The Imperative of Execution
MARCELO COSTA MSc / ASQ Certified Manager of Organizational Excellence
Execution is key to the performance of any business, and for a simple reason: what is planned, but not executed, remains a dream, and a dream does not generate results. However, execution should not be treated as a mere jargon, but the way through which a project, action plan or a whole strategy comes to life.
Execution is an integral and essential part of strategic management, which is not a synonym of strategic planning. Planning is the first of the two big phases of strategic management. The second phase, which is a stumbling block for several organizations, is execution. A Forbes article1 from 2012 is dedicated to the subject: “When we consider the strategy in whole, a minority of effort and resources is invested to develop a strategy (maybe 10%). The real work (maybe 90%) of the effort and resources is required to execute the strategy. Every year, billions of dollars are spent in the consulting industry on establishing a corporate strategy. Millions of hours of senior leadership time and attention will then be invested in the effort, but what investment is made in making certain that the organization is involved, aligned, and ready to make it happen? Something here is out of whack.”
In their bestseller Execution: The Discipline of Getting Things Done, Larry Bossidy and Ram Charan state that “When companies fail to deliver on their promises, the most frequent explanation is that the CEO’s strategy was wrong. But the strategy by itself is not often the cause. Strategies most often fail because they aren’t executed well.”
For executing a strategy, no matter the chosen method — Balanced Scorecard, The 4 Disciplines of Execution, Hoshin Kanri etc. –, SEVEN key elements need to be present:
KPIs
Measurement is a current practice in many organizations. However, measuring and giving importance solely to financial KPIs — which are outcomes, and tell only the end of the story — is commonplace. A truly effective performance measurement system must encompass financial, customer, process, people, learning, growth and innovation KPIs.
Targets
Every strategic objective must have an associated target. An objective without a target can’t be measured, and every objective needs to.
Measurement System (what gets measured gets done)
A good measurement system allows simple, quick and practical views of the execution performance based on dashboards. For dashboard structuring and design, I highly recommend Information Dashboard Design: Displaying Data for At-a-Glance Monitoring, by Stephen Few.
Skilled People
Hiring and training people, especially leaders, who understand the essentials and significance of execution is paramount. Bernardo Hees, the CEO of Kraft Heinz said in a 2015 interview: “I think it’s funny when we hire someone coming from an MBA who says he/she wants to work with strategy. I ask myself: what does that mean? At Heinz we only believe in strategy at execution.”
Discipline & Cadence
Discipline is vital for execution, much more than for planning. A strategic planning process usually takes place at a number of sessions in the course of a few weeks, and is usually steered by an internal or external facilitator. When someone is inattentive or not collaborating as expected, the facilitator acts.
Execution, on the other hand, demands the highest level of discipline, needed for the analysis of KPIs’ performance, finding the root causes of problems and acting upon them in a weekly or monthly frequency (cadence).
A wakeup call: if a strategy is not being periodically measured, analyzed and acted upon, it is not being executed!
Accountability & Consequences
According to an article from the Harvard Business Review2, “Accountability is about delivering on a commitment. It’s responsibility to an outcome, not just a set of tasks. It’s taking initiative with thoughtful, strategic follow-through.”
Regarding consequences and according to the same article, “If the person succeeded, you should reward them appropriately (acknowledgement, promotion, etc.). If they have not proven accountable and you are reasonably certain that you followed the steps above, then they are not a good fit for the role, and you should release them from it (change roles, fire them, etc.).”
Top Management Commitment
We all know that in the corporate world people pay attention to top management’s behavior and react accordingly. If the C-suite shows true commitment to the execution process, it will resonate throughout the organization, making clear that execution is top priority. The board also needs to play its part and according to the same Forbes article cited above, “While it is not the board’s role to get involved in the actual implementation of the strategy–that is clearly management’s function–it is the board’s responsibility to make certain that the leadership of the organization is approaching strategy implementation in a manner that will improve the organization’s chance for success.”
Execution is not a trivial task, but is of pivotal importance to any organization in the search of excellence. In this context, I think Paul Niven3 coined the ultimate phrase on translating strategy into action: “A strategic plan is worth little more than the paper on where it’s printed. What’s really vital is executing the plan”.
2. https://hbr.org/2008/06/the-secrets-to-successful-strategy-execution
3. Balanced Scorecard Evolution, Paul Niven, Wiley, 2014.
