A number of months ago, I wrote about the benefit of applying professional project management practices to help improve strategy execution (Struggling with Strategy? Think Project Management). While many view strategy as something that is transformational (and it often is), the fact is that an organization moves from where it is today to where it has decided to go one project at a time…like a football team marching down the field on a long-drive.
In the June, 2008 Harvard Business Review, in an article entitled The Secrets to Successful Strategy Execution, Gary Neilson, Karla Martin and Elizabeth Powers add considerably to the body of knowledge on strategy execution, with this excellent article, backed by a considerable amount of research gained in surveys of over 1,000 organizations. Their findings seem to support their thesis that: "enterprises fail at execution because they go straight to structural reorganization and neglect the most powerful drivers of effectiveness—decision rights and information flows."
A few key findings covered in the article:
- Employees at three out of five companies rated their organization weak at execution. (Asked: Are Important strategic and operational decisions quickly translated into action?)
- The number one rated trait (by a landslide) that makes organizations effective at implementing strategy: Everyone has a good idea of the decisions and actions for which one is responsible.
- Of the top eight traits (17 were identified), five were tied to having effective and timely information flows and three were related to decision rights.
- Structure as an effective trait for driving strategy execution did not hit the list until number 13, with a relatively low strength index rating.
Fascinating. It's important to see a large body of research dedicated to the execution issue and it is a great learning experience to see how valuable information flows and decision rights are to successful strategy execution.
Additional Thoughts on Strategy Execution:
Structural changes, properly implemented at the right time and for the right reasons can go a long way towards addressing and improving the information flow, decision rights and collaboration issues that are so critical to strategy execution. Don't write off structure as a powerful tool in strategy execution, however as the authors highlight, don't jump to structure as the solution. It's one part of many pieces to the solution.
Back to my strategy execution as project management thesis, the best performing project teams are characterized by clear structure, unambiguous roles, detailed communication plans and clear accountability for decisions and results. Top notch Project Managers ride herd on these issues, seeking out points of confusion or gaps in information flows and fixing them in process.
The fact that the authors are able to cite as a research finding that 3 out of 5 surveyed managers believe that their organizations do not quickly translate strategic priorities into action tells me that most of those organizations have not adopted a robust project management discipline for strategy execution. And while strategy is arguably more complicated than creating a new product or constructing a building, it is very possible to structure and manage your execution program using the same approaches.
The bottom-line (for now):
Strategy execution is where value is created. The best plans are worthless unless they are backed by a group of people that understand their roles and accountabilities and that have the information they need when they need for rapid decision-making. Execution never takes place in a straight line and without setbacks. In fact, the setbacks are powerful learning experiences that a good team will leverage as it adapts and responds to internal and external factors.
A large part of the solution in my opinion is treating execution like a high-order program comprised of a series of projects to be managed. Ask a good Project Manager how to successfully pull of an execution program and I suspect they won't need to interview 1,000 companies.
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