The missing link in strategy: Centralized deployment and execution

Strategy is only as good as its execution. In a world where disruption can strike overnight, businesses need to move quickly from strategy design to delivery. Yet, many companies focus and invest more on design, essentially treating delivery as an afterthought.

It’s impossible to give the exact number but:

‘apparently high’ percentage of organisational strategies fail, with some authors estimating a rate of failure between 50 and 90 percent (e.g. Kiechel, 1982, 1984; Gray, 1986; Nutt, 1999; Kaplan and Norton, 2001; Sirkin et al., 2005). By failure they mean either a new strategy was formulated but not implemented, or it was implemented but with poor results.

One thing is statistics and surveys on the subject of strategy deployment and execution, the results of which should definitely be questioned.

Today I would like to share my personal experience. After learning about Strategy Deployment (Policy Deployment, Hoshin Kanri) from Danaher Corporation (Danaher Business System) in 2005, I have been able to grow (6 years as a Consulting Partner at a Big 4) and have been fortunate to apply various methodologies in industries such as industrial manufacturing, pharmaceuticals, medical devices, fast moving consumer goods, retail and airlines. Over the last 18 years I have taken on mandates when strategy consultancies McKinsey, Bain and BCG already left. What is often left behind is a 100-page strategy presentation and a highly motivated executive and supervisory board.

After the strategy development has already cost 1 million USD (plus or minus 500k), the implementation should now be done internally as cost-effectively as possible.

But very often this does not work. As in the annual budgeting clown theatre process, budgets are fought over, targets are negotiated down and the silo boundaries are drawn higher, while tasks and responsibilities are thrown over the fence into the other departments garden.

Unfortunately, it usually takes 6-12 months before the leadership team comes to realize that it won't work or it is way harder without external help. It requires no hidden agendas, no politics, but methodology, clear KPIs, and a lot of experience in setting up central strategy deployment offices.

In this article, I will discuss the importance of centralized strategy deployment and execution. I will also provide some tips on how to choose the right partner to help you deploy and execute your strategy successfully.

Decentralized vs centralized strategy deployment

Decentralized strategy deployment involves giving each department or business unit the responsibility for developing and executing its own strategy. This approach can be effective in organizations where the different departments or business units have a high degree of autonomy and are able to operate effectively independently. However, it can also lead to silos and misalignment, as different departments or business units may have different goals and priorities.

Centralized strategy deployment involves developing a single strategy for the entire organization and then cascading it down to the different departments or business units. This approach can help to ensure that everyone in the organization is aligned on the overall strategy and that their efforts are coordinated towards achieving common goals.

Why centralization is important for strategy deployment

Centralized strategy deployment is important for a number of reasons:

• Alignment ("Effective"):?Centralized strategy deployment helps to ensure that everyone in the organization is aligned on the overall strategy and that their efforts are coordinated towards achieving common goals.
• Accountability ("Enabled" and "Engaged"):?Centralized strategy deployment makes it easier to hold individuals and teams accountable for their role in executing the strategy. But it also should enable and engage individuals.
• Decision-making:?Centralized strategy deployment provides a forum for discussing and analyzing strategic issues and making better decisions.
• Faster execution ("Efficient"):?Centralized strategy deployment can help to accelerate the execution of the strategy by removing silos and bottlenecks.

What are the challenges and capabilities required:

There is a lot to consider in regard of strategy deployment but these are the five core topics:

• Strategy execution is a complex and challenging process.?It involves aligning multiple stakeholders, managing change, and overcoming a variety of obstacles.
• There is no one-size-fits-all solution to strategy execution.?The best approach will vary depending on the specific organization and its unique circumstances.
• It is important to have a clear and well-defined plan for strategy execution.?This plan should include specific goals, objectives, timelines, and resources.
• It is also important to communicate the strategy to all employees and to get their buy-in.?Employees are more likely to support a strategy that they understand and believe in. Offering additional training and simulations will allow stakeholders and managers to experience the new strategy hands-on.
• Finally, it is important to track and measure progress against the strategic goals.?This will help to identify any areas where adjustments are needed. The larger the organization the more important is the right set-up including software and a skilled internal team.

Who is the best external partner to help on Strategy Deployment?

?In a nutshell: Someone the executive team fully trusts!

But this is what I've seen happening:

• The strategy consulting firms are too expensive and do not have the best reputation when it comes to implementation and execution.
• The Big 4 (Deloitte, E&Y, KPMG and PWC) are certainly experienced in implementing solutions and have the project and process methodologies. They also come with a lower mixed day rate as they try to leverage with cheaper lower level resources. To keep the lower ranks busy they tend to work for the client rather than with it. They give their work TO the client instead of jointly and sustainably adapting and integrating the methodology WITH the client.
• Experienced interim managers with a broad background, the right client-adaptable and fact-based methodology, board and C-level experience, hands-on mentality, and a lot of curiosity, empathy in change management is a solution that promises the most sustainable and culturally compatible implementation with no need to utilise junior resources but work with the teams of the client.

What are typical steps required. How can an Interim Executive help?

From a strategy execution expert, you should expect at least a mixture of these services:

1. Validating the new strategy including:Build a revenue bridge between all the initiatives for the next 3-5 years? Build the KPI tree from a few “breakthrough objectives” down to the local organization’s KPIsAdd enough leading indicators to react early
2. Align C-Level with workshops and simulations. They all must be consistent in their strategy communication. A new way of thinking, leading and reporting is required (e.g. root cause and counter measures, Pareto analysis, fact based management, no fingerpointing, no blaming)
3. Support in communicating the strategy to employees and getting their buy-in. Aligning Corportate Communications and HR with the Strategy Deployment Office. Lead the behavioural change.
4. Developing and implementing a plan to execute the strategy.
5. Build up the Strategy Deployment Office (people, tools, and standard operating procedure). Assistance in tracking and measuring progress against the strategic goals.
6. "Hand-over" or actually a smooth transition to the daily business to run without the expert.

?

Any questions? Please feel free to reach out.

Sources:

Kiechel, W. (1982). Corporate strategists under fire. Fortune, December, 106(13), 34-39.

Kiechel, W. (1984). Sniping at strategic planning. Planning Review, May, 8-11.

Gray, D.H. (1986). Uses and misuses of strategic planning. Harvard Business Review, 64(1), 89-97.

Nutt, P.C. (1999). Surprising but true: half the decisions in organizations fail. Academy of Management Executive, 13(4), 75-90.

Kaplan, R.S. and Norton, D.P. (2001). The Strategy-Focused Organization - How Balanced Scorecard Companies Thrive in the New Business Environment. Boston, MA: Harvard Business School Press.

Sirkin, H.L., Keenan, P. and Jackson, A. (2005). The hard side of change management. Harvard Business Review, 83(10), 109-118.