2. KEY TOPICS
1
Why is Strategy Execution the #1 CEO Priority?
2
Why is Strategy Execution Difficult?
3
What Are the 3 Secrets to Executing Well?
4
1. Stay Focused – Reinforce The Right Behaviors
5
2. Close the Loop – View Planning/Execution as an Integrated Process
6
3. Follow-up Relentlessly – Leverage Strategy Execution Software
7
Summary/Key “Take-aways”
Copyright i-nexus 2013. All rights reserved.
3. GOOD STRATEGY IS NOT ENOUGH…
Good Strategy x Good Execution = Superior Results
Good execution is the critical determinant of superior results
•
You can beat expectations with good execution of a mediocre strategy
But...
•
You can miss expectations with poor execution of a brilliant strategy
4. WHILST MANY ORGANISATIONS CRAFT GREAT
STRATEGIES, FEW EXCUTE WELL…
“70% of companies believe they select
the right business strategy, but fail to
execute it due to short-comings in
their management system” –
Accenture Report
“…only 11% of companies employ a
fully fledged strategic control system”
– Ashridge Strategic Management
Centre
“… over 66% companies with over
$500M in revenue set targets that
exceeded 9% real growth, yet less than
one company in ten achieved this level
of success.” – Chris Zook, Havard
Business Review
“In the majority of cases – we
estimate 70% - the problem isn’t bad
strategy but … bad execution” –
Fortune Magazine
“ex-e-cu-tion (ek si kyoo shun), n 1.
The missing link. 2. The main reason
companies fall short of their
promises. 3. The gap between what a
company’s leaders want to achieve
and the ability of their organisations
to deliver it…” – Larry Bossidy and
Ram Charan, Execution: The
discipline of getting things done
“90% of organisations fail to execute
their strategy” – David Norton,
Balanced Scorecard Report
5. THE CEO PERSPECTIVE…
i-nexus Solves a Big Problem
Execution is the #1 CEO
Priority
Key Execution Problems – CEO Perspective
•
•
•
•
Poorly Communicated Strategy
Unclear Accountability
Poorly Defined Roles/Responsibilities
Inadequate Execution and Performance
Monitoring
6. THERE AREApproaches and Tools Simply Don’t Work...
Current SEVERAL UNDERLYING CHALLENGES…
Senior
Management
Goals
PerformanceRearview Mirror
Reporting
Underlying Challenges:
Problem
Process
Goal Cascade
Process
Ensuring Alignment and Accountability
Maintaining Focus in the Whirlwind
10% Problem
Operational
Looking Ahead – Not Behind Operational
Management
Management
Review
Goals/Action
Plans
Urgent vs. Important
Problem
Execution
7. Some interesting numbers... Help shine a light …
THE EVIDENCE BACKS-UP THESE HYPOTHESES on the
root causes of poor execution...
“<15% of companies routinely track how they perform over how they thought they
were going to perform” Marakon Associates/Economist Intelligence Unit
“95% Employees don’t understand their companies strategy” Kaplan and Norton,
Harvard Business Report
“<27% employees have access to their company’s strategic plan” Kaplan and Norton,
Harvard Business Report
“86% of executive teams spend less than one hour a month reviewing strategy”
Kaplan and Norton, Harvard Business Report
“70% of organisations do not link middle management incentives to strategy” Kaplan
and Norton, Harvard Business Report
8. STRATEGY EXECUTION - WHAT HAPPENS IN REALITY…
The Off-site Strategy Day
The Ivory Tower Exercise
•Grow Sales of New
Product
•Customer Focus
•Invest in China
•Improve employee
satisfaction
.ppt deck
Poorly Defined
Goals
Unclear
Accountabilities
Divisional President
Functional Heads
The Ad Hoc Cascade
Give me
your numbers...
Way too much!
Cut by 25%!
Funding
Constraints
If I don’t include
it I’ll lose it...
Departmental Heads
Project
Project
Project
The Budget Dance
I need to include
some contingency...
It’s close enough for
Military work...
Projects
Middle Managers
Employees
9. VALUE OF AN EFFECTIVE EXECUTION SYSTEM IMPACT OF THE DANAHER BUSINESS SYSTEM
10. 3 SECRETS TO SUCCESSFUL EXECUTION…
1.
STAY FOCUSED
FOCUS ON 1-3 BREAKTHROUGH/WILDLY IMPORTANT GOALS ONLY
•Actively decide what not to do, not just what to do
•Ensure there is absolute goal clarity – make sure the finish line is clear
•Ensure every employee understands what winning means
2.
CLOSE THE LOOP
LOOK FORWARD, NOT JUST BACKWARD, ON AN REGULAR BASIS
•View planning and execution as an integrated process
•Define the leading measures that predict achievement of the goals
•Set targets based on expected impact of actions and review progress periodically
•Continually test assumptions and act quickly if hypothesis is wrong
3.
FOLLOW-UP RELENTLESSLY
USE STRATEGY EXECUTION SOFTWARE TO DRIVE RELENTLESS FOLLOW-UP
•Ensure every employee can easily see, understand and update their progress against the plan
•Leverage automated exception reporting to reinforce ‘monthly’ heartbeat
•Create focus on action by taking the ‘heavy lifting’ out of preparing for execution reviews
•Create accountability for results through clarity and transparency
11. STAY FOCUSED – THE CONFLICTING FORCES…
The Whirlwind
or The Day Job
URGENT
Goals
New Activities
IMPORTANT
12. STAY FOCUSED – AVOID THE URGENT NOT IMPORTANT
TRAP
HIGH
LOW
URGENT
70%
10%
URGENT
NOT
IMPORTANT
NOT
URGENT
NOT
IMPORTANT
URGENT
AND
IMPORTANT
IMPORTANT
NOT
URGENT
5%
15%
LOW
HIGH
IMPORTANT
13. STAY FOCUSED – CREATING CLARITY AND FOCUS
Less Structure
More Structure
FranklinCovey 4DX
Kaplan & Norton BSC
Hoshin Kanri
Wildly Important Goals
Strategy Maps/BSC
Planning Tables/X-matrices
2-3 Breakthrough Objectives
1-2 WIGs
From X to Y by When
LAGGING
MEASURE
LEADING
MEASURE
LEADING
MEASURE
14. CLOSETHE LOOP – CHANGE VS. RUN THE BUSINESS
CH
AN
GE
T
HE
BU
SIN
ES
S
RU
NT
HE
BU
SIN
ES
S
15. CLOSE THE LOOP – WHAT’S THE REAL QUESTION?
Goals
Translate Business Goals into
Executable Initiatives and Create
Clear Accountability for Delivery
1.
Are we on track?
2.
Insight
If we are not on track – are we doing something about it?
3.
Action
In aggregate, will the
Measure and
Forecast the
Impact of Those
Initiatives
Indicatorson
Performance
CLOSED-LOOP
actionsSTRATEGY
underway
EXECUTION
CYCLE
Impact
get us where we want to go?
Drive and Review
Execution of The
Resulting
Initiatives
Initiatives
16. CLOSETHE LOOP – HOSHIN AS BEST PRACTICE
1. Establish Vision
Develop 3-5 Year Breakthrough
2. Objectives
Develop Annual
3. Objectives
Catch-ball
Planning
Deploy Annual
4. Objectives
P
D
C
A
Reflection
5. Implement Annual Objectives
6. Monthly Review
7. Annual Review
Hoshin Process
in Concept
17. CLOSETHE LOOP – HOSHIN BOWLING CHARTS/
COUNTERMEASURES
Are we likely to hit the
future targets?
Bowling Chart
If not, why not?
What’s the root cause
and what can we do
about it – short and long
term?
Countermeasure Plan
18. RELENTLESS FOLLOW-UP – ESTABLISHING AN
EXECUTION HEART BEAT
Monthly
Business
Monthly Business
Execution Review
Execution
Meeting
Review Meeting
Make
sure its
right
M
T
W
T
Week 4
Month 1
F
M
T
W
Week 1
T
F
M
T
W
T
F
M
Week 2
T
W
Week 3
Month 2
T
F
M
T
W
Week 4
T
F
20. RELENTLESSthis problem disrupts three big software
Solving FOLLOW-UP – A NEW BREED OF CLOUD-BASED
STRATEGY EXECUTIONmarkets... IS EMERGING…
SOFTWARE
Size: $2.2Bn/CAGR 15% (Bersin)
“The fundamental problem with traditional
“Business Execution software is
Primary Buyer: HR
performance management software is that
emerging as the answer to
EMPLOYEE
• Management and Automationtwo questions
it fails to close the loop – it helps you
- how are we as an organisation going to
of Employee Goal Cascade
PERFORMANCE
identify the action to take but doesn’t help
do that? And how does it specifically
Process
MANAGEMENT
you understand if the action you have
apply to me? Business Execution
• Talent Management
taken has had any effect.”
Translate Business Goals intosoftware brings together people, projects
Martin Butler, CEO, Butler Research Executable Actions and Createand corporate performance into a single
system.”
Clear Accountability for Delivery
Bruce Richardson, Chief Research
Officer, AMR Research
Insight
Size: $1.9Bn/CAGR 28%
(Gartner)
Primary Buyer: Finance
• Tracking and Forecasting of
Financial Performance
• Tracking of Key Performance
Indicators
Measure and
Forecast the
Impact of Those
CORPORATE
Actions on
PERFORMANCE
Performance
MANAGEMENT
Action
STRATEGY
EXECUTION
SOFTWARE
Impact
Size: $1.1Bn/CAGR 9% (IDC)
Primary Buyer: Operations
• Planning and Execution of
Projects and Programs
• Optimisation of Project
Portfolios
Drive and Review
Execution of Those
PROJECT
Actions
PORTFOLIO
MANAGEMENT
21. RELENTLESS FOLLOW-UP – A NEW BREED OF CLOUD-BASED
STRATEGY EXECUTION SOFTWARE IS EMERGING…
Strategy Execution Software – helps you to:
1.
2.
3.
4.
STRATEGY
EXECUTION
SOFTWARE
Translate business goals into executable actions;
Tie in the people who need to execute those actions;
Drive and monitor execution of those actions;
Understand if the actions are actually moving, or are likely to
move, the dials that measure achievement of business goals.
22. RELENTLESS FOLLOW-UP – THE RIGHT STRATEGY
EXECUTION SOFTWARE CAN ACTIVELY DRIVE “FOLLOW-UP”
Reminder – Time to
Reminder – Time to
Focus on the
Focus on the
Important!
Important!
What Actions Are We
What Actions Are We
Taking and Are We
Taking and Are We
Doing Enough?
Doing Enough?
Are My Team On Track?
Are My Team On Track?
Where Do We Need to
Where Do We Need to
Focus Our Attention?
Focus Our Attention?
23. SUMMARY – KEY POINTS
1
Strategy Execution is the #1 CXO Priority
2
Current Fragmented Approach Makes Strategy Execution Difficult
3
Success is Function of Right Behaviors, Right Process and Right Tool
4
Focus Requires Tough Choices, Catch-ball and Absolute Clarity
5
The Key is to Look Forward, Not Backward and Course-correct Early
6
Strategy Execution Software Makes Follow-up a Realistic Proposition
7
Stay Focused, Close the Loop and Follow-up Relentlessly!
Copyright i-nexus 2013. All rights reserved.
25. ANY QUESTIONS?
Paul Docherty
paul.docherty@i-nexus.com
Skype: pauldocherty
+44 (0) 7985 117784
For a copy of the slides please contact:
richard.valentine@i-nexus.com
Patrick Pecorilli
ppecorilli@virtual-process.com
Skype: patrick.pecorilli
+1 514-816-0618
Notes de l'éditeur
Normal practice is to drop in the prospect logo, date and name of i-nexus attendees
Although agenda’s will change, this format fits with most situations. We always want a focus on understanding the prospect’s business pains, goals, processes etc before we talk about ourselves. As a business we’re not good at exploring needs and the motivations behind these – we tend to take the first level answers we’re given and assume these are correct. We should only move onto section 3 once we are confident we know what the business issues and drivers are. Step 3 is this presentation (up to the end of the Nestle/other case study. Step 4 is a demo (if there is one). Demo always to follow the sequence of view +, Lite, Professional. Although step 5 is short, as we approach the end of the mtg, we should summarise our understanding of the business need and always ask for feedback. E.g. what are your impressions, how do you feel about the solution, to what extent do you think i-nexus may be able to meet your needs etc. If possible, get the prospect to commit to taking further action themselves rather than us doing everything
The reality is the that the process of:
defining strategic goals; [click]
translating strategic goals into operational targets; [click]
developing business plans to deliver those targets; [click]
tasking people with individual objectives and scoping/planning the improvement actions to hit those targets; [click]
executing those improvement actions; and [click]
understanding the impact of those actions on performance i.e. If we have hit the targets or are likely to hit the targets;
is in most organisation is rarely seen or managed as an integrated process... even though as we have seen this is exactly what is required to be able to execute consistently.
A major barrier to managing this process in an integrated way is the fragmented tools and systems that are used to manage the different planning and execution activities. [click]
Our strategic goals are usually captured in powerpoint decks [click] and broken down into operational targets and business plans captured in a myriad of spreadsheets [click].
The individual objectives that result from these operational goals are typically, but not always, then captured as part of the appraisal process in Talent Management Systems like [Customer’s Specific System] [click].
Whilst the personal objectives and personal development plans to help achieve these objectives are captured in the Talent Management platform, the execution of the actions is typically managed using a variety of project planning and management tools from simple task lists, excel spreadsheets to full blown project management systems [click].
We obviously hope these projects and actions will deliver the performance improvements and changes to the operating model that deliver the performance targets we expect and the it is only through reviewing the transactional data captured in the ERP and other operational systems that we can understand if the strategy has been successfully executed [click].
Although BI technology is widely deployed, many organisations still rely on spreadsheets to understand the progress against plan – particularly in terms of forecasting the expected impact of the actions that are underway [click].
The are many consequences of this fragmented process – the first is that our evaluation of the progress against individual objectives whether it’s a function of the progress of the actions that have been initiated or the achievement of the performance targets is a highly manual and often subjective process, requiring managers to pull data from multiple sources to make a meaningful assessment of whether objectives have been achieved. [click]
Secondly, the reality is that the sheer number of moving parts and disconnects within the current process, make ensuring there is close alignment between the strategic objectives, operational targets and ultimately individual personal objectives almost impossible. In most organisations, only a small fraction of the employees, typically senior management, have visibility of the strategic goals and operational targets and even fewer can articulate how their personal objectives impact those outcomes. [click]
Finally, while ERP systems can tell us everything we can ever want to know about what has happened, they are poor at telling us what is about to happen. This is fundamentally because the changes we expect in the results are a function of the projects and actions we have initiated and those operational plans are often difficult to see – frequently somewhere on the local hard-drives of the different project leads and action owners across the organisation.
The good news is that there is a solution that closes this ‘execution gap’. [click].
Although agenda’s will change, this format fits with most situations. We always want a focus on understanding the prospect’s business pains, goals, processes etc before we talk about ourselves. As a business we’re not good at exploring needs and the motivations behind these – we tend to take the first level answers we’re given and assume these are correct. We should only move onto section 3 once we are confident we know what the business issues and drivers are. Step 3 is this presentation (up to the end of the Nestle/other case study. Step 4 is a demo (if there is one). Demo always to follow the sequence of view +, Lite, Professional. Although step 5 is short, as we approach the end of the mtg, we should summarise our understanding of the business need and always ask for feedback. E.g. what are your impressions, how do you feel about the solution, to what extent do you think i-nexus may be able to meet your needs etc. If possible, get the prospect to commit to taking further action themselves rather than us doing everything