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InsightLab
How to Overcome the Gap Between Strategy and Action
Strategy into Action Made Simple
Closing the Strategy-Action Gap
Executing a new strategy is challenging, even when goals are clear and specific. Think about New Year’s resolutions. Despite our best efforts to envision success—whether it’s exercising more, saving money, or making better use of our time—we often abandon these ambitions. In fact, around 80% of New Year’s resolutions fail by the second week of February, largely due to a lack of discipline. This same challenge applies to organizations: without disciplined execution, even the best-laid strategies can fall short.
Larry Bossidy, former CEO of Honeywell, famously said, "Execution is the discipline of getting things done." Organizations that fail to bridge the gap between intent and action struggle to achieve their goals. But how can we identify potential pitfalls and develop a strategy that stands the test of time?
Strategies often fail to translate into action due to issues in three main areas: structural, cultural, and technical. Recognizing and addressing these challenges is crucial for successful strategy execution.
STRUCTURAL ISSUES
Organizational Structure
Organizational structure refers to the system of tasks, workflows, reporting relationships, and communication channels that connect and coordinate the various parts of an organization. It defines how roles, power, and responsibilities are assigned and how information flows between different levels of management and departments.
Bridging the gap between strategy and action often boils down to ensuring the organization is structured so that information, objectives, and tasks can flow seamlessly. For this, you need to understand how your organization functions and adapt the strategy to meet its specific needs.
Key Considerations for Organizational Structure in Strategy Execution
Is the organization capable of executing the strategy?
Ensuring that the organization has the necessary resources, skills, and capabilities to implement the strategy is crucial. Without the right capabilities, even the best strategies will struggle to succeed.
For example, if a strategy involves significant technological advancements, the organization must have the necessary technological infrastructure and skilled personnel to support it.
Who will own what part of the strategy, and how will objectives cascade?
Clear ownership and accountability are essential for the successful execution of any strategy. Defining who is responsible for each part ensures that tasks are completed and objectives are met.
Assigning specific departments or individuals ownership of strategic objectives ensures accountability at each stage of implementation.
How do the goals of each level of the organization link to support the strategic objective?
Ensuring alignment between different levels of the organization and the strategic objectives is critical. When each level understands how their goals contribute to the overall strategy, it creates a cohesive and coordinated effort.
Strategic Structure
Organizations often fail to link strategy and action due to cracks in logic and structure at the planning phase. Strategic structure refers to the overall logical connections between your strategy's elements (vision, objectives, focus areas, projects, and KPIs), governance, revision cycles, and timeframes.
Define a Strategic Model
Before defining projects, objectives, and initiatives, select a strategic model to guide the structure of your strategy. A strategic model helps organize the elements of your strategy into a hierarchy that defines objectives, projects, and initiatives.
Models to Consider
Hoshin Kanri
Originating in Japan and widely used across various industries, this model structures strategy over a 3-5 year timeframe with annual revision cycles. Governance involves monthly progress reviews.
The model also advocates for a catchball process for defining strategies and projects. This process involved passing idealism plans, and feedback between different levels of the organization to ensure everyone is aligned and engaged. This model proves very useful for organizations who want to engage leaders at all levels in creating a strategy formulated by all.
OKRs (Objectives and Key Results)
Popularized by Intel and Google, this model is commonly used in technology companies where decisions and directions frequently change. It requires a flexible strategy with shorter revision cycles, typically structured in a one-year plan with quarterly reviews.
OKRs consist of a clearly defined objective and 3-5 key results that measure progress towards achieving that objective. This approach ensures that each team and individual within the organization knows precisely what they are working towards and how their efforts contribute to larger strategic goals.
Key Questions to Determine the Right Model:
What is the desired strategic horizon for your strategy?
Determine whether a longer-term (3-5 years) or shorter-term (1 year) plan fits your organizational needs.
How frequently do you want to review and revise your strategy?
Decide whether monthly, quarterly, or annual reviews are more suitable for your organization.
How do you plan to cascade objectives through the organization?
Consider whether a hierarchical catchball process or a decentralized OKR approach is more effective for your team.
GOVERNANCE ISSUES
Governance involves a systematic approach to measuring and reporting progress. It is a key component of sustaining strategy and ingraining it into the organizational culture. Too often, organizations fail to integrate strategic discussions into daily operations, causing the strategy's importance to dwindle until it's back to business as usual. To prevent this, organizations must define a governance system that aligns with their culture while also challenging it.
Leadership Commitment
Without a leadership team dedicated to sustaining strategic initiatives, projects, and objectives, the strategy will fall apart. When leaders collectively prioritize a strategy, the organization can achieve a strong commitment, which is crucial for strategic success. However, achieving this requires focusing on reducing the friction associated with governance.
Set Parameters for Communication
Equip your team with the right tools to report and measure the strategy's progress. One critical step is to structure how you will report progress through standardized methods and formats to ensure alignment across the organization.
Key Questions to Consider When Structuring Governance:
How often will we meet?
Determine a consistent schedule for governance meetings to maintain regular oversight and accountability.
What format will the meetings have?
Decide on a standard format for meetings to ensure they are productive and focused on key strategic objectives.
Who will be involved in the discussions?
Identify the key stakeholders who need to be part of the governance process to provide insights and make informed decisions.
What information is necessary to keep updated?
Ensure that all necessary data and metrics are consistently updated and available to support informed decision-making during governance meetings.
Formatting your Governance Meetings
When it comes to formatting your meetings, consider adopting a 3 step approach to meeting structures:
What is happening
Review progress and identify areas of success or failures
Identify elements that require problem solving
Problem Solving
Clearly define the problem
Arrive with root cause analysis
Determine steps and actions to solve the problem
Next Steps
Review agreements reached during the meeting
Record the activities to be implemented
Ensure understanding of all parties
Centralization and Access to Information
Centralizing data is crucial for effective strategy execution. When data is scattered across multiple systems, it creates inefficiencies and inaccuracies. Employees end up spending a disproportionate amount of time consolidating data from different sources, which delays decision-making and increases the risk of errors.
A centralized data system ensures that all departments have access to the same accurate, up-to-date information, facilitating better strategic decisions. By implementing a robust data integration platform, organizations can streamline data flow, reduce redundancy, and enhance data accuracy.
CULTURAL ISSUES
Know Who the Strategy Will Affect
Identify key groups impacted by the strategy, both positively and negatively. Develop a communication plan that understands the audience, their concerns, and expected benefits. Treat the broader organization as a customer who needs to buy into the strategy for it to align with overall business objectives.
Key Questions to Ask for Each Group:
What is changing?
Understanding the specifics of the change helps in tailoring communication and addressing concerns effectively.
Who is impacted by the change?
Identifying affected individuals or groups ensures that no one is left out of the communication loop.
How will they be impacted?
Knowing the impact helps in preparing support and resources to facilitate the transition.
Why is the change happening?
Explaining the rationale behind the change helps in gaining buy-in and reducing resistance.
What is at stake?
Highlighting the importance of the change can motivate stakeholders to support the initiative.
How do people feel about the current state?
Understanding current sentiments helps in addressing fears and leveraging positive attitudes.
What reactions do you anticipate when the change occurs?
Anticipating reactions allows for proactive management of potential resistance or concerns.
Find Your Influencers
Not social media influencers, but organizational influencers. Simon Sinek’s Law of Diffusion of Innovation explains that most people initially resist change. According to Sinek, only a small percentage of the population are innovators (2.5%) and early adopters (13.5%) who embrace new ideas quickly. These two groups combined can be referred to as your internal influencers.
Key Takeaways
Innovators and early adopters are crucial for the initial acceptance of a new strategy.
Once these groups are on board, the remaining groups (early majority, late majority, and laggards) are more likely to follow.
Identify individuals in your organization who are eager to try new things and advocate for change. These influencers have the ability to bring others on board.
Implementing the Rule
Recognize influencers at all levels of the organization, as their buy-in is essential for the strategy to succeed across the board. When your strategy gets to a very tactical level, consider incentivizing key influencers. This will ensure they are motivated to help implement the strategy in the tactical levels of the company.
CONCLUSION
Successfully bridging the gap between strategy and action is essential for any organization's success. By addressing structural, cultural, and technical issues, you can ensure that your strategies are not only well-designed but also effectively implemented. Focus on aligning your organizational structure, securing leadership commitment, and fostering a supportive culture. Additionally, streamline your governance processes and centralize data access to facilitate informed decision-making. With these steps, you can transform your strategic plans into tangible results, driving your organization towards its goals.
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