Your CEO didn’t sleep well last night, but it isn’t the strategy that kept him or her up — they tossed and turned thinking about the organization’s ability (more likely, inability) to execute the strategy. After all, most CEOs don’t lose their jobs because they develop a bad strategy. They’re fired because the organization does not execute the strategy.
Execution is important in today’s age of acceleration, when changes in the market are moving like Moore’s Law in technology — shifting radically every 12 months or less. As a result, companies must shift their approaches/strategies to the markets even faster, making execution of the strategy a huge challenge.
In its most basic form, execution is fairly easy to understand. Larry Bossidy, former CEO of AlliedSignal (later Honeywell) described execution as “A wide-ranging discipline that connects business strategy to internal and external realities by linking together three key business processes: people, strategy, and operations.” Aligning strategy and operations is fairly fast and logical. The people factor, however, is slow, follows a different logic, and therefore becomes the biggest barrier to executing the strategy, especially when different strategies are coming fast and furious as the organization attempts to adjust to ongoing acceleration.
i4cp’s People-Profit Chain , a model built on the human capital KPIs that have the highest correlation to market performance, reinforces the need for strategy execution — and the people components that help align employees to the business strategy.
Based on i4cp’s research, following are five questions you should ask about your organization’s preparedness to align people faster to the strategy:
1. Is the strategy well thought out, clear, and easy to get across?
This means ensuring that everyone understands and buys into it. Follow the golden rule of execution: communicate, communicate, communicate, and when you think you’ve communicated enough, communicate some more.
2. Is a major part of the strategy firmly grounded in customer-centricity?
In this age of acceleration, the major force that will signal a movement in the market is the customer. In addition, it’s easier to explain and communicate the strategy when the major focus driving the strategy is external.
3. Is the strategy aligned with the culture?
The old maxim often attributed to the late Peter Drucker, that culture will eat strategy for breakfast, lunch, and dinner without proper alignment holds true. And the culture must be agile and resilient so it can absorb change and bounce back quickly.
4. Are leadership behaviors consistent with the behaviors needed to execute the strategy?
This is especially true for mid-level and first-level leaders. It turns out that the biggest barrier to execution is at this level. The main reason for this is that people become set in the ways they’re accustomed to doing their jobs. Change is difficult, especially when it requires translating the strategy into different ways of doing things.
5. Are everyone’s performance objectives aligned to the strategy?
While the traditional performance management process is undergoing examination or all-out transformation today, and many are questioning its usefulness altogether, it’s extremely important that employees understand how their day-to-day performance is important to the organization and the execution of the strategy.
More detailed recommendations and practical examples on how to align HR practices to the business strategy — and effectively enable strategy execution — will be made available later this year.
Jay Jamrog is a futurist, and co-founder of the Institute for Corporate Productivity.