2. Today’s Presentation
2
• Challenges to deploying strategy
• Best practice principles and methods
• Improving execution and mitigating risk
through software
4. A Metaphor
4
• A predictable, interconnected system
• Constant performance in near to long
term
• Minimal environmental interaction
• Driven by initial design
• An interconnected living system
• Uncertain performance in mid to long
term
• High interaction with environmental
factors
• Driven by adaptation
Source: quarterly.insigniam.com
5. Transforming the business while running it…at scale
A common, fundamental challenge for large global enterprises
“…over 66% of
companies with over
$500M in revenue set
targets that exceeded
9% real growth, yet less
than one company in
ten has achieved this
level of success.”
Chris Zook, Harvard Business
Review
“In the majority of
cases – we estimate
70% - the problem isn’t
bad strategy but…bad
execution.”
Fortune Magazine
“90% of
organizations fail to
execute their
strategy.”
David Norton, Balanced
Scorecard Report
Daily
Management
Breakthrough
Management
PDCA
Cycle
Run and
Improve
Transform
5
11. Number of
Breakthrough
objectives
2-3 4-10 10-20
Number of
Resulting action plans
32-48 64-160 176-320
Number of
breakthroughs
successfully achieved
2-3 1-2 0
11
Relentless Focus
18. Executive Dashboard for Strategy Execution
18
Track performance of key
planning and delivery success
indicators
Monitor weighted factors
that contribute to key
success indicators
Measure progress with
unique strategic planning and
execution visualizations
Advisor
20. Contributors have an intuitive finger on the pulse
Cadence based
reminders for
monthly updates
View and
Update metrics
Add commentary to
support or explain
RAG status
20
Pulse
21. Today’s Presentation
21
• Challenges to deploying strategy
• Methods to increase success
• Improving execution and mitigating risk
through software
Introduce myself
Variety of topics here; focus on the execution of your strategy
MBO
4DX
Balanced Scorecards
OGSM
OKR
Hoshin
Ask audience to interact, ask questions
Executives account for neither how their business environments are already evolving nor for the impact of their own organization on the marketplace.
Clock is mechanical - produces a predictable result from one second to the next. A clock keeps time whether it is spring or summer; if it is running and in good repair, it is completely predictable.
Beehive is a living system - bees work toward what seems to be a common goal. The queen bee does not direct the hive; the rules contained in each individual bee direct the hive. Action at the level of the entire hive has a very short prediction horizon. What will happen in one minute is fairly predictable, but action in the hive next week is unpredictable. A beehive is a prime example of a complex adaptive system, and it is nothing at all like a mechanical clockworks.
When dealing with complex adaptive systems, the extent to which plans are contingent on very specific predictions is the extent to which we are vulnerable to what, in fact, are inevitable surprises. And certainly a successful enterprise of any significant size is a complex adaptive system, as are virtually all marketplaces.
Tyson quote - “Everybody has a plan until they get punched in the mouth.” The impact from a punch—from a competitor, from customers or even from employees who execute in less- than-predictable ways—is complexity in action.
Can any of us here relate
Based on a Gartner Survey
80% of strategies are taking on Business Model Transformation, only 13% is optimization.
Consequently the same percentage of companies are seeing more firmwide initiatives than 3 years ago
What does this mean?
High volume of high stakes change leads to difficulty in:
Managing progress with any level of control
Understand interrelationships
Changing direction when needed
As well as elevated competition with the day job
Almost half of the organizations are cascading strategic decisions beyond senior leadership
Common challenges with Distributed Execution Decisions
More decision makers can introduce misalignment
Harder to pinpoint source of execution failures
(Blockbuster)
Blockbuster was reimagined as a convenience store.
“Having contentious directors was a nightmare; as management, we spent much of our time justifying everything we did. One of them had a bunch of ideas, such as putting greeting cards in the stores, carrying adult movies, and making a deal with Barnes & Noble to add a book section. Mostly, though, they questioned our strategy, which focused on growing an online business and finding new ways to satisfy customers, like getting rid of late fees. We presented data demonstrating that franchisees that had dropped late fees were outperforming those that retained them, but they remained unmoved. They wanted us to reinstate late fees, which would have been a disaster—as apparently it was when they were reinstated after my departure.
Reliance on a significantly broader population of the workforce to execute strategic goals introduces challenges:
A dramatic increase in decision makers
Aligning to common goals
Establishing accountability for goal delivery
Provide meaningful information for all levels of decision making
Common challenges with Executing Under Uncertainty
Environmental uncertainty means your original plan is going to need to change:
Performance management of goals vs project management of initiatives
Operational mindset to change
Rapid course correction in scope or schedule
Decision making in days not months
Relentless Focus
Alignment & Accountability
Early Adjustment
Clarity of Thought
Real time Visibility
Reflection
Focus on Relentless Focus and Early Adjustment
NASA (National Aeronautics and Space Administration) was created in 1958 with the mission to establish 'superior technology' to 'achieve preeminence in space' and to 'advance science,’.
NASA story: 1960 - 50 funded projects - Only 3 were focused on the first step towards manned moon landing…
President Kennedy - 1961 “the goal, before this decade is out, of landing a man on the moon and returning him safely to the earth by the end of the decade.
Point is about the clarity and emotional engagement… created massive focus… 90% of the budget for NASA went on 1 funded program (the Apollo program) and the annual budget was 10x larger in the 60s than it was in the 50s.
Slide above is taken from live i-nexus customers… shows the effect over 2 years in term sof how many top ;level objectives where actually achieved when the focus is greater.
Early adjustment
Another metaphor for businesses. Most feel like tanker when they want the agility of a speed boat.
In large complex organizations, that speed is difficult to implement do to complexities we discussed earlier. You need to respond to data and make changes early to shift the direction of the organization.
Include in Reflection - were the assumptions correct
All businesses face the same challenges. Customer expectations, changing market conditions, commitments to shareholders.
To deliver on these commitments and thrive, these businesses must balance running the day to day, implement those bottom-up lean or six sigma improvement activities, drive the top down large transformational initiatives and set out and achieve long term goals. This is incredibly hard.
When we talk to senior leaders for large global organizations their challenge, their fear is that can't answer the question “Is my strategy on target”/”Will I deliver my strategy”.
We take a 4 discipline perspective to building out and execution plan and managing that plan.
Plan - Cascading that strategy with objectives that are aligned throughout the organization.
Provide a clear view of how those goals align to the top level objectives
Target - Setting clear, targets/metrics to those objectives.
Deliver - Identifying the top down and bottom up initiatives that will achiever those targets
Lastly, Managing the governance of all the activities.
Monitor performance and reacting accordingly
Magellan - accountant omitted a minus sign on a net capital loss of $1.3 billion and incorrectly treated it as a net capital gain on this separate spreadsheet. This meant that the dividend estimate spreadsheet was off by $2.6 billion..."
Benefits
Outcomes Expected & Accelerate Delivery: - Driving core principles through tools
Clear accountability of leaders and staff to KPI performance, process and strategic goal delivery
The scale and complexity involved means course correction is inevitable
Leadership insight and decision making through improved visibility of the facts.
Joining up the views of performance and capacity through the differing lenses of Run, Improve & Transform
Rapid surfacing of issues, escalation and delivery of mitigation.
Reduction in NVA
Automate the collation and reporting of initiative progress and KPI data.
Automated scheduled reminders for progress updates and any manual KPI entry.
Integrated commentary and exception reporting No PowerPoint completion
A platform should focus on three areas -
Leadership insight - clarity of the overall picture of the strategy and where to focus attention
Practitioner core tools, regardless of the strategy methodology, giving those responsible for managing the cascade of objectives and the activities reliable tools. Excel doesn't cut it
Then lastly, giving casual users easy to use interfaces to update information without interfering with their day to day jobs
Leadership Information Needs to:
Be simple and easy to consume across any device
Enable management by exception
Be trusted (quantitative and qualitative)
Mined if needed (without logging on)
Core Practitioner needs easy to use tools to drive the strategic methodology:
Be easy to cascade objectives and metrics
Assign ownership of objectives and initiatives
Reinforce the “drum beat” of the organization by automating reporting and updates
Drive projects at all complexity levels at every level of the strategy cascade
Contributor Input Needs to:
Be simple and easy to enter through any device
Be driven by the “drum beat” of governance
Be tailored to the goals, initiatives and KPIs owned by each individual
Reinforce an appropriate rigour that can vary across the organisation
