| Avoid a stay of execution |
| We know that the failure rate of strategic plans is high, … |
“…70 percent to 90 percent of organisations
failed to realise
success from their strategies.”
(Kaplan & Norton, Strategy Maps, 2004) |
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| and we know why: |
“… in the majority of cases – we estimate 70 percent –
the real problem isn’t [bad strategy] … it’s bad execution.”
(Kaplan & Norton, The Strategy-Focused Organisation, 2001) |
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| Under the heading Failure to Launch, McKinsey Quarterly reported recently that a significant number of respondents express concerns about executing strategy: |
“Some 28 percent say that their company produces a strategic plan that reflects the company’s goals and challenges but is not effective.
Another 14 percent say the strategy and plans for executing it are not necessarily aligned with each other.”
“ … 78 percent of those who are satisfied … say their process leads to explicit objectives that are communicated well throughout the company."
"Respondents’ top two suggestions are improving the
company’s alignment with the strategic plan, and developing a method to monitor progress against the plan."
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| Making it happen |
| We suggest that there are several keys to successful execution of corporate strategy: |
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engagement of the right people from the outset, reflecting both their ability to contribute to the discussion, and their ultimate responsibility for achieving results |
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a clear and shared understanding of what the organisation is there for, and how its performance is to be measured |
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accurate identification of the ‘elephants’, those half-dozen issues that will make or break your organisation’s future |
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development of a balanced set of appropriate high-level strategic responses which collectively address all the elephants |
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integrated implementation plans which draw from the traditional project management disciplines, but also reflect correlations and lead-lag relationships between desired strategy outcomes and intermediate objectives |
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a method for monitoring progress against the strategic plan |
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understanding and maintaining the distinction between operational management, and strategic projects |
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a means of communicating the elements of the resultant strategic plan effectively across the organisation |
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recognition and reward systems that are aligned with strategic (and not just operational) objectives. |
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As you run through this list, you can appreciate why the Argenti system is so highly regarded.
The Argenti process provides for the establishment of a monitoring process for the organisation’s paramount corporate performance indicator, or BPI. Strategic events happen randomly, so there is no way of knowing when you might need to revisit key elements of your Strategic Plan. Argenti’s monitoring process therefore ensures that the currency of the Strategic Plan is being checked regularly, not withstanding any critical event.
Meanwhile, the strategies themselves need to be pursued, by implementing the initiatives within them. If we are confident that we have identified the right elephants, and developed the right strategic responses to address them, success will depend on how effectively we deploy those strategies. This is essentially a project management task.
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“Only 56 percent of respondents say that their company
currently tracks the execution of its strategic initiatives.”
(McKinsey Quarterly, Aug 2006) |
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The Argenti strategic planning process inherently results in the development of ‘projects’, in some form or other.
A project is typically defined in terms of core parameters, particularly |
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Owner (person responsible for project management including reporting) |
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Timeline (start and finish dates, unambiguous completion milestones) |
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Inputs (resourcing) |
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Outputs (intermediate stages in the value creation sequence), and |
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Outcomes, or Impacts. |
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These various elements – the projects, owners, timelines, resource inputs, outputs and outcomes – collectively comprise what is termed a ‘work break-down structure’. Strategy deployment entails the effective project management of this work break-down structure.
Each project or initiative may be broken down into subordinate ‘tasks’, each with its respective timelines and inputs; outputs, and outcomes/impacts are generally more available (in terms of information) and more meaningful, if left at the project level.
We suggest that while the horizon of a strategic plan is typically several years, the key to successful deployment is a focus on the next three months (the so-called ‘100-day strategic plan’, rolling forward) and monthly reporting of progress against plan.
Timelines should be in units that match the reporting frequency, preferably monthly.
Inputs will be of three main categories: |
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existing staff (ie whose time is partially or totally reallocated to such strategic projects from other duties) |
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other people (additional employees, or contractors) |
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other out-of-pocket expenditure associated with the project. |
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Outcomes/impacts should ultimately be reflected in the organisation’s highest corporate indicator, its BPI.
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| D*Ploy© - our proprietary Strategy Deployment Dashboard for tracking dollars and deadlines |
We have developed a proprietary Strategy Deployment Dashboard, D*Ploy©, which facilitates the management and exception reporting of strategic project management by our clients’ executive management. It avoids the complexity of advanced project management tools, such as MS Project®, which may simply fail through lack of use because many executives find them over-whelming. D*Ploy© provides sufficient functionality to hold all of the content developed in the work break-down structure of the strategic plan, and to report on the classic three dimensions of project management, ie quality, expenditure and timeliness. The development of D*Ploy© reflects our own observations about the generic weaknesses in the strategy deployment process, and the lack of practical management tools to address them. Our Strategy Deployment Dashboard provides a natural complement to operational performance reporting dashboards, including those based on the Balanced Scorecard®.
D*Ploy© was built in MS Excel®, and retains Excel’s look and feel, which means it is familiar territory for just about every executive. D*Ploy© can be installed on the client’s desktop or server, or delivered as a bureau service on an application service provider.
We are also available to manage the deployment process itself if desired, as an outsourced Project Office of the Chief Executive.
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