Watershed Moments: How Managing Strategy Execution Improves Business Performance

Watershed Moments: How Managing Strategy Execution Improves Business Performance

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The next time a situation arises that dramatically alters your business environment, will you notice it? How quickly? Watershed moments in history have shaped our world and our view of it. The impact these changes have on our lives can seem to be a matter of chance. But in business, they are as much a matter of leadership and execution.

Everyday shifts in customer preferences, regulatory changes and other events create the potential for watershed moments in business. Successful organizations recognize the risks and opportunities that arise and then execute timely responses to capture new business. The next time a watershed moment comes along for your business (or a client’s business), who will notice? Will it be the CEO, someone several rungs down the ladder, or no-one at all?

At companies without formal strategy execution in place, as few as 8% of employees are even aware of the corporate strategy. It is not surprising then, that merely half of those companies will have achieved success in their last major change effort as compared to 97% of companies using strategy execution systems. Viewed from another perspective, while 70% of businesses with strategy execution systems consistently outperform their peers, only 27% of businesses without one do. Strategic success is 2-3 times more likely with formal strategy execution systems in place.

Strategy execution provides a framework for translating strategy into action by ensuring that the behaviors of employees at all levels of an organization are aligned with strategy. The key implication of this is that the system has to be implemented organization-wide and has to be used and understood by all employees if goal alignment and focused engagement are to be achieved. Measurement, combined with effective communication of information and ideas increases the likelihood and extent of success.

If employees lack a common purpose, motivation and coordination of efforts suffer. The organization’s leaders will not be present for every customer interaction. Leaders will not directly observe every environmental change in risks and opportunities. When aligned and engaged, employees and stakeholders provide invaluable resources for surveillance and response. To be effective in that role, employees must understand the direction in which they are heading. They must also be empowered with tools that provide ongoing feedback to discover what works so they can focus their efforts on doing more of it.

Research suggests that the majority of large firms are already utilizing strategy execution and performance management systems to achieve their alignment and engagement goals. Research performed by the BSC Collaborative suggest that of the firms not currently using the Balanced Scorecard (the most popular such framework), 43% are planning to utilize one soon and a further 48% are considering using one. It used to be the case that a lack of expertise and high upfront costs kept strategy execution software the domain of large businesses. Now, small and midsized business can access the same benefits as their large competitors at affordable rates.

By making better use of information they already have, businesses large and small can empower all stakeholders to execute their unified strategy, detect watershed moments in the business environment and achieve greater success.

What do you think? Does frontline staff have a role in seizing strategic opportunities? Let me know in the Comments.

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