emotions play a leading role in a performance transformation.

There is a strong link between expectations and emotions. (See research below carried out at the University of Colorado). 

I would claim that the right measure for execution success is having met expectations. If you agree with that, then you can see how important emotions are to success. The dark side of this equation is that missed expectations can lead to negative emotions that lead to poor execution. Sounds too theoretical, too academic? If you can’t find a way to improve management of expectations then execution will continue to be perceived as failure on a regular basis.

There are limitless types of performance expectations. Participants in a major change program might all agree on a high-level outcome for organization change /transformation. Even with that agreement performance expectations will vary widely in two unique areas.

• How transformation execution should be optimized during execution and
• What to optimize around for the transformation results achieved from execution

These two areas yield very different types of expectations. Expectations of how execution will be carried out during execution and what the result will be from execution lead transformation team members to very different types of behaviors.

When behaviors are conflicting between team members engaged in achieving the same transformation outcome, sparks fly, failure is the norm and careers can be lost.

Expectations of Performance During Execution
During transformation execution, participants and those funding it can differ wildly on how to optimize. That is, whether the execution of the transformation is proceeding;

• too quickly or slowly (optimized for speed),
• with enough concern for risk factors (optimized for certainty of success),
• in a way that provides visible, measurable progress (optimized to provide clarity and measurability),
• to reduce expenditure of  financial and fixed resources, and management time) (optimized for best use of resources/ low cost)

Conflict During Execution
A number of these from the list above are types of conflicting expectations. One group might be expecting to see the transformation occur as quickly as possible and another group expects it to occurs with as much organizational buy-in as possible. These two “Qualities of Execution” are usually conflicting. Change teams will execute in a way that optimizes one or more of these Qualities of Execution. Someone optimizing execution for speed will execute the same project quite differently than someone who is optimizing for certainty. There are very different behaviors involved in executing for speed versus for certainty. Which is the right behavior for the transformation manager? Someone who crosses all the t’s and dot’s all the i’s (e.g. a process/ details oriented behavior), or a Captain Kirk, a transformation manager who cuts corners, makes bold moves, “goes where no man has gone before”. Such variations in behavior during execution of a major change program lead to conflict and dysfunctional behavior among team members.

Expectations of Performance From Execution:
These same participants in the transformation have their own expectations from execution. Sure, they may all absolutely sign-on for the highest level change outcome, but during transformation, participants and those funding it can differ wildly on what to optimize around. That is, whether the transformation will result in;

• the greatest size of change possible (optimize for the greatest amount of transformation change)
• the change / transformation be long lasting (optimized for sustainability)
• an exceptionally high level of commitment to the change / transformation (optimized for buy-in)
• the change /transformation having the broadest impact (optimized for reach)

Conflict From Execution
A number of these from the list above lead to different and sometimes conflicting expectations.  For example, while working on initiatives to achieve an outcome, you might have team members working to maximize the amount of performance change.  At the same time you might have other team members working on the same outcome but in a way that would achieve it at the lowest cost.  The team behaviors by both groups would be quite different. You can imagine the type of conflict that can occur when there are different expectations for what to optimize on from execution.

Emotions and Performance are Impacted When Expectations Are Not Being Met
When expectations aren’t being met, emotions start to erupt.  The higher a team member’s expectations (e.g. Gee, I really thought we were on the same page here!) the bigger the emotional impact.  According to McKinsey, while respondents reported negative and positive moods in roughly equal proportions, more of the top performers reported experiencing the positive emotions - especially focus and enthusiasm.  It doesn’t take much to figure out that those two emotions can have a major impact on successful execution of any organizational change and transformation.

Here is some research on the connection between emotions and expectations. It is somewhat obvious, but nonetheless supports the research by McKinsey and my contention that you have to manage expectations for successful execution.
Management of Expectation can be accomplished using the “Qualities of Execution” approach.

Olympians’ Emotions Greatly Affected By Prior Expectations Says CU Professor from PhysOrg.com Olympians’ expectations going into the games often affect how thrilling their victories or agonizing their defeats will be, according to a University of Colorado at Boulder professor.

[…]

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.

Only improve a Strategy-to-Execution sub-process if it will improve end-to-end strategy to execution1
ronald.lamb posted in Challenges, Organization Change, Improving S2E (Strategy to Execution), Guiding Principles on July 15th, 2006

We’re all experts at something. If we get hired or promoted to a new role, one of the first things that we do is to look around for what’s broken. We assume that’s our job to fix what’s broken.

The whole concept of accountability is that we’re given an area of control and asked to optimize it for success for the organization. We make the changes to fix or maximize the success in our own area of responsibility. There’s one problem though; very rarely does anyone have responsibility for the success of end-to-end strategy to execution. Did the change any individual made, actually improve the whole process? An expression that I hear is, “Did all boats rise”?

What I find (consulting for many organizations and my own direct experience), is that ‘improving’ a sub-process or the area that we have total control over, breaks the historic links to other parts of the overall strategy to execution process. The change may actually set back the total strategy to execution (S2E) process of the organization. Think of the old game of telephone. You sit in a circle and whisper a message from one person to the next. The person at the end of the circle, the last one to hear the message, says what they heard out loud. It’s usually pretty funny to hear the difference between the final word and the initially whispered word. Think of a strategy being conveyed and executed across an organization and how it gets corrupted as it goes along. Now add the ideas in the game of telephone that one person has decided that they hear better, when they hum at the same time as listening. Now add that another person, decides they whisper better when they’re hopping up and down. Let everyone keep adding their own improvements for listening and whispering and you get my idea. There’s no one saying hold on now, let’s take a look at whether each of these ‘improvements’ are helping us get the right message at the end of the circle.

What is missing is the need to have someone or a group take ownership of a continuously updated point of view of the health of the end to end strategy to execution (S2E) process. If someone wants to ‘improve’ their area, there should be some higher-level understanding and decision as to whether that change will ‘help all boats rise”. Does the change take into consideration the way other parts of the organization interact with the area that wants to create change?

This will be a subject area that I’ll be posting more about over time. I don’t think many organizations have any formal continuous assessment of the quality of their S2E process. If I were a CEO or head of a large organization, I’d want to have an objective understanding of the weakess points in the S2E process and allow improvements to occur there first.