Strategic Business Execution Introduction


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Thomas Edison once said: “Genius is one percent inspiration and ninety-nine percent perspiration”. Isn’t this true for business success too? The best ideas, plans, and strategies in the world are meaningless unless they are thoughtfully executed and produce the desirable outcomes. Otherwise, they are just binders on bookshelves or files in dumpsters.

Schools, academics, and even many business executives are enthralled by strategy and planning. Why? Because they are beautiful, simple, unencumbered by the messiness of getting hands dirty. Yet, without the ability to transform these ideas into reality, does strategy really matter?

This special seminar presents two frameworks:A simple framework that divides organization activities into three major aspects: planning, operating, and changing. The emphasis is not to minimize the importance of planning and strategy as they are critical to success. But to achieve operational excellence and to manage change effectively, the ability to execute becomes paramount.
A comprehensive framework on Strategic Business Execution that includes four components:

Value, Behavior, and Attitude – the intrinsic “software” of individuals, teams, and companies
Important Competencies – the essential abilities (e.g. skills and expertise)
Core Disciplines – the basic methods, systems, and control
Integrating Processes – the unifying force that ties all these components together

On the Core Disciplines, we discussed nine disciplines that include strategic planning, portfolio/program/project management, PMO, process improvement, organization change, data visualization and decision support, operational management. We will conclude the presentation with five “universal” rules of business execution.

Published in: Business

Strategic Business Execution Introduction

  1. 1. Introduction to Strategic Business Execution O C TO B E R  1 9 ,  2 0 1 3
  2. 2. o Prologue o Importance of Strategic Business Execution o Strategic Execution Framework Agenda ◦ Value, Behavior, and Attitude ◦ Important Competencies ◦ Integrating Processes ◦ Core Disciplines o Five Rules of Business Execution o Appendix PROPRIETARY AND CONFIDENTIAL 2
  3. 3. Prologue My interpretation: “Having a great idea is only  1% of the effort, getting it  done is the other 99%” PROPRIETARY AND CONFIDENTIAL 3
  4. 4. o By a show of hands, how many of you  have too many ideas and not enough time  to do something with them? Two warm up  questions… o How many of you work for organizations  that also have the same situation – long  on strategies and short on execution? PROPRIETARY AND CONFIDENTIAL 4
  5. 5. Why is execution more difficult?  Reason 1: Execution  is difficult and  often too messy ◦ Projects, for example, can always be done cheaper,  faster, better, and more inclusively. ◦ It’s nearly impossible to plan everything. As Molkte the  Elder stated: “No plan survives contact with the enemy.” Reason 2: Execution  is a big and vague  concept ◦ What is execution? It feels all pervasive. ◦ We know good execution when we see it, but we rarely  can describe it. Reason 3: Execution  is simply not sexy ◦ Students want to learn about strategy. ◦ Academics are attracted to research on business  strategy, strategy formulation, and strategic alignment. ◦ Strategy is exciting. PROPRIETARY AND CONFIDENTIAL 5
  6. 6. On Reason 1, a recent search on o Execution (and like terms such as Implementation) ◦ Hits: 379 + 1,860 = 2,238 o Strategy (and like terms such as Strategic) ◦ Hits: 23,113 + 18,821 = 41,934 o “Strategy + Strategic” is 19x more than “Execution  + Implementation” o The often incorrect perception is that execution = grunt work PROPRIETARY AND CONFIDENTIAL 6
  7. 7. But! What is strategy without execution?
  8. 8. How many companies have  beautiful and often expensive  binders of ideas, plans, and  strategies? How many of them are well  executed? How often do you receive great  sounding advice but it is incredibly  hard to achieve?  That’s because execution is  more difficult What is the value of a plan  without results? Very little PROPRIETARY AND CONFIDENTIAL 8
  9. 9. Astonishing Findings 90% of well‐formulated strategies fail due to poor execution1 5% of employees understand their corporate strategy2 3% of executives think their company is very successful at executing its  strategies, while 62% think they’re only moderately successful, or worse3 2009 In 2009, about 523k new businesses started, and nearly 661k businesses  closed down.4 PROPRIETARY AND CONFIDENTIAL 9
  10. 10. Here are some recent books on business execution PROPRIETARY AND CONFIDENTIAL 10
  11. 11. Importance of Strategic Business Execution My understanding: “Plan without action is  worth little, and action  without purpose is just  waste.” PROPRIETARY AND CONFIDENTIAL 11
  12. 12. Here is a simple framework What do organizations do? How much of this work is  “execution‐related”? Answer: nearly everything PROPRIETARY AND CONFIDENTIAL 12
  13. 13. Activity Map of An Organization  Operating Planning Changing (PPP) Corporate Structure Portfolio (Risk & Reward)  Corporate Integration Identify & Analyze: Mission, Vision & Culture ID & Categorize Evaluate & Select Corporate Strategy Business Strategy Business Objectives Financial Plan Risk: ID & Analyze Develop Risk Tolerance &  Response Budgeting Functional Strategies: Marketing Sales Product IT… Govern: Program (Benefits) Project (Deliverables) Initiate Program Initiate Project Plan Program: Plan Project: Benefits Management Stakeholder Governance Scope Schedule Finance Integration Scope Schedule Cost Quality Human Resources Communication Risk Procurement Integration Operation Plan: Facility Plan Production Plan Contingency Planning Disaster & Recovery Service Plan Material Plan Resource Plan Training Plan Quality Management Customer Relationship ... Service Catalog Manage Operations Prioritize & Balance Authorize & Adjust  Communicate Execute Program Execute Project Monitor & Control Monitor & Control Operational Metrics &  Reporting Monitor & Control Closing Program Closing Project Continuous Improvement Multi‐Disciplinary • Organization Change Management • Organization Development • Leadership • Incentives • Communication • Control • Business Process Change / Re‐engineering • Functional Leadership (e.g. IT, Finance, Student Affairs…) Slide 13
  14. 14. What is the benefit of strategic business execution? Things get done! They may not be perfect and there are trade‐offs.  But the alternative of not achieving  results is often far worse… PROPRIETARY AND CONFIDENTIAL 14
  15. 15. What does research show? Organizations with a  formal strategy execution  process outperform  organizations without one Do you have a formal strategy  execution process in place? Percent of companies who have  achieved “breakthrough”  results or performed better  than peer group5 PROPRIETARY AND CONFIDENTIAL Yes No 54% 46% 70% 27% 15
  16. 16. Strategic Business Execution Framework “Execution is never an accident; it is  always the result of high intention,  sincere effort, intelligent direction,  skillful execution and the ability to see  obstacles as opportunities.” ‐ Te Wu My interpretation: PROPRIETARY AND CONFIDENTIAL 16
  17. 17. What is strategic business execution (SBE)? o SBE is an interdisciplinary practice of aligning strategic  business objectives with implementation ◦ Practice is the pragmatic application of this body of interdisciplinary  skills with the right behavior and attitude o Strategic planning Interdisciplinary refers to  simultaneous application  of many schools of  management such as o Organization change and development o Communication o Portfolio, program, and project management  o Innovation and technology PROPRIETARY AND CONFIDENTIAL 17
  18. 18. What is strategic business execution (SBE)? o Aligning refers to the process of continuous adjustment ensuring  actions and planning are in agreement. o Implementation refers to the methodical execution of the business  objectives to achieve real and tangible benefits. Strategic business  objectives refers  o Establishment, prioritization, and resourcing  of critical business and organization goals o Both short‐term and long‐term o That are essential to survival and growth.  PROPRIETARY AND CONFIDENTIAL 18
  19. 19. In short, Strategic business execution is about  “doing the right thing” in the “right way” PROPRIETARY AND CONFIDENTIAL 19
  20. 20. Four Components There are four components of SBE, each playing a vital role. Execution excellence is  when these components work in tandem. Value, behavior,  and attitude  Important  competencies  Core  disciplines  Integrating  processes  the intrinsic “software” of  individuals, teams,  and companies  the essential abilities (e.g. skills  and expertise) the basic methods,  systems, and  control  the unifying force  that ties all these  components  together  PROPRIETARY AND CONFIDENTIAL 20
  21. 21. Four Components Value,  Behavior,  Attitude Important  Competencies Core  Disciplines Execution  Excellence Integrating Processes PROPRIETARY AND CONFIDENTIAL 19
  22. 22. Value, Behavior, and Attitude This is the intrinsic software that operates at all levels (individual, team, organization,  sector/industry, national, etc.) Here are some execution oriented values, behaviors, and attitude: Value ‐ Behavior ‐ Attitude ‐ the moral principles  and beliefs  observable  activities how a person views  something o Industrious o Respect o “Can do” o Resolution o Teamwork  o Optimism o Integrity  o Organization o Resiliency PROPRIETARY AND CONFIDENTIAL 22
  23. 23. Important Competencies o Building on Career Architect Development Planner by Lominger, we identified 69 individual competencies (many of which are applicable at a team or firm level).  o Many of these competencies are execution focused. These are my top 10: ◦ ◦ ◦ ◦ ◦ Action oriented Balancing Conflict management Decision making Delegation ◦ ◦ ◦ ◦ ◦ Interpersonal savvy Listening Managerial courage Motivating others Problem solving For a complete listing of the 69 competencies, see Appendix C. PROPRIETARY AND CONFIDENTIAL 23
  24. 24. Integrating Processes o Integrating processes are the basic unifying, workflow, and pre‐programmed  steps that facilitate execution.  o The driving paradigm is to apply the right balance between system and flexibility  that routinizes otherwise complex operations.  o Based on our experience, organizations must develop these 8 integrating  processes and apply them judiciously across the firm: ◦ ◦ ◦ ◦ Governance Planning and organizing Issue and risk management  Conflict management ◦ ◦ ◦ ◦ Change management Information / Knowledge management Dependency management Business alignment PROPRIETARY AND CONFIDENTIAL 24
  25. 25. Core Disciplines My interpretation: “To achieve execution excellence,  businesses must apply the right  disciplines to the problems at hand.” PROPRIETARY AND CONFIDENTIAL 25
  26. 26. Core Disciplines o Disciplines are major subjects of collective knowledge, practices, and  tools For strategic business  execution, our  experience shows  there are nine core  disciplines PROPRIETARY AND CONFIDENTIAL 26
  27. 27. 1. Strategic Planning o For organizations to be successful, having a strategy plan that works is critical.   Not only do strategic plans provide direction, they also align the entire  organization toward achieving their plans. o Collaborative – bringing key players together to  develop the plans We advocate  strategic  planning that is o Data driven – planning should be less emotional  and more driven by external and internal data o Realistic – evaluating the organization’s  capabilities before jumping in o Prioritized – focus on the essential and  determine what will or would be “good enough” PROPRIETARY AND CONFIDENTIAL 27
  28. 28. 2. Portfolio Management o Organizations should manage their initiatives as investments using the relevant  principles from portfolio management. o Identify, categorize, evaluate, prioritize and  authorize opportunities o Identify risk, analyze, and develop risk response Key processes  in Portfolio  Management o Balance and rebalance portfolio to reflect  changes o Communicate, monitor & control,  and review  portfolio performance o Make adjustment when/if business strategies  change PROPRIETARY AND CONFIDENTIAL 28
  29. 29. 3. Program Management o Program management focuses on the business benefits and the alignment of the  various projects and components within the program o Strategy alignment Performance  domains in  Program  Management o Governance o Lifecycle Management o Benefits management o Stakeholder engagement PROPRIETARY AND CONFIDENTIAL 29
  30. 30. 4. Project Management o Project management focuses on completing deliverables under constraints such  as schedule, resources/budget, scope, and quality. There are 10 knowledge areas. Knowledge  areas in PMI  PMBOK 1. Scope 2. Schedule 3. Budget 4. Procurement 5. Risk 6. Quality 7. Human Resources  8. Stakeholder 9. Communication 10. Integration PROPRIETARY AND CONFIDENTIAL 30
  31. 31. 5. Project Management Office o Project management offices (PMOs) are designed for highly intense and complex  projects or operational environments.   Our PMO  capability  model includes  three  evolutionary  stages o Essential – focusing on tactical management  and control o Advanced – shifting toward greater  intelligence and long‐term value o Strategic – creating a value‐driven  organization that strives toward deeper  alignment with business strategy and goals PROPRIETARY AND CONFIDENTIAL 31
  32. 32. 6. Operational Management o For an organization to excel, it is imperative to create a stable and consistent  operational environment. Otherwise, changes resulting from projects and  programs would be built on a poor foundation. o Operational considerations, as shown on earlier on Slide 13, are vast. One of the  best frameworks available today is ITIL – Information Technology Infrastructure  Library6 – and it is applicable for a wide variety of service industries. ITIL Framework o o o o o Service Strategy Service Design Service Transition Service Operation Continual Service Improvement PROPRIETARY AND CONFIDENTIAL 32
  33. 33. 7. Process Improvement o A business process is a collection of related, structured activities or tasks that  produce some desirable results From our  perspective,  organizations  ought to have  four types of  processes o Management processes for planning and  decision support o Operational processes for managing the core  business o Changing processes for program and project  change management o Supporting processes for enabling the other  functions of the organization PROPRIETARY AND CONFIDENTIAL 33
  34. 34. 8. Organization Change Management o Organization change management (OCM) is a framework for managing changes in  organizations related to people, teams, and their relationships o Business process and technology changes, requiring  “adoption management”  Specific uses of  OCM from  tactical to  strategic o Organization restructure, focusing on “change  navigation management” and “human capital  management” including talent management o Culture change, especially during mergers and  acquisitions when two or more cultures often clash  before integrating, requiring a high level of respect and  sensitivity o Vision, driving agreement and legitimacy to establish a  common future PROPRIETARY AND CONFIDENTIAL 34
  35. 35. 9. Data Visualization and Decision Support o Today, executives and professionals are inundated with data. But unless data  translates to information and information into knowledge, data by itself is often  inadequate.  Visual  communication is  more powerful  than verbal  communication o There is a big connection between seeing and  remembering.  o Visual interpretations of information in the  form of simple yet powerful diagrams, tables,  graphs, charts or any other format that can  convey the message of what “it means”  without someone providing an explanation PROPRIETARY AND CONFIDENTIAL 35
  36. 36. Five Rules of Business Execution My interpretation: “Read the five rules” PROPRIETARY AND CONFIDENTIAL 36
  37. 37. The Five Rules of Business Execution 1 Focus on the vital few 2 Determine "what is good enough" for the rest  3 Establish good metrics and reward systems 4 Create an easy to understand  scoreboard 5 Develop a culture of accountability PROPRIETARY AND CONFIDENTIAL 37
  38. 38. 1 Focus on the Vital Few The vital few should be both urgent and important. High Vital Few Why are these  even on the list? Do we need to  focus on these  now? Urgency Why are we  working on  these? Low Important PROPRIETARY AND CONFIDENTIAL High 38
  39. 39. Determine "what is good enough" for the rest  2 o We all desire to achieve excellence, but the price of  excellence is often high ‐ sometimes very high.  ◦ Be practical, be real, and decide "what is good enough“ o In most business endeavors, achieving "good enough" on  time is far more important than attaining "greatness" that  misses the optimal window of opportunity.  ◦ Make trade‐off decisions early and quickly.  ◦ There is always a next phase PROPRIETARY AND CONFIDENTIAL 39
  40. 40. Determine "what is good enough" for the rest  2 o More important, for the entire “system” to work, the  complimentary pieces must work together.  ◦ But often, they do not need to be perfect o Finding the “good enough” components will reduce anxiety, workload, and buy time and resources to work  on the vital few PROPRIETARY AND CONFIDENTIAL 40
  41. 41. Establish good metrics and reward systems  3 o Business (and people) often achieve what they measure. But  determining the right metrics can be challenging? For  example: o Does your organization operate on a consistent  set of metrics, also known as key performance  indicators (KPIs)? ? ? ? o Do the metrics give you the ability to diagnose  and predict? o Are people and teams rewarded for the right  results and behaviors? PROPRIETARY AND CONFIDENTIAL 41
  42. 42. Establish good metrics and reward systems  3 o Organizations should critically challenge the current metrics  and make sure they measure the desired outcome. o In “Execution: The Discipline of Getting Things Done”,  Bossidy and Charan7, point out that rewards are pivotal in  motivating people towards achieving specific results. PROPRIETARY AND CONFIDENTIAL 42
  43. 43. Create an easy to understand  scoreboard 4 o People need to see how they are doing, and there is no better  motivator than making real progress on achieving   challenging goals o Therefore, all leaders need an easy to understand dashboard  that requires no more than 30 seconds for the followers to  check on their progress PROPRIETARY AND CONFIDENTIAL 43
  44. 44. Create an easy to understand  scoreboard 4 o The dashboard must be timely, relevant, and accurate. o Traffic signs – Red, Amber, Green Some of the  best  scoreboards  include: o Sport scoreboard – Soccer, Basket, Football, etc.  o Goal posts – revenue, profit, margin, market  share, net presenter score o Progress reports ‐ % completion PROPRIETARY AND CONFIDENTIAL 44
  45. 45. Develop a culture of accountability 5 o Accountability is accepting responsibility for a specific area of  focus and consciously striving to meet expectations of all  facets from strategy to execution o Creating a culture of accountability will be vital for the  sustainability of execution excellence PROPRIETARY AND CONFIDENTIAL 45
  46. 46. Develop a culture of accountability 5 o But for some organizations, establishing this culture can be  difficult.  ◦ Leaders should start on small but meaningful tasks, celebrate success when  achieved, and move the organization toward larger tasks and activities. o Once the rhythm of accomplishment is established, then take  opportunities to nurture them including applying the right  rewards and recognition.  ◦ Before long, the organization becomes a powerhouse of business execution. PROPRIETARY AND CONFIDENTIAL 46
  47. 47. Questions and Answers My interpretation: “Any questions?” PROPRIETARY AND CONFIDENTIAL 47
  48. 48. Contact Information o Email: o Phone: 201.688.0680 o Web: Management Consulting with A Social Conscience
  50. 50. Reference A: Important Competencies 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 Action oriented Ambiguity, deal with Approachability Boss relationships Business acumen Career ambition Caring about direct reports Comfort around higher management Command skills Compassion Composure Conflict management Confronting direct reports Creativity Customer focus Decision making, timely Decision quality Delegation Developing direct reports Directing others Diversity, managing Ethics and values Fairness to direct reports Functional/technical skills Hiring and staffing Humor Informing Innovation management Integrity and trust 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 Intellectual horsepower Interpersonal savvy Learning on the fly Listening Managerial courage Managing and measuring work Motivating others Negotiating Organization agility Organizing Paradox, dealing with Patience Peer relationships Perseverance Personal disclosure Personal learning Perspective Planning Political savvy Presentation skills Priority setting Problem solving Process management Results, drive for Self‐development Self‐knowledge Sizing up people Standing alone Strategic agility 59 60 61 62 63 64 65 66 67 68 69 Systems, managing through Teams, building effective Technical learning Time management TQM/Reengineering Understanding others Vision and purpose, managing Work/life balance Written communication Balancing Consultative Source: Career Architect  Development Planner, Lominger,  2002 Italics: PMO Advisory additions
  51. 51. Reference B: Book and articles mentioned 1. Robert Kaplan and David Norton, The Strategy‐Focused Organization, Harvard  Business School Press, 2001 2. Gary Harpst, Six Disciplines Execution Revolution, Six Disciplines Publishing, 2008,  as reported/found by Renaissance Solution Survey, 1996 3. "American Management Association and Human Resource Insitute survey, as  reported by Business Finance Magazine Newsletter, Issue 25, March 29, 2007" 4. "The Small Business Economy," U.S. Small Business Administration, 2010 5. Robert S. Kaplan and David P. Norton, The Execution Premium: Linking Strategy  to Operations for Competitive Advantage, Hardvard Business Press, Boston,  2008. Pg. 4, Figure 1‐1, summarzing BSCol Research, March 2006 6. http://www.itil‐ 7. Larry Bossidy and Ram Charan, Execution: The Discipline of Getting Things Done,  Crown Business, 2002 PROPRIETARY AND CONFIDENTIAL 51
  52. 52. Reference C: Recent books on Execution o The 4 Disciplines of Execution: The Secret To Getting Things Done, On Time, o o o o o o o o o o o With Excellence... by Stephen R. Covey and Chris McChesney (2012) Six Disciplines® Execution Revolution: Solving the One Business Problem That Makes Solving All Other Problems... by Gary Harpst (2008) Business Execution for RESULTS: A practical guide for leaders of small to midsized firms by Stephen Lynch (2013) Confronting Reality: Doing What Matters to Get Things Right by Larry Bossidy and Ram Charan (2004) Execution: The Discipline of Getting Things Done by Larry Bossidy, Ram Charan and Charles Burck (2002) The Execution Premium: Linking Strategy to Operations for Competitive Advantage by Robert S. Kaplan and David P. Norton (2008) Get It Done!: A Blueprint for Business Execution by Ralph Welborn and Vince Kasten (2005) Making Strategy Work: Leading Effective Execution and Change (2nd Edition) by Lawrence Hrebiniak (2013) The Other Side of Innovation: Solving the Execution Challenge (Harvard Business Review) by Vijay Govindarajan and Chris Trimble (2010) Ruthless Execution: What Business Leaders Do When Their Companies Hit the Wall (paperback) by Amir Hartman (Jul 19, 2003) Seven Strategy Questions: A Simple Approach for Better Execution by Robert Simons (2012) Strategy Execution Heroes: Business Strategy Implementation and Strategic Management Demystified (Expanded Edition) by Jeroen De Flander (2012) 52