Strategic Business Execution Introduction

Introduction to Strategic Business ExecutionOCTOBER 19, 2013

o Prologue

o Importance of Strategic Business Execution

o Strategic Execution Framework◦ Value, Behavior, and Attitude◦ Important Competencies◦ Integrating Processes◦ Core Disciplines

o Five Rules of Business Execution

o Appendix

PROPRIETARY AND CONFIDENTIAL 2

Agenda


Prologue

My interpretation:“Having a great idea is only 1% of the effort, getting it done is the other 99%”

o By a show of hands, how many of you have too many ideas and not enough time to do something with them?

o How many of you work for organizations that also have the same situation – long on strategies and short on execution?


Two warm up questions…

Why is execution more difficult?


Reason 1: Execution is difficult and often too messy

◦ Projects, for example, can always be done cheaper, faster, better, and more inclusively.

◦ It’s nearly impossible to plan everything. As Molkte the Elder stated: “No plan survives contact with the enemy.”

Reason 2: Execution is a big and vague concept

◦ What is execution? It feels all pervasive.◦ We know good execution when we see it, but we rarely can describe it.

Reason 3: Execution is simply not sexy

◦ Students want to learn about strategy.◦ Academics are attracted to research on business strategy, strategy formulation, and strategic alignment.

◦ Strategy is exciting.

On Reason 1, a recent search on Amazon.com

o Execution (and like terms such as Implementation)◦ Hits: 379 + 1,860 = 2,238

o Strategy (and like terms such as Strategic)◦ Hits: 23,113 + 18,821 = 41,934

o “Strategy + Strategic” is 19xmore than “Execution + Implementation”

o The often incorrect perception is thatexecution = grunt work


But! What is strategy without execution?


How many companies have beautiful and often expensive

binders of ideas, plans, and strategies?

How many of them are well executed?

How often do you receive great sounding advice but it is incredibly

hard to achieve?

That’s because execution is more difficult

What is the value of a plan without results? Very little

Astonishing Findings


of well‐formulated strategies fail due to poor execution190%

of employees understand their corporate strategy25%

of executives think their company is very successful at executing its strategies, while 62% think they’re only moderately successful, or worse33%

In 2009, about 523k new businesses started, and nearly 661k businesses closed down.42009

Here are some recent books on business execution



Importance of Strategic Business Execution

My understanding:“Plan without action is worth little, and action without purpose is just waste.”

12

What do organizations do?

How much of this work is “execution‐related”? Answer: nearly everything

PROPRIETARY AND CONFIDENTIAL

Here is a simple framework

Activity Map of An Organization

Slide 13

Changing (PPP)Planning

Operating

Corporate Strategy

Corporate Structure

Corporate Integration

Mission, Vision & Culture

Business Strategy

Business Objectives

Financial Plan

Budgeting

Functional Strategies:Marketing

SalesProductIT…

Portfolio(Risk & Reward)

Program(Benefits)

Project(Deliverables)

Identify & Analyze:ID & CategorizeEvaluate & Select

Risk:ID & Analyze

Develop Risk Tolerance & Response

Govern:Prioritize & BalanceAuthorize & Adjust Communicate

Monitor & Control

Initiate Program

Plan Program:Benefits Management

StakeholderGovernance

ScopeScheduleFinance

Integration

Execute Program

Monitor & Control

Closing Program

Initiate Project

Plan Project:Scope

ScheduleCost

QualityHuman ResourcesCommunication

RiskProcurementIntegration

Execute Project

Monitor & Control

Closing Project

Operation Plan:Facility Plan

Production PlanContingency PlanningDisaster & Recovery

Service PlanMaterial PlanResource PlanTraining Plan

Quality ManagementCustomer Relationship

...

Operational Metrics & Reporting

Manage Operations

Continuous Improvement

Service Catalog

Multi‐Disciplinary• Organization Change Management• Organization Development

• Leadership• Incentives

• Business Process Change / Re‐engineering• Functional Leadership (e.g. IT, Finance, Student Affairs…)

• Communication• Control

What is the benefit of strategic business execution?


Things get done!They may not be perfect and there are trade‐offs.

But the alternative of not achieving results is often far worse…

What does research show?

Organizations with a formal strategy execution process outperform organizations without one


Do you have a formal strategy execution process in place?

YesYes NoNo

70% 27%Percent of companies who have achieved “breakthrough” results or performed better than peer group5

54% 46%


Strategic Business Execution Framework

My interpretation:

“Execution is never an accident; it is always the result of high intention, sincere effort, intelligent direction, skillful execution and the ability to see obstacles as opportunities.”

‐ Te Wu

What is strategic business execution (SBE)?

oSBE is an interdisciplinary practice of aligning strategic business objectives with implementation◦Practice is the pragmatic application of this body of interdisciplinary skills with the right behavior and attitude


Interdisciplinary refers to simultaneous application

of many schools of management such as

o Strategic planning

o Organization change and development

o Communication

o Portfolio, program, and project management

o Innovation and technology

What is strategic business execution (SBE)?

o Aligning refers to the process of continuous adjustment ensuring actions and planning are in agreement.

o Implementation refers to the methodical execution of the business objectives to achieve real and tangible benefits.


Strategic business objectives refers

o Establishment, prioritization, and resourcing of critical business and organization goals

o Both short‐term and long‐term

o That are essential to survival and growth.


In short, Strategic business execution is about

“doing the right thing”

in the “rightway”

Four Components

There are four components of SBE, each playing a vital role. Execution excellence is when these components work in tandem.


the intrinsic“software” of

individuals, teams, and companies

Value, behavior, and attitude

Important competencies

Core disciplines

Integrating processes

the essentialabilities (e.g. skills and expertise)

the basicmethods, systems, and

control

the unifying force that ties all these

components together

Four Components

Execution Excellence

Important Competencies

Core Disciplines

Value, Behavior, Attitude

Integrating Processes


Value, Behavior, and Attitude

This is the intrinsic software that operates at all levels (individual, team, organization, sector/industry, national, etc.)

Here are some execution oriented values, behaviors, and attitude:


o Industrious

o Resolution

o Integrity

Value ‐the moral principles

and beliefs

o Respect

o Teamwork

o Organization

Behavior ‐observable activities

o “Can do”

o Optimism

o Resiliency

Attitude ‐how a person views

something

Important Competencies

o Building on Career Architect Development Planner by Lominger, we identified 69individual competencies (many of which are applicable at a team or firm level).

o Many of these competencies are execution focused. These are my top 10:


For a complete listing of the 69 competencies, see Appendix C.

◦ Interpersonal savvy◦ Listening◦ Managerial courage◦ Motivating others◦ Problem solving

◦ Action oriented◦ Balancing◦ Conflict management◦ Decision making◦ Delegation

Integrating Processes

o Integrating processes are the basic unifying, workflow, and pre‐programmed steps that facilitate execution.

o The driving paradigm is to apply the right balance between system and flexibility that routinizes otherwise complex operations.

o Based on our experience, organizations must develop these 8 integrating processes and apply them judiciously across the firm:


◦ Governance◦ Planning and organizing◦ Issue and risk management ◦ Conflict management

◦ Change management◦ Information / Knowledge management◦ Dependency management◦ Business alignment


Core Disciplines

My interpretation:“To achieve execution excellence, businesses must apply the right disciplines to the problems at hand.”

Core Disciplines

o Disciplines are major subjects of collective knowledge, practices, and tools


For strategic business execution, our

experience shows there are nine core

disciplines

1. Strategic Planning

o For organizations to be successful, having a strategy plan that works is critical. Not only do strategic plans provide direction, they also align the entire organization toward achieving their plans.


We advocate strategic

planning that is

o Collaborative – bringing key players together to develop the plans

o Data driven – planning should be less emotional and more driven by external and internal data

o Realistic – evaluating the organization’s capabilities before jumping in

o Prioritized – focus on the essential and determine what will or would be “good enough”

2. Portfolio Management

o Organizations should manage their initiatives as investments using the relevant principles from portfolio management.


Key processes in Portfolio

Management

o Identify, categorize, evaluate, prioritize and authorize opportunities

o Identify risk, analyze, and develop risk response

o Balance and rebalance portfolio to reflect changes

o Communicate, monitor & control, and review portfolio performance

o Make adjustment when/if business strategies change

3. Program Management

o Program management focuses on the business benefits and the alignment of the various projects and components within the program


Performance domains in Program

Management

o Strategy alignment

o Governance

o Lifecycle Management

o Benefits management

o Stakeholder engagement

4. Project Management

o Project management focuses on completing deliverables under constraints such as schedule, resources/budget, scope, and quality. There are 10 knowledge areas.


Knowledge areas in PMI

PMBOK

1. Scope2. Schedule3. Budget4. Procurement5. Risk6. Quality7. Human Resources 8. Stakeholder9. Communication10. Integration

5. Project Management Office

o Project management offices (PMOs) are designed for highly intense and complex projects or operational environments.


Our PMO capability

model includes three

evolutionary stages

o Essential – focusing on tactical management and control

o Advanced – shifting toward greater intelligence and long‐term value

o Strategic – creating a value‐driven organization that strives toward deeper alignment with business strategy and goals

6. Operational Management

o For an organization to excel, it is imperative to create a stable and consistent operational environment. Otherwise, changes resulting from projects and programs would be built on a poor foundation.

o Operational considerations, as shown on earlier on Slide 13, are vast. One of the best frameworks available today is ITIL – Information Technology Infrastructure Library6 – and it is applicable for a wide variety of service industries.


ITIL Framework

o Service Strategyo Service Designo Service Transitiono Service Operationo Continual Service Improvement

7. Process Improvement

o A business process is a collection of related, structured activities or tasks that produce some desirable results


From our perspective,

organizations ought to have four types of

processes

o Management processes for planning and decision support

o Operational processes for managing the core business

o Changing processes for program and project change management

o Supporting processes for enabling the other functions of the organization

8. Organization Change Management

o Organization change management (OCM) is a framework for managing changes in organizations related to people, teams, and their relationships


Specific uses of OCM from tactical to strategic

o Business process and technology changes, requiring “adoption management”

o Organization restructure, focusing on “change navigation management” and “human capital management” including talent management

o Culture change, especially during mergers and acquisitions when two or more cultures often clash before integrating, requiring a high level of respect and sensitivity

o Vision, driving agreement and legitimacy to establish a common future

9. Data Visualization and Decision Support

o Today, executives and professionals are inundated with data. But unless data translates to information and information into knowledge, data by itself is often inadequate.


Visual communication is

more powerful than verbal

communication

o There is a big connection between seeing and remembering.

o Visual interpretations of information in the form of simple yet powerful diagrams, tables, graphs, charts or any other format that can convey the message of what “it means” without someone providing an explanation


Five Rules of Business Execution

My interpretation:“Read the five rules”

The Five Rules of Business Execution


1

2

3

4

5

Focus on the vital few

Determine "what is good enough" for the rest

Establish good metrics and reward systems

Create an easy to understand scoreboard

Develop a culture of accountability

Focus on the Vital Few

The vital few should be both urgent and important.


Urgen

cy

Important

High

Low High

1

Vital FewWhy are we working on these?

Do we need to focus on these

now?

Why are these even on the list?


o We all desire to achieve excellence, but the price of excellence is often high ‐ sometimes very high. ◦ Be practical, be real, and decide "what is good enough“

o In most business endeavors, achieving "good enough" on time is far more important than attaining "greatness" that misses the optimal window of opportunity. ◦ Make trade‐off decisions early and quickly. ◦ There is always a next phase


2


oMore important, for the entire “system” to work, the complimentary pieces must work together. ◦But often, they do not need to be perfect

o Finding the “good enough” components will reduceanxiety, workload, and buy time and resources to work on the vital few


2


o Business (and people) often achieve what they measure. But determining the right metrics can be challenging? For example:


3

? ? ?

o Does your organization operate on a consistent set of metrics, also known as key performance indicators (KPIs)?

o Do the metrics give you the ability to diagnose and predict?

o Are people and teams rewarded for the right results and behaviors?


o Organizations should critically challenge the current metrics and make sure they measure the desired outcome.

o In “Execution: The Discipline of Getting Things Done”, Bossidy and Charan7, point out that rewards are pivotal in motivating people towards achieving specific results.


3


o People need to see how they are doing, and there is no better motivator than making real progress on achieving challenging goals

o Therefore, all leaders need an easy to understand dashboard that requires no more than 30 seconds for the followers to check on their progress


4


o The dashboard must be timely, relevant, and accurate.


4

Some of the best

scoreboards include:

o Traffic signs – Red, Amber, Green

o Sport scoreboard – Soccer, Basket, Football, etc.

o Goal posts – revenue, profit, margin, market share, net presenter score

o Progress reports ‐ % completion


o Accountability is accepting responsibility for a specific area of focus and consciously striving to meet expectations of all facets from strategy to execution

o Creating a culture of accountability will be vital for the sustainability of execution excellence


5


o But for some organizations, establishing this culture can be difficult. ◦ Leaders should start on small but meaningful tasks, celebrate success when achieved, and move the organization toward larger tasks and activities.

o Once the rhythm of accomplishment is established, then take opportunities to nurture them including applying the right rewards and recognition. ◦ Before long, the organization becomes a powerhouse of business execution.


5


Questions and Answers

My interpretation:“Any questions?”

Contact Information

o Email: [email protected]

o Phone: 201.688.0680

o Web: www.pmoadvisory.com

Management Consulting with A Social Conscience

Appendix


Reference A: Important Competencies1 Action oriented2 Ambiguity, deal with3 Approachability4 Boss relationships5 Business acumen6 Career ambition7 Caring about direct reports8 Comfort around higher management9 Command skills10 Compassion11 Composure12 Conflict management13 Confronting direct reports14 Creativity15 Customer focus16 Decision making, timely17 Decision quality18 Delegation19 Developing direct reports20 Directing others21 Diversity, managing22 Ethics and values23 Fairness to direct reports24 Functional/technical skills25 Hiring and staffing26 Humor27 Informing28 Innovation management29 Integrity and trust

30 Intellectual horsepower31 Interpersonal savvy32 Learning on the fly33 Listening34 Managerial courage35 Managing and measuring work36 Motivating others37 Negotiating38 Organization agility39 Organizing40 Paradox, dealing with41 Patience42 Peer relationships43 Perseverance44 Personal disclosure45 Personal learning46 Perspective47 Planning48 Political savvy49 Presentation skills50 Priority setting51 Problem solving52 Process management53 Results, drive for54 Self‐development55 Self‐knowledge56 Sizing up people57 Standing alone58 Strategic agility

59 Systems, managing through60 Teams, building effective61 Technical learning62 Time management63 TQM/Reengineering64 Understanding others65 Vision and purpose, managing66 Work/life balance67 Written communication68 Balancing69 Consultative

Source: Career Architect Development Planner, Lominger, 2002

Italics: PMO Advisory additions

Reference B: Book and articles mentioned

1. Robert Kaplan and David Norton, The Strategy‐Focused Organization, Harvard Business School Press, 2001

2. Gary Harpst, Six Disciplines Execution Revolution, Six Disciplines Publishing, 2008, as reported/found by Renaissance Solution Survey, 1996

3. "American Management Association and Human Resource Insitute survey, as reported by Business Finance Magazine Newsletter, Issue 25, March 29, 2007"

4. "The Small Business Economy," U.S. Small Business Administration, 20105. Robert S. Kaplan and David P. Norton, The Execution Premium: Linking Strategy

to Operations for Competitive Advantage, Hardvard Business Press, Boston, 2008. Pg. 4, Figure 1‐1, summarzing BSCol Research, March 2006

6. http://www.itil‐officialsite.com/WhatisITIL.aspx7. Larry Bossidy and Ram Charan, Execution: The Discipline of Getting Things Done,

Crown Business, 2002


Reference C: Recent books on Executiono The 4 Disciplines of Execution: The Secret To Getting Things Done, On Time,

With Excellence... by Stephen R. Covey and Chris McChesney (2012)o Six Disciplines® Execution Revolution: Solving the One Business Problem

That Makes Solving All Other Problems... by Gary Harpst (2008)o Business Execution for RESULTS: A practical guide for leaders of small to mid-

sized firms by Stephen Lynch (2013)o Confronting Reality: Doing What Matters to Get Things Right by Larry Bossidy

and Ram Charan (2004)o Execution: The Discipline of Getting Things Done by Larry Bossidy, Ram Charan

and Charles Burck (2002)o The Execution Premium: Linking Strategy to Operations for Competitive

Advantage by Robert S. Kaplan and David P. Norton (2008)o Get It Done!: A Blueprint for Business Execution by Ralph Welborn and Vince

Kasten (2005)o Making Strategy Work: Leading Effective Execution and Change (2nd Edition) by

Lawrence Hrebiniak (2013)o The Other Side of Innovation: Solving the Execution Challenge (Harvard

Business Review) by Vijay Govindarajan and Chris Trimble (2010)o Ruthless Execution: What Business Leaders Do When Their Companies Hit the

Wall (paperback) by Amir Hartman (Jul 19, 2003)o Seven Strategy Questions: A Simple Approach for Better Execution by Robert

Simons (2012)o Strategy Execution Heroes: Business Strategy Implementation and Strategic

Management Demystified (Expanded Edition) by Jeroen De Flander (2012)52

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