How to Turn Your Strategy into Action
Success and failure often come down to effectively executing a well-crafted strategy. How confident do you feel with your organization’s strategy? How confident are you in executing that strategy?
According to an article published by Harvard Business Review (HBR), three out of every five companies rate their organization as weak on strategy execution. Another report by McKinsey & Company revealed that only 27% of executives said their organizations were good at shifting resources across business units or functions to support strategic priorities. Additionally, only 21% of executives said their organizations were good at reallocating budgets to reflect changes in the external environment.
One of the most common reasons organizations fail to execute their strategy is the need for more alignment across the company. Finding solutions to this business challenge is often a make-or-break moment for organizational leaders. Many organizations have used various methods to help turn their strategy into actionable business outcomes.
From Strategy to Action
Objectives: Management by Objectives (MBO), popularized by Peter Drucker in his 1954 book The Practice of Management, involves setting specific objectives communicated throughout the organization. These objectives are aligned with the overall company strategy, and progress towards achieving them is regularly monitored and evaluated.
OKRs: Objectives and Key Results (alternatively OKRs) is a goal-setting framework that individuals, teams, and organizations use to define measurable goals and track their outcomes. The OKR framework is widely credited to Andrew Grove, who introduced OKRs at Intel in the 1970s and documented this innovative approach to goal setting in his 1983 book High Output Management. John Doerr, a former Intel employee, learned about OKRs in a course taught by Grove while at Intel. Doerr brought the idea of OKRs to Google during the company's start-up phase, where it became a cornerstone of the company's culture. Doerr's 2018 book Measure What Matters comprehensively explains Grove's OKR concept and its application in various contexts.
KPIs: Key Performance Indicators (KPIs) are specific, measurable metrics that track various aspects of an organization's operations, while OKRs focus on setting ambitious goals and measurable outcomes. Organizations can identify trends, measure progress, and make data-driven decisions by monitoring KPIs. Together, OKRs and KPIs provide a comprehensive approach to strategic management.
SMART Goals: Several other goal-setting methods are used in organizations to define and achieve objectives. One such method is SMART Goals, which stands for Specific, Motivating, Attainable, Relevant, and Trackable. This framework helps individuals and teams set clear and attainable goals, ensuring they are realistic and have a defined timeline for completion.
Balanced Scorecard: Another widely used approach is the Balanced Scorecard, developed by Robert Kaplan and David Norton. This method goes beyond traditional financial metrics and includes performance indicators in four key areas: financial, customer, internal business processes, and learning and growth. By balancing these different perspectives, organizations can achieve a more comprehensive view of their performance and strategic progress.
Each method provides a structured approach to goal setting, allowing organizations to plan, execute, and measure their strategic initiatives effectively. Organizations can choose the best approach to meet their unique needs and drive success by understanding and utilizing various goal-setting frameworks.
Best Practices for Turning Strategy into Action
Executive Buy-In
Securing executive buy-in is crucial for implementing your chosen approach to executing strategy. When top leaders show commitment to the methodology, it emphasizes its strategic importance and encourages a culture of accountability and autonomy. Executives should actively participate in setting high-level objectives and regularly communicate their support to pursue them through their chosen execution methodology.
Communicating the Strategy to the Company
Communicating the company's strategy effectively is vital for successful implementation. Create a visual strategy map showing how individual, team, and company goals align. Document alignment rules and expectations and provide detailed descriptions and examples of key results or metrics that will help employees understand the impact of their work. This transparent communication ensures all team members are on the same page and focused on achieving strategic business objectives.
Organizational Buy-In
To garner support across the organization, involve and educate all team members about the benefits and processes of your execution methods. This requires comprehensive training and ongoing coaching to understand the fundamentals of your goal-setting framework. For example, training everyone to create practical goals demonstrates how individual and team efforts contribute to broader organizational goals. It empowers employees to align their roles and career development with the organization's objectives.
A Phased Approach to Implementing Methods
When implementing strategy, following a phased approach is essential to manage a new business process effectively. Start by identifying and training goal-setting champions and coaches within the organization. Then, begin with a pilot phase involving a few departments or teams to test the process and identify potential challenges to your chosen methodology. This approach allows for quick adjustments and refinements before a full-scale rollout.
Regular Check-Ins Anchored to Performance
Regular check-ins are vital for the success of any approach or strategy. Regular performance check-ins provide crucial opportunities for continuous performance conversations, feedback, and recognition while pursuing objectives. These conversations must be frequent and structured, focusing on progress toward key results, challenges faced, motivational outlooks, and any direction or support a team or team member will need to pursue the objective or key results. Integrating goals into an effective performance management system is essential to maintain relevance and alignment with the organization's strategic priorities.
Turn Your Strategy into Action
Adopt and implement a selected strategic execution plan to concentrate and drive exceptional execution, converting strategies into concrete results for continual organizational success. Let us guide you toward organizational excellence through Inspire Software’s exceptional strategy and performance platforms. CLICK HERE to request a demonstration of how Inspire can enable leaders to turn strategy into action!