January 9, 2013
How do you make strategy development and execution more effective? As someone who facilitates lots of planning initiatives, I have some fairly strong opinions on this topic. My number one observation – strategic plan development is periodic but strategy development is every executive’s responsibility, every day.
They have the responsibility to know and understand the environmental and market factors that will have an impact on their organization – and to come up with adjustments to strategy that will continue their competitive advantage. This involves on-going executive team dialogue on strategy (for more on this, the article by Chris Bradley, Lowell Bryan, and Sven Smit, Managing the strategy journey, is a good read). The period for strategic plan development should be short – and the period for strategy development should be always.
I’ve noticed that many executive team members (both clinical and administrative) think that their job is to execute “the job at hand” and prefer to keep themselves at arm’s length from the messiness of strategy development. This is a situation that makes it difficult for an organization to respond promptly to changes in the market. For those executives, a new piece by Michael Birshan and Jayanti Kar, Becoming more strategic: Three tips for any executive, provides some pointers for the “strategy impaired” – focusing on enhancing their understanding of what strategy means in health and human services, developing the ability to recognize potential “disrupters” of business as usual, and improved “strategy.”
To facilitate your organization’s push to make every executive a “strategic thinker,” I have a couple other management practices to consider.
First, structured planning processes ensure rich thinking – but are not a replacement for thinking. I’m a big believer in using tried-and-true best practices for planning, including structured processes.
|Seven Key Activities To Move From Idea To Execution|
|Frame||1. Define decisions to be considered
2. Understand scope of potential solutions
3. Clarify rules that will govern work
|Baseline||1. Understand sources of value and past performance
2. Identify major changes in market and drivers
3. Analyze available capabilities
|Forecast||1. Identify emerging trends and implications
2. Isolate critical uncertainties
3. Develop realistic divergent scenarios
|Search||1. Establish and refine option set
2. Assess possible competitive responses
3. Evaluate options in given scenarios
|Choose||1. Decide where and how to compete
2. Determine what, if any, hedging
3. Create coherent package
|Commit||1. Develop action plans for selected options
2. Reallocate resources
3. Determine how to communicate changes
4. Delegate key jobs to pivotal roles
|Evolve||1. Execute agreed-upon action plans
2. Track ongoing progress
3. Determine revisions to be made
4. Determine when to compete
|McKinsey Quarterly, Managing the strategy journey|
We have numerous articles and presentations in the OPEN MINDS Industry Library that can provide advice on best practices in these processes:
Eight Steps to a Successful Strategic Plan all members
But process only takes an organization so far in planning. There is an intuitive “magic” in great strategy development – it’s part market knowledge, part management experience, and part risk-taking. No amount of process is going to substitute for executive judgment and courage.
Secondly, making decisions by the numbers is critical. Strategy may be intuitive, but execution is not. What is not measured won’t happen. And lack of performance metrics permits waste of precious resources – a situation that is less and less possible with razor-thin margins and intense competition for resources. Performance metrics should be used to guide strategy selection and create plans for strategy implementation.
Performance metrics are the fuel that allows every executive to be a strategist, and to shape the strategy while they are implementing it. (Or, more colloquially, “build the bicycle while riding it.”) For more on performance metrics, check out the presentation, Making The Most Of Your Performance Data With Metrics-Based Management, by OPEN MINDS Senior Associate, Joseph P. Naughton-Travers, Ed.M. at the 2013 OPEN MINDS Performance Management Institute, February 14 in Clearwater Beach, Florida.
Monica E. Oss
Chief Executive Officer, OPEN MINDS
For another free resource, see: The Tricky Path From Strategy To New Service all members
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