Post by Patricia Hewitt, contributing Women On Business writer
Execution is one of the most difficult and important aspects of moving a company forward. Without continual improvement, new product and service launches, new marketing programs, and organization changes, companies don’t grow. This makes guiding the movement of strategies out of conference rooms and into the market one of the most important aspects of a leader’s job.
In my experience, while every company has its own strengths and weaknesses, there are a few fundamental reasons why company’s fail at strategy execution and over the course of the next few weeks, I’d like to explore them with you. This week, we’ll take a look at what makes a strategy, a strategy and explore the best way to get your most important initiatives launched on the right track.
Let’s start at the beginning and agree on what a strategy really is. Simply put – a strategy is not an idea or a concept or an opportunity or a trend. A strategy is a plan of action designed to achieve a major goal or objective.
For example, many of you are familiar with the Swedish company, Ikea. Consumers flock to their stores in order to purchase highly stylized, well-made, cool, and cheap home furnishings and accessories. The reason Ikea’s been so successful in delivering high quality/high design, low cost products to the market is that they begin with the price of an item. When their designers sit down to create a chair for instance, they decide they want to design a dining room chair that will sell for $59.00. Then, they go about designing the very best chair they can make for that price.
What’s unique about this approach is that other companies design a chair, figure out it costs $119, and then start stripping it down to get the cost to $59; resulting in a cheap, often badly made chair. In other words, the brilliant idea Ikea had was to begin with their goal (a specific price) and then work outwards. Sounds simple, right?
In order to take Ikea’s method into your boardroom, you have to begin where you want to end up. The “end” may be increased revenue, decreased cost, entering a new market, building a more competitive product, or any number of other strategic goals. The point is to start with a defined goal. And this is the first mistake I see many companies make as they consider strategic initiatives. Using Ikea’s example, the company shouldn’t begin any design (planning) work until they have agreed upon their product’s price (goal).
How did your last strategic planning session go? Tell me if this sounds familiar –You sit in a conference room arguing over twenty different ideas, five market research reports, the sales impact of operating in a highly competitive market, the president outlines his/her demands, a hundred and forty two managers have their opinions and are protecting six different organizational territories, there’s at least one outside business consultant and finally, reluctantly everyone (kind of) agrees that initiative A, B, and C may be worthwhile. This leads to more ideas, to more discussion, and more analysis often resulting in no strategies, fuzzy strategies or worse, more strategy meetings and now – what exactly are you planning?
Here’s the point – discussing ideas is not planning, in the same way, as a strategy is not an idea. Before scheduling your next strategic planning session, consider whether you and your leadership team know what your specific goals are going in. If you don’t, then take a step back and undertake an Opportunity Analysis (OA) first. An OA is made up of some or all of the following: staff ideas, research, consultant opinions, and market information. Next, you undertake a vetting process with your leadership team. This is where ideas are tested, impacts are considered, and data is analyzed. If done correctly, the strategies you need to be successful will emerge and consensus will be formed that create the goals that are fed into the strategic planning process. Now you’re ready to begin designing that $59 chair because your leadership team knows that $59 is the right price.
In summary, the first step towards successful strategy execution is figuring out where you want to arrive when the trip is over. This doesn’t require planning; it requires analysis, so next week we’ll talk about analysis paralysis and making sure your first step isn’t your last.