The definition of strategy execution

This blog series will give you the practical tools you need to become one of the successful companies everybody is talking about — both now and in the future. We will demonstrate that strategy acceleration is one of the key ingredients in the recipe for creating a profitable and successful company.

A company’s strategy is all about creating direction and focus, for management as well as the whole organization. Having a thought-through strategy is crucial for every business, no matter what industry you're in. The strategy execution is the work or process that will achieve the strategy that has been set. The strategy execution is the way forward. But what do we mean by strategy execution? What is being executed and what can a strategy contain

Examples of common strategic initiatives are:
 

• Increase revenue and/or profit
• Increase the company’s market share
• Increase the value of the company
• Transformation from traditional methods to digital methods of working
• Improved and altered sales
• Large reorganizations
• Environmental investments

Most companies today have some sort of strategy written down in a document. The way forward is unique for every company, but the implementation itself is a challenge for many. To move from thought to action is not always easy. Some companies do not get further than creating the strategy document while others try to work consciously and in a structured way to execute the strategy. Despite this, they do not succeed and in many cases, the process is too slow.

The board has responsibility

Boards and management groups mostly agree on the importance of having a strategy and being able to execute it. However, many boards tend to neglect this work. In small and medium-sized companies there is a tendency to focus on control and operational issues. This is a waste of valuable time - which instead could be devoted to the company’s future existence.

In our opinion, the board’s responsibility for the strategy work is clear and distinct. There is no doubt about where the responsibility lies.

Responsibilities of the board are
 

• The board should make decisions about a new strategy or make sure the existing one is executed according to plan.
• The board should make the difficult—but necessary—decisions and then create conditions for successful execution.
• They should also supervise the work and make sure the targets are reached.

Everybody is aware of the distribution of responsibilities and the workflow—still, there is rarely any result. The strategy execution stagnates, stops, or gets completely lost. This is the pattern that we have observed for almost 20 years, but why do so few do anything about this problem?

Municipalities, organizations and government face the same challenges as companies

The need for creating and succeeding with strategies does not only concern companies. Government, municipalities, and other organizations have the same challenges. Citizens demand new solutions for their services as digitalization increases in society — whether it is the police, healthcare, integration, schools, elder care, or child care. We often hear promises of new goals and strategies to meet various needs — especially at election times. But what are done to change behaviors and carrying out the strategy in reality? There is plenty of improvement work to be done within the public sector. Here are opportunities to make a difference!

The first step is understanding the goals
In order to succeed with a strategy, it is crucial that management, managers and employees all are aware of and understand the goals and the direction of the company

82 % say they want to know how to contribute to reaching the company’s goals - but don't know how.

Looking at the results of the study made by ADP Research Institute – 2017, Evolution of Work 2.0: The Me vs. We Mindset below it is easy to feel slightly dejected. It shows how big of a gap there is between those who make the decisions and those who will carry them out. With this kind of numbers, it is not so strange that strategy execution often fails.

We are guessing that within the 82 percent who feel that they want to know how they can contribute to the big picture there is a lot of frustration.

What would happen if this large group of employees felt that they were onboard the strategy train instead? Imagine the enormous power that would be released!

The positive aspect is that within the 82 percent that wants to contribute there is a huge untapped potential. And this is what management teams should focus on. Making the employees aware of the goals creates a common will to contribute to the company’s future existence. It is an opportunity that cannot be lost — yet in many companies, this is exactly what happens. You will soon understand that this is the reason why communication plays an extremely important role in our methodology, also known under the name the Howwe Way of Working.

The recipe for success

We read daily about a number of well-known companies who are used as good examples. Amazon, Uber, Spotify, being a few of them. They have managed to catch trends early, used technology to their advantage, been faster than their competitors, and are worth X billions of dollars on the stock market. Interestingly enough, three of the ten most highly valued companies today did not exist in 2000. Other companies are of course looking at them, wondering what the success factor is.

These companies have attracted a lot of attention lately and analyses have been made to try and figure out what the recipe for success really is.
We have examined quite a few of these studies and isolated some points regarding the companies’ strategy execution.

It has been shown that companies that can adapt and implement their strategies faster than others have a competitive advantage – they have on average 40% higher growth and 52% higher profit than the industrial average.

When it comes to strategy execution, what are these companies doing that others are not?

• They are able to execute a new strategy faster than other companies
• A clear direction and a well-communicated strategy to reach their goals.
• A clear process for breaking down the goals within the organization
• Clear visualization of their goals and the progress needed to reach them
• A clear and effective cross-functional cooperation between the organization’s different functions
• Daring and data-driven

Tags: