Eight Critical Success Factors For Improving Strategy Execution – Part 4 of 4

This four-part article series has focused on exploring eight critical success factors related to improving strategy execution. In this final segment, Critical Success Factors (CSFs) #7 and #8 are discussed. These CSFs are tied to core values/cultural alignment and the need to balance both strategic and tactical elements into strategic plan prioritization.

CSF #7: Align the strategy and goals with the organization’s culture and core values

Strategic goals and organizational core values are both extremely important aspects any business, so overlooking the alignment of these elements is a serious mistake.

Strategic goals should define the outcomes the organization desires to accomplish in measurable terms.

Core values serve as the compass to help steer strategic decision making. Businesses should know what these values are and state them in no uncertain terms.

For example, suppose a core value of the organization is to respect employees and promote quality of life. Setting goals that are sure to drive employees into the ground by requiring punishing work schedules would a violation of that core value. Such a violation represents an alignment issue. While super-human feats may bring about short-term benefits, sustaining them over time is not realistic – therefore, no long-term advantages will be gained.

The core values of an organization are the foundation of the corporate culture. The system of core values that a business owns will shape the culture of the enterprise, the decision-making criteria of your managers and the actions of your employees. The more strongly defined the organization’s core values, the more likely that this value system will serve as a code of conduct that promotes and guides strategically-aligned behaviors within managers and employees.

As a side note, organizations with strong cultures rooted in shared core values tend to have much happier employees. Happier employees help businesses be more productive. In fact, there is empirical evidence from the Strategy Institute For Thought Leadership that suggests core values directly correlate with business performance. Indexed survey data related to core value perceptions and employee satisfaction can be viewed relative to business financial performance – all indexed in relative terms on a scale of one to ten for five different companies.

As the graph indicates, businesses with higher core value index scores outperformed those with lower core value index scores. Likewise, employee satisfaction was noticeably higher in those same organizations.

CSF #8: Do not overlook short-term organizational fixes that must be addressed in order for long-term success to occur

When strategic planning is done well, there will always be a tension existing between the tactical and the strategic. Both must be represented within the strategic plan in order for the programs comprised in the strategy to be realistic (and not be set aside or discovered to be impossible to implement during execution).

This tension represents a dichotomy that feels awkward and yet makes sense. There will always be tactical short-term work to be accomplished that sets the stage for the larger strategic initiatives. That is the conflict. Get the boring stuff done now, even though the entire organization is impatient to see more grandiose progress made and get on with longer-term strategic programs that must be implemented. The dusty dirt road must be paved in order to achieve the fast, smooth ride in the sports car – otherwise the trip will be slow, fraught with challenging conditions and be anything but smooth.

Think of the tactical elements of the plan as accomplishing deferred organizational maintenance, if that helps. What is the point of replacing the roof overhead if the walls are cracked and crumbling? As much as we try to stretch our limited resources, the fact remains that they’re still limited. Choosing to address tactical impediments (see Managing Assumptions, Risks and Impediments In Strategic Planning) to strategy implementation isn’t a negative thing; it merely reflects the fact that we must select the right opportunities (targeted outcomes) that will earn our limited energy and resources in some sort of logical sequence. Certain elements of our strategy are dependent on having organizational impediments addressed in order to pave the road for faster progress later on in the process.

Set Priorities

Prioritization is a fundamental component of the cognitive decision-making process and comes into play when selecting strategic priorities in business, based upon the outcomes that are sought through the organization’s strategy. As such, it is essential to have prioritization tools to draw upon in strategic planning and at our disposal for making routine business decisions. Prioritization goes hand-in-hand with understanding the relative value of each strategic opportunity and its associated outcomes that we have available to us to select from. Opportunity valuation removes bias from our decision making and prioritization combats the behavior of many organizations that bite off more than they can chew and suffer for it later.

A strategic prioritization process helps focus your resources and energy on your best opportunities and set the others aside for the time being.  In the face of competing corporate agendas, a strategic valuation and prioritization system is essential in selecting the right opportunities to pursue at this time and for providing justification for management’s choices. As such, prioritization is a vital part of an effective corporate planning process.

Suggested Background Reading:

1        The Inputs into a Strategic Prioritization Process

2        An Example: Applying A Strategic Prioritization Process

Recapping All Eight CSFs

CSF #1: Do a current-state analysis before jumping into future-state planning

A common mistake organizations make during strategic planning is that over jumping directly into planning for the future. The holistic understanding of the business ecosystem that comes from having conducted a current-state analysis first allows for strategic planning to optimize the shortest path to the future-state, once it has been defined. That path is dependent upon an understanding of the business’s core values, culture, value proposition, organizational value quadrants, org structure relative to culture and external competitive environment by line-of-business (including key players like customers, suppliers, partners and channel relationships). The comparison of the organizational profile to the challenges identified during this step result in the gap that serves as the basis for planning.

CSF #2: Engage Employees Across the Organization In Strategic Planning

Strategic planning requires “real” information related to questions like:

1. What is working well?
2. What is not working so well?
3. What are our organizational vulnerabilities?
4. Where are there untapped opportunities?

To get to this information straight from the source that knows it best, employees must be engaged in the strategic planning process as early as the current-state analysis.

CSF #3: Align strategy with mission, operational tactics and business processes

If organizations cannot succinctly explain what they do, how will their marketplace consumers understand it? An organization’s mission statement must be defined broadly enough to allow room to maneuver, yet be direct and purposeful in defining the market(s) served, the products and / or services provided by the firm and the distinguishing characteristics of those offerings.

Operations-level planning describes the tactics of execution, correlating strategy to action. Misalignment often occurs here, primarily because companies skip over operational planning altogether or do a poor job of paying attention to details. This activity has an important alignment to budgets, as it affects business process, resource plans, infrastructure and schedules that might have downstream consequences to sales, marketing and other functions.

CSF #4: Align strategic goals with metrics, measures

Closely linked to business process considerations are the metrics and measures of process effectiveness. Again, this relationship forces a close alignment with strategy – more specifically with the strategic goals related to the strategy. As described in Part-2 of the series, the relationship of strategic goals to metrics and measures can be tricky. Setting the wrong metrics might help accomplish one goal, but simultaneously compromise another.

CSF #5: Implement strategy governance and keep it simple

Governance and strategy are inexorably linked during planning and in the midst of execution – therefore alignment of these two business components is critical.  Governance must first exist, then it must be aligned to planning in order to build in realistic strategic expectations and to measurement cycles in order for real accountability to exist. These are required in strategic planning and strategy execution. Governance should address, at a minimum: master scheduling, metrics and measurements, plan rejuvenation, project planning and plan accountabilities.

Governance (including metrics, measuring and managing problems as they impede execution) is at the root of many strategy implementation issues. Too often, there is little follow-through to ensure that the strategic plan is fully executed.

CSF #6: Utilize a Change Management program throughout strategy implementation

There is a subtle reason responsible for the vast majority of organizational struggles with execution. It has to do with failing to properly manage change. That failure may be the result of not engaging employees in the planned transformation, from overly complex plans or changes that are introduced too quickly and ambitiously and therefore begin to unravel during execution. Once a strategic plan has been developed and approved, there should be communication occurring throughout the organization to inform employees of the strategy and what it means to the organization and to them personally. Strategies can fail simply because they don’t get communicated to all the people involved.

CSF #7: Align the strategy and goals with the organization’s culture and core values

The core values of an organization are the foundation of the corporate culture. Setting goals that are unrealistic and are sure to violate any core values represents an alignment issue.

Organizations with strong cultures rooted in shared core values tend to have much happier employees. The more strongly defined the organization’s core values, the more likely that this value system will serve as a code of conduct that promotes and guides strategically-aligned behaviors within managers and employees.

CSF #8: Do not overlook short-term organizational fixes that must be addressed in order for long-term success to occur

Both tactical and strategic programs must be represented within the strategy if the organization is to have realistic expectations of executing the strategic plan. Prioritization is a fundamental component of the planning process and comes into play when selecting strategic priorities in business, based upon the outcomes that are sought through the organization’s strategy. That can mean that tactical initiatives must be addressed first in order to address risks or remove impediments to the strategy.

Read the First Three Segments:

–  Eight Critical Success Factors For Improving Strategy Execution – Part 1

–  Eight Critical Success Factors For Improving Strategy Execution – Part 2

–  Eight Critical Success Factors For Improving Strategy Execution – Part 3

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Resources for Taking Action

Free Strategic Planning Article Compilations and PDFs:

1        Free access to the Strategic Planning Monthly: Archive

2        Free Online Strategic Planning Articles Library

3        Free Strategic Planning PDF Downloads

4        Information about Strategic Planning Learning and Development Programs

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