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.

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Did You Just Volunteer for Some Work?0
ronald.lamb posted in Execution of Strategy, Challenges, Resource Management, Relative Importance, Getting Everyone on the Same Page, Improving S2E (Strategy to Execution), Life Lessons & Execution, Strategy on September 7th, 2006

We don’t generally think of corporations and government organizations as volunteer organizations, but stop and think about it. How much of where you allocate your own time is influenced by what you choose to do. Probably more than you’d like to admit. We seek to get on projects that interest us. In that way we are volunteering our time.
As a leader, you’re much more likely to get people to voluntarily contribute their time, skills and money if they can sign up to help achieve a targeted outcome rather than sign up to execute a project.

I’ve recently had the opportunity to speak to, and in some cases work with, the leaders of organizations that rely on volunteers to achieve their strategic goals. They’ve ranged in size from a single leader and advisory board for a professional services community (PSVillage), to a large open source application development group (Wordpress), to the Department of Energy and a number of America’s largest energy firms. In each case we talked about what their goals were and how they were going about achieving them. In most cases they identified a series of projects that they wanted to get done. They also all had limited resources for the size of their targeted objectives. None of them had any way to ensure long-term commitment from participants. It would be huge value to them to be able to increase the level of volunteerism and sustained commitment to the targeted objectives.

Volunteers start with high energy and high estimates of the time and resources they commit to. Lack of progress, frustration and lack of control over their ability to achieve success cause their commitment to wither. As a result execution success is unpredictable. Leaders have to be ever optimistic and to some degree charismatic to continue to attract and retain volunteers. On the other hand, they also have to be realistic and level-headed to continuously deal with the logistics and disappointment of incomplete or missed commitments and execution failure.

What none of them had figured out was how to effectively connect willing contributors with what needs to be done. They had no effective way to connect resources to work, other than through identified projects. This isn’t very different than what occurs in any organization. The only difference is that in traditional organizations, managers direct their people to work. They too had been directed by higher-level managers and their performance objectives. The larger the organization, the more layers are involved. In volunteer or membership based organizations, the link between work and resources is mostly one to one. Each volunteer can decide for themselves where they’d like to participate.

The approaches taken by the organizations I spoke to were each project based. The leaders had defined the projects they felt were necessary. They identified them to their pool of potential volunteers in the hope that they would be taken up by a volunteer or member. I was able to work with the Department of Energy and the energy firms to shift their thinking first to outcomes and only then to projects. They were able to create a roadmap that all understood. There was a renewed commitment to a high-level targeted outcome. They developed a logical process for aligning volunteer activity to the most important interim outcomes. For the others, they will get great value if they can start to identify targeted outcomes and their linkage to higher level targeted outcomes.
This will provide volunteers and their organization with the ability to:

• Understand which are the most important outcomes.
• Choose or influence their participation in the outcomes that they are most attracted to and can achieve.
• Understand how that contribution supports the highest level outcome of the organization.
• Understand wider context through being aware of the surrounding targeted outcomes, and so cooperate on their achievement.
• Use their own skills to design the project / actions necessary to achieve a targeted outcome.
• Provide an opportunity for greater emotional investment and sense of achievement in reaching a targeted outcome.
• Provide sustained commitment, to achieve various projects necessary to achieve a targeted outcome.

For volunteer organizations, corporations, and governments you can increase the success level of execution by getting greater commitment to the most important outcomes and attract sustained participation. These are invaluable in all of these ‘volunteer’ organizations, just like the one you’re in.

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Starting Point: Execution of strategy fails way too often.0
ronald.lamb posted in Execution of Strategy on July 9th, 2006

Enough is enough. My personal experience of execution is that it fails way too often. Organizations are investing in strategies and program management that according to most studies fail more often than not. (More about these studies later)

What must be occurring is that this investment is giving only marginal improvements. This Blog is focused on discussing and creating a store of knowledge and best practices that can provide a step improvement in execution. It is no longer enough to create incremental improvement.

We need executives and program managers to contribute. Strategy to execution takes in all types of participants, from CEO’s to individual contributors. Most new ideas presented through training or literature are aimed at either ‘leaders’ or ‘team members’ but not both. This is a basic flaw and a root cause of failure. We need to understand execution of strategy in the same way regardless of role, seniority, or functional expertise. This Blog will only succeed if all types of participants provide input and challenge ideas.

This Blog is meant to provide you and me an opportunity to raise fresh ideas and seek highly critical points of view on the subject of sustainable step improvements in execution. Welcome to those of you who are distressed at current execution capabilities and are motivated to participate. Goodbye to those of you who don’t see any opportunity to contribute fresh thinking.

I don’t have anything against the training, authors, new practices that are currently popular. It is just that they are mostly aimed at improvement at some sub-level involving the execution of strategy. This approach seems to provide only incremental improvement.

We need a new way to improve the success rate of execution. I believe that can only be done by looking at overall execution of strategy. That is, strategy 2 execution (s2e) as a whole. I will leave it to others to improve the sub-components.

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