As a CEO, you know that a good strategy that is well executed has the ability to impact a market, competitive position or business model. Yet many companies lack the processes and leadership needed to ensure a strategy achieves the desired results. Failure is expensive and wastes precious resources, so what causes execution to go wrong?
Two common causes: lack of communication and shifting focus of the strategy. Forbes Insights has conducted studies on why strategic plans fail and has found that almost all CEOs say “communications is critical to the success of their strategic initiatives and that strategic initiatives often fail due to a lack of understanding, commitment and follow-through by key stakeholders.”
According to KPMG, 96% of global businesses are undergoing transformation that requires them to alter strategies and embrace change. Execution requires that your organization be able to mobilize both people and resources and to synchronize itself to ensure the right products get to the right customers at the right time. Synchronization is not easy. It can involve reconfiguring supply chains, increasing knowledge of numerous foreign markets, addressing cost structure and much more. Communicating the plan to all the people involved and securing their support are critical to success. But it’s common for organizations to resist change.
Managing change and addressing the resistance are important steps. Once the plan is decided upon, the infrastructure and processes are put in place to support it, and the organization is on-board, it all comes down to mobilization and follow-through.
Companies who invest in putting the right people in place to get the right things done and emphasize process deliver the best results. Companies that combine attention to process with executive development tend to deliver the best return to shareholders. We like the four steps outlined by experts at Wharton that any company can take to improve the odds of execution success:
- Develop a model for execution.You can adopt Michael Porter’s theory of comparative advantage, William Sharpe’s capital asset pricing model, or some other model. The important point is to have a model that defines the critical variables to support successful implementation of the plan.
- Choose the right metrics.Without a doubt, sales and market share are going to continue to be the dominant metrics of business, but there are additional metrics that are critical to monitoring performance and success. Marketing is given money to invest on behalf of the organization. The leadership team wants to know how this money is helping the organization achieve more of something, faster, and less expensively then if that money were directed somewhere else. Use these mandates to guide your metrics selection. For example, speed to penetrating new markets as a way of understanding marketing’s impact on achieving something faster.
- Keep the plan center stage.Once you’ve earned internal and stakeholder buy-in, initiate a formal process that will keep the team engaged and focused. Meetings between the executive team and unit managers should be regular and ongoing and they should foster collaboration, dialogue, and problem resolution in order to maintain momentum. It’s one thing to have a strategic plan, it’s another to have an operational and marketing plan. Make sure each key function within your organization has a plan and that plan is aligned to the business outcomes needed to achieve the strategy. Your marketing plan is more than a list of activities. It is THE essential ingredient for finding, keeping, and growing the value of customers. serves as a blueprint that guides a firm’s course of action. A good marketing plan should include at least a clear set of quantifiable objectives and a set of strategies, tactics, and milestones that support the objectives. Organizations without marketing plans suffer from long sales cycles, weak pipelines, and customer churn. Today, many companies have come to realize that, without a plan, they may be engaged in various activities, but not necessarily moving forward.
Winners realize not only that an approved plan matters, but the timing of the plan is just as important. A plan approved halfway through the year impedes a winner’s ability to make a sufficient impact on the year. In reviewing many plans, one item that distinguishes the winners is the inclusion of a compelling positioning platform. A well-developed positioning platform clarifies why people should buy from you and how you are better and different from the competitors they could just as easily select. Developing a positioning platform requires you to understand your target, their problems and their needs, and then to position your offer purposefully to meet these needs.
- Assess performance frequently.Annual reviews don’t allow the organization to make necessary adjustments. Assess the performance frequently to secure real-time feedback on the quality of execution down the line. Studies continue to indicate that less than 15% of companies routinely track how well they performed in comparison to their targeted performance. The first year’s goals may be measured because they are often tied to bonus thresholds, it’s the follow through that tends to slip.
Resource Your Strategy
Having a plan is a good first step, but without adequate resources, people and funding, achieving a plan is as realistic as wishing on a star. Having a stable budget that is really committed to the strategy enables the organization to operate on a long-term basis, rather than just day to day. Companies have come to realize that the saying “show me the money” has meaning even for marketers. So remember, winners have an adequate budget.
Clearly Define What Designates Success
How do you know whether to open that case of champagne and declare success? Success must be more than a sales and/or revenue target. It’s possible to achieve sales and revenue targets and still fail at the strategy. Be clear about how you will measure the success of your strategy.
The opposite is true as well. It’s possible for a strategy to be working but the sales numbers to be lagging. Without clear measures and metrics for how to measure the success of the strategy, your team is operating blindly. Some possible ways to measure strategic success include rate of organic growth, increases in market share, and upticks in customer equity.
Identify how you will measure the success of the strategy at the start and make sure each operational plan has a set of measurable objectives and activities are tied directly to these performance targets. For Marketing, examples of metrics might be share of preference and win rate.
Winners recognize that their job includes increasing the value of their company to all the stakeholders. The operational plans incorporate objectives, strategies, and tactics designed for this purpose. Winners, both the marketers and the executives within the company, realize they have a responsibility to the strategic success of their companies. They realize that the cornerstones of strategic success include having a blueprint, budget, resources, and clearly defined metric targets.
© 2017, Laura Patterson. All rights reserved.