In the complex business world, strategizing and planning are only the beginning of the journey toward success. The real challenge for organizations is executing those strategies effectively to achieve their desired goals. It is common to witness well-formulated strategic plans fall flat due to poor execution. According to research from Bridges Business Consultancy, a staggering 48 percent of organizations fail to reach even half of their strategic targets. Even more concerning, only seven percent of business leaders believe their organizations excel at strategy implementation1. This begs the question: What does it take to ensure that your strategic plans translate into actionable results? This article will delve into the five essential keys to successful strategy execution, as Harvard Business School Online1 outlined.
1. Commit to a Strategic Plan
Before embarking on the journey of execution, it is crucial to establish a foundation of commitment to the strategic plan among decision-makers and stakeholders. Harvard Business Review research reveals that a substantial 71 percent of employees in companies with inadequate execution believe that strategic decisions are frequently second-guessed. This starkly contrasts with the 45 percent of employees in companies with solid execution who experience the same1.
The act of committing to a strategic plan serves as more than a symbolic gesture. It ensures that all key players and their teams are on the same page, aligned with the organization’s overarching goals. This shared understanding cultivates a unified sense of purpose and direction. In today’s dynamic business landscape, strategies must evolve to address new challenges and opportunities. Effective communication is the cornerstone of maintaining alignment from the initial planning stage to the ongoing execution phase.
2. Align Jobs to Strategy
One of the obstacles that organizations often need help with strategy execution is the need for more alignment of job roles with the established strategy. This misalignment can occur when employees are brought on board before a strategy is defined or when positions are based on a previous strategy. In response to this challenge, Harvard Business School Professor Robert Simons introduced the Job Design Optimization Tool (JDOT).
JDOT is a framework that evaluates the optimization of job roles for high Performance, ensuring that they align seamlessly with the organizational strategy1. Simons identifies four critical “spans” that define a job’s design: control, accountability, influence, and support. These spans can be adjusted to create a tailored job design that facilitates successful strategy execution. By designing roles that align with the strategy, organizations empower their workforce to execute tasks in line with the broader goals, leading to enhanced Performance.
3. Communicate Clearly to Empower Employees
Clear communication is the linchpin of strategy execution. Astonishingly, 95 percent of employees must know or understand their company’s strategy1. This communication gap underscores the need for organizations to improve their communication strategies significantly.
The success of strategy execution hinges on the collective efforts of each organization member. Therefore, it’s vital to ensure that every individual comprehends the company’s overarching strategic goals and how their daily responsibilities contribute to achieving them. The Harvard Business Review highlights that in companies with solid execution, 61 percent of staff believe they receive the necessary information to understand the bottom-line impact of their work. Conversely, in organizations with weak execution, only 28 percent share this sentiment1.
Empowering employees through effective communication involves training managers to convey the impact of their teams’ work, conducting all-staff meetings to disseminate critical information, and nurturing a culture that celebrates milestones in achieving strategic objectives.
4. Measure and Monitor Performance
Effective strategy execution relies on a continuous evaluation of progress toward established goals. Organizations must identify numeric key performance indicators (KPIs) during the strategic planning phase to facilitate this process. These numeric goals act as quantifiable measures of success, enabling teams to monitor progress consistently and make informed decisions based on real-time data.
For instance, consider an organization aiming to increase customer retention by 30 percent by 2024. By meticulously tracking changes in the customer retention rate on a weekly or monthly basis, trends can be identified over time. If the data indicates a consistent decline in customer retention, it signals that the strategy might need adjustment. On the other hand, steady month-over-month growth provides valuable insight into whether the organization is on track to meet its goal by the specified timeline.
5. Balance Innovation and Control
Innovation fuels company growth but can challenge strategy execution if not managed effectively. Organizations must strike a balance between fostering innovation and maintaining control over implementing their current strategy.
To navigate this delicate balance, organizations must establish a process to assess challenges, barriers, and opportunities as they arise. Questions regarding decision-making authority and non-negotiable components of the strategy must be addressed proactively. Organizations answer these questions in advance to ensure a straightforward and streamlined execution process.
Moreover, it’s essential to remember that stagnation impedes growth. Encouraging employees to brainstorm, experiment, and take calculated risks within the context of strategic initiatives can drive innovation while staying aligned with the overall strategy.
Conclusion
In business, strategy execution is the linchpin that transforms plans into tangible outcomes. Successful execution requires a commitment to the strategic plan, the alignment of job roles with the strategy, clear communication, meticulous performance measurement, and the delicate balance between innovation and control. Harvard Business School Online’s insights provide invaluable guidance for organizations striving to bridge the gap between strategic planning and tangible results1. In today’s rapidly evolving landscape, mastering the art of strategy execution is a skill that can set organizations apart and pave the way for sustained success.
About the Author
Catherine Cote is a Marketing Coordinator at The Online Harvard Business School. With her passion for business education and deep understanding of strategy execution, Catherine’s contributions to the field offer valuable insights into transforming strategic plans into actionable outcomes. We are grateful for her comtribution.
Footnotes
- Harvard Business School Online’s Business Insight Blog. (17 Nov 2020). “5 Keys to Successful Strategy Execution.” Retrieved from https://online.hbs.edu/blog/post/5-keys-to-successful-strategy-execution