CLOSING THE STRATEGY EXECUTION GAP THROUGH BUSINESS SIMULATIONS

STRATEGY EXECUTION IS STILL ONE OF THE BIGGEST CHALLENGES FOR ORGANIZATIONS WORLDWIDE

What if, after having communicated your TOP 5 strategic priorities multiple times, only about half of your middle managers and less than 1/3 of your operational employees were able to name even one? According to a HARVARD BUSINESS REVIEW study (HBR 58), this was and still is a reality for many companies. This also demonstrates that strategic initiatives tend to fail at the execution level - because there is little to no understanding or support on how to operationalize the strategy. Typical conditions causing companies to struggle in this area include unclear responsibilities, insufficient strategy communication and inadequate transformation concepts. Further obstacles consist of the employees’ insufficient understanding of the strategy or success factors and the implementation of performance measures which are not aligned with the strategy. It is the how do you break down an elephant question...one bite at a time. But you need to understand how to break it down, and have the right skills and tools to then work and perform in the area that you are responsible for.

According to research by Hrebiniak, the lack of accountability for the execution process is one of the most critical business risks. If implemented incorrectly, strategy remains only a vision, not a movement cascaded down through the organization nor transformed into action. However, if those challenges are tackled right and companies establish a clear and stable connection between the executive board and the operational business, the organization’s performance reaches a whole new dimension. The key issue is that multiple factors are involved and an effective implementation needs to be able to individually address different hierarchy levels. You cannot make anyone accountable (or ask them to feel accountable) for a strategy they cannot break down into sizeable bits nor have the right support, resources or tools to execute properly - which includes smart solutions for performance measurement.

So how can Business Simulations help?

In a business or management simulation participants - alone or, ideally, in teams - take over the management of a simulated company in a specific industry. Their goal is to set a strategy for "their" organization, facing fierce competition and a VUCA environment shaken by disruptions (very much like in real life). They need to close the gap between setting their strategy and then, over the course of 4-6 simulated business years, execute it properly. This gives participants a good understanding on how difficult projections are, what agility really means, how to align strategic and operational decision making but also how to chose and track KPIs to assure that you are on track with what you wanted to achieve. Simulations are industry and context agnostic, thus the learning can be transferred immediately. They also give a very holistic understanding how the different areas of an organization have to come together to assure performance and growth. Immediate feedback through the simulation results as well as debrief and reflection sessions allow not only an emotional connection with what has been experienced but most importantly a measurable and sustainable learning transfer. Across all levels in the organization it helps contributors understand what their role in closing the strategy execution gap is and what they might need to start doing or do differently. Through the awareness - application - reflection - execution cycle, the team dynamics and the feedback loops trainings or workshops leveraging business simulations or interactive case-studies are engaging, powerful and a lot of fun.