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3 Secrets of Successful Execution Webinar

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3 Secrets of Successful Execution Webinar

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  1. 3 SECRETS OF SUCCESSFUL STRATEGY EXECUTION Paul Docherty – Founder and Executive Director, i-nexus

  2. 1 2 3 4 5 6 7 KEY TOPICS Why is Strategy Execution the #1 CEO Priority? Why is Strategy Execution Difficult? What Are the 3 Secrets to Executing Well? 1. Stay Focused – Reinforce The Right Behaviors 2. Close the Loop – View Planning/Execution as an Integrated Process 3. Follow-up Relentlessly – Leverage Strategy Execution Software Summary/Key “Take-aways” Copyright i-nexus 2013. All rights reserved.

  3. GOOD STRATEGY IS NOT ENOUGH… Good Strategy x Good Execution = Superior Results Good execution is the critical determinant of superior results • You can beat expectations with good execution of a mediocre strategy • But... • You can miss expectations with poor execution of a brilliant strategy

  4. WHILST MANY ORGANISATIONS CRAFT GREAT STRATEGIES, FEW EXCUTE WELL… “70% of companies believe they select the right business strategy, but fail to execute it due to short-comings in their management system” – Accenture Report “In the majority of cases – we estimate 70% - the problem isn’t bad strategy but … bad execution” – Fortune Magazine “ex-e-cu-tion (ek si kyoo shun), n 1. The missing link. 2. The main reason companies fall short of their promises. 3. The gap between what a company’s leaders want to achieve and the ability of their organisations to deliver it…” – Larry Bossidy and Ram Charan, Execution: The discipline of getting things done “…only 11% of companies employ a fully fledged strategic control system” – Ashridge Strategic Management Centre “… over 66% companies with over $500M in revenue set targets that exceeded 9% real growth, yet less than one company in ten achieved this level of success.” – Chris Zook, Havard Business Review “90% of organisations fail to execute their strategy” – David Norton, Balanced Scorecard Report

  5. THE CEO PERSPECTIVE… i-nexus Solves a Big Problem Execution is the #1 CEO Priority • What do CEO’s care most about? • Profit Growth? • Revenue Growth? • Customer Satisfaction? • Quality? • Key Execution Problems – CEO Perspective • Poorly Communicated Strategy • Unclear Accountability • Poorly Defined Roles/Responsibilities • Inadequate Execution and Performance Monitoring

  6. THERE ARE SEVERAL UNDERLYING CHALLENGES… Current Approaches and Tools Simply Don’t Work... Urgent vs. Important Problem 10% Problem Senior Management Goals Performance Reporting Process Goal Cascade Process Underlying Challenges: Ensuring Alignment and Accountability Maintaining Focus in the Whirlwind Looking Ahead – Not Behind Rearview Mirror Problem Operational Management Goals/Action Plans Operational Management Review Execution

  7. THE EVIDENCE BACKS-UP THESE HYPOTHESES … Some interesting numbers... Help shine a light on the root causes of poor execution... “<15% of companies routinely track how they perform over how they thought they were going to perform” Marakon Associates/Economist Intelligence Unit “95% Employees don’t understand their companies strategy” Kaplan and Norton, Harvard Business Report “<27% employees have access to their company’s strategic plan” Kaplan and Norton, Harvard Business Report “86% of executive teams spend less than one hour a month reviewing strategy” Kaplan and Norton, Harvard Business Report “70% of organisations do not link middle management incentives to strategy” Kaplan and Norton, Harvard Business Report

  8. Grow Sales of New Product • Customer Focus • Invest in China • Improve employee satisfaction STRATEGY EXECUTION - WHAT HAPPENS IN REALITY… The Off-site Strategy Day The Ivory Tower Exercise Divisional President Poorly Defined Goals  .ppt deck      Unclear Accountabilities Functional Heads        The Ad Hoc Cascade Give me your numbers... Way too much! Cut by 25%! It’s close enough for Military work... Departmental Heads       Project Project The Budget Dance Project Middle Managers Projects      Funding Constraints Employees I need to include some contingency... If I don’t include it I’ll lose it...

  9. VALUE OF AN EFFECTIVE EXECUTION SYSTEM - IMPACT OF THE DANAHER BUSINESS SYSTEM

  10. 3 SECRETS TO SUCCESSFUL EXECUTION… • STAY FOCUSED • FOCUS ON 1-3 BREAKTHROUGH/WILDLY IMPORTANT GOALS ONLY • Actively decide what not to do, not just what to do • Ensure there is absolute goal clarity – make sure the finish line is clear • Ensure every employee understands what winning means • CLOSE THE LOOP • LOOK FORWARD, NOT JUST BACKWARD, ON AN REGULAR BASIS • View planning and execution as an integrated process • Define the leading measures that predict achievement of the goals • Set targets based on expected impact of actions and review progress periodically • Continually test assumptions and act quickly if hypothesis is wrong • FOLLOW-UP RELENTLESSLY • USE STRATEGY EXECUTION SOFTWARE TO DRIVE RELENTLESS FOLLOW-UP • Ensure every employee can easily see, understand and update their progress against the plan • Leverage automated exception reporting to reinforce ‘monthly’ heartbeat • Create focus on action by taking the ‘heavy lifting’ out of preparing for execution reviews • Create accountability for results through clarity and transparency

  11. STAY FOCUSED – THE CONFLICTING FORCES… The Whirlwind Goals or The Day Job New Activities URGENT IMPORTANT

  12. STAY FOCUSED – AVOID THE URGENT NOT IMPORTANT TRAP 70% 10% URGENT NOT IMPORTANT URGENT AND IMPORTANT HIGH URGENT NOT URGENT NOT IMPORTANT IMPORTANT NOT URGENT LOW 5% 15% LOW HIGH IMPORTANT

  13. STAY FOCUSED – CREATING CLARITY AND FOCUS Less Structure More Structure Hoshin Kanri Planning Tables/X-matrices Kaplan & Norton BSC Strategy Maps/BSC FranklinCovey 4DX Wildly Important Goals 2-3 Breakthrough Objectives 1-2 WIGs From X to Y by When LAGGING MEASURE LEADING MEASURE LEADING MEASURE

  14. CLOSETHE LOOP – CHANGE VS. RUN THE BUSINESS CHANGE THE BUSINESS RUN THE BUSINESS

  15. CLOSE THE LOOP – WHAT’S THE REAL QUESTION? Translate Business Goals into Executable Initiatives and Create Clear Accountability for Delivery Goals Initiatives Indicators Are we on track? If we are not on track – are we doing something about it? In aggregate, will the actions underway get us where we want to go? Action Insight CLOSED-LOOP STRATEGY EXECUTION CYCLE Measure and Forecast the Impact of Those Initiatives on Performance Drive and Review Execution of The Resulting Initiatives Impact

  16. CLOSETHE LOOP – HOSHIN AS BEST PRACTICE 1. Establish Vision Hoshin Process in Concept Develop 3-5 Year Breakthrough Objectives 2. Catch-ball Planning Develop Annual Objectives 3. Deploy Annual Objectives 4. P 5. Implement Annual Objectives D C 6. Monthly Review A Reflection 7. Annual Review

  17. CLOSETHE LOOP – HOSHIN BOWLING CHARTS/ COUNTERMEASURES Are we likely to hit the future targets? Bowling Chart If not, why not? What’s the root cause and what can we do about it – short and long term? Countermeasure Plan

  18. RELENTLESS FOLLOW-UP – ESTABLISHING AN EXECUTION HEART BEAT Monthly Business Execution Review Meeting Monthly Business Execution Review Meeting Instigate actions to maintain momentum / lift performance Make sure its right Add commentary and identify local actions Update previous month’s actuals T F M T W T F M T W T W W Week 4 Week 1 Week 2 Week 3 Week 4 F M T M T W T T F F M M T T W W T T F F M M T T W W T T F M T W W T F M T W T F T F M T W T F M T W T T F M T W T F Month 1 Month 2

  19. RELENTLESS FOLLOW-UP - EXISTING PROCESSES AND TOOLS MAKE FOLLOW-UP CHALLENGING…. (Re)Define Strategic Goals Cascade Goals/ Develop Plans Key Goals for 20XX Review and Analyse Performance Presentation Decks/ Spreadsheets Spreadsheets/ Documents BI Tools/ Spreadsheets HR/Talent Management System ERP System Project Management Tools/ Spreadsheets/E-mail Set Personal Objectives/ Develop Action Plans Run the Operation Execute the Actions © i-solutions Global Ltd. 2007

  20. RELENTLESS FOLLOW-UP – A NEW BREED OF CLOUD-BASED STRATEGY EXECUTION SOFTWARE IS EMERGING… Solving this problem disrupts three big software markets... • Size: $2.2Bn/CAGR 15% (Bersin) • Primary Buyer: HR • Management and Automation of Employee Goal Cascade Process • Talent Management “The fundamental problem with traditional performance management software is that it fails to close the loop – it helps you identify the action to take but doesn’t help you understand if the action you have taken has had any effect.” Martin Butler, CEO, Butler Research “Business Execution software is emerging as the answer to two questions - how are we as an organisation going to do that? And how does it specifically apply to me? Business Execution software brings together people, projects and corporate performance into a single system.” Bruce Richardson, Chief Research Officer, AMR Research EMPLOYEE PERFORMANCE MANAGEMENT PROJECT PORTFOLIO MANAGEMENT CORPORATE PERFORMANCE MANAGEMENT Translate Business Goals into Executable Actions and Create Clear Accountability for Delivery Action Insight • Size: $1.9Bn/CAGR 28% (Gartner) • Primary Buyer: Finance • Tracking and Forecasting of Financial Performance • Tracking of Key Performance Indicators • Size: $1.1Bn/CAGR 9% (IDC) • Primary Buyer: Operations • Planning and Execution of Projects and Programs • Optimisation of Project Portfolios STRATEGY EXECUTION SOFTWARE Measure and Forecast the Impact of Those Actions on Performance Drive and Review Execution of Those Actions Impact

  21. RELENTLESS FOLLOW-UP – A NEW BREED OF CLOUD-BASED STRATEGY EXECUTION SOFTWARE IS EMERGING… STRATEGY EXECUTIONSOFTWARE • Translate business goals into executable actions; • Tie in the people who need to execute those actions; • Drive and monitor execution of those actions; • Understand if the actions are actually moving, or are likely to move, the dials that measure achievement of business goals. Strategy Execution Software – helps you to:

  22. RELENTLESS FOLLOW-UP – THE RIGHT STRATEGY EXECUTION SOFTWARE CAN ACTIVELY DRIVE “FOLLOW-UP” Are My Team On Track? Reminder – Time to Focus on the Important! What Actions Are We Taking and Are We Doing Enough? Where Do We Need to Focus Our Attention?

  23. 1 2 3 4 5 6 7 SUMMARY – KEY POINTS Strategy Execution is the #1 CXO Priority Current Fragmented Approach Makes Strategy Execution Difficult Success is Function of Right Behaviors, Right Process and Right Tool Focus Requires Tough Choices, Catch-ball and Absolute Clarity The Key is to Look Forward, Not Backward and Course-correct Early Strategy Execution Software Makes Follow-up a Realistic Proposition Stay Focused, Close the Loop and Follow-up Relentlessly! Copyright i-nexus 2013. All rights reserved.

  24. COMPANIES USING HOSHIN TODAY

  25. ANY QUESTIONS? Paul Docherty paul.docherty@i-nexus.com Skype: pauldocherty +44 (0) 7985 117784 For a copy of the slides please contact: richard.valentine@i-nexus.com Patrick Pecorilli ppecorilli@virtual-process.com Skype: patrick.pecorilli +1 514-816-0618

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