Based on his experience, Rahul Bhargava shares five powerful learnings to become a better management professional. The article offers deep insights into why ‘the best’ strategies are easier developed than implemented & executed.
“What matters more – great strategy or great execution?” I read these lines in a recent article that makes a case in favor of a disruptive strategy in the Digital age. While the inference could be true for Digital Strategy, I wondered about this in the context of the work we have done. While I may not have the answer to what matters more based on that, I do have 5 powerful learnings to become a better management professional, as I further work with my clients.
Over almost a decade and a half, I have worked with diverse organisations – Fortune 100 enterprises, mid-market firms, start-ups and not-for-profits in multiple countries. Many of these engagements focused on helping the client develop the Strategy – to double the growth rate, to increase market share and/or position in the market, to achieve their 5-years goals, to create success in a new market or to transform after an event such as a merger. Few of these engagements also gave me the opportunity to follow-through the process after the development phase. This helped me gain insights on why ‘the best’ (as some clients prefer calling) strategies are easier developed than implemented & executed.
For the purpose of this article, the phase I am reflecting consists of implementation as well as execution (difference between the 2 is articulated here). Accounting for the variables such as size of the organisation, country and sector, there are 5 learnings that I think I could apply in most of the organisations I have worked with.
- Strength and depth of Ownership & commitment: How many people in your organisation totally believe in & are clear about the corporate strategy? I always felt that this matters a lot for success in implementation, but since it is not measured (or seen as measurable), it is not prioritised enough for continuous focus. Think of the last time you achieved something really difficult that required execution over multiple months (e.g., a quarterly target, a personal goal such as weight-loss). Now reflect on the strength of ‘desire’ there was for the outcome (or consequences of not achieving it!). Was it low, high, or burning-high? Possibly it was high, and possibly it grew on you over time. Unlikely, that the source of that burning desire to achieve, was an order given to you which you didn’t believe in. Personal conviction leads to ownership, which in turn leads to a drive for personal action. This cycle keeps repeating till the outcome is achieved. Not surprisingly then, when many of my clients made investments in developing the strategy and then gave the ‘document’ to the team to implement, it failed. They hoped that developing a great strategy and giving a 300-page binder to the team was enough to get started on implementation. Important to note that those who developed the strategy were committed, but the depth of commitment was limited to very few. On the other hand, I have worked with clients where the strategy is co-developed with the team, building huge momentum in the organisation to start implementation. Smaller the organisation, easier this seems to do. However, I have also seen large enterprises doing a great job in co-developing the strategy with 50-100 or more leaders of the organisation, often with external facilitator support. Co-developing then, to create depth and strength of ownership, became a powerful tool for me to build the foundation of implementation success.
Learning #1: Focus as much on the process of creating extremely strong and organisation-wide ownership & commitment towards the strategy, as on the analytics in developing the strategy.
- Facts-based granularity: Is your strategy developed using relevant facts & data that can’t be disputed, or based on what few individuals’ aspirations and desires? I was working with a client on assessing their failure in achieving what their 3-years ‘strategy’ was. To my surprise, beyond an aspiration-statement, there wasn’t much in their ‘strategy’ for us to learn from! This is not an extreme example, as the term strategy is used very loosely. For us, strategy has always been a tool to make important choices in a resource-constrained world. I haven’t come across a single client having an abundance of resources to achieve whatever they set their sights on. One or more out of Capital, Talent or Time has always been a constraint against doing everything in the universe. Successful clients had a very granular and facts-based approach to developing strategy. They would put together the objectives & constraints, baseline performance against market to assess genuine capabilities, then assess emerging trends & implications, then generate options for value creation based on genuine capabilities, trends & competition, then choose where & how to compete (and very importantly, where not to compete), then develop detailed action plans for the selected options, including reallocation of resources, communication of changes and finally create a loop of tracking progress using data & making revisions to the strategy whenever required. We have seen this consistently in the case of clients who achieved better success rate in implementation of their strategy. As anyone would observe, there are multiple steps in development and each requires granularity to make meaningful decisions. This leads me to another learning, related to sources of insights or facts. The more these sources are insightfully spread-out in the organisation, the higher the chance of getting more granularity. It is very obvious and intuitive that a top-down approach here would only give us a 50,000 ft view and not enough granularity. We rely on knowledge and in-market tools by experts such as Santhosh Babu of ODA, to identify those sources of insights hidden in the client’s organisation. And then, leverage those sources of insights in co-developing the strategy (Learning #1), followed by spreading the ownership in the organisation through these influencers.
Learning #2: Go deep, go granular in the journey of strategy development, in collecting the facts required in each step of that journey and in identifying & leveraging the sources of insights.
- Continuous prioritisation during the journey: Is strategy for your organisation a one time exercise undertaken to prepare annual operating plans or a continuous journey of making choices? We have rarely seen a client organisation that went on implementing what they laid out in their strategy document, followed by the annual operating & expenditure plans. Organisations are led by humans (for now!) and one of our best strengths is about adapting based on dynamic changes around us. I learnt from successful clients, the importance of continuous prioritisation during strategy implementation. Let us say, your organisation identified 8 high priority strategic initiatives to achieve the goals for the next 3 years. Each of those initiatives were detailed out further to create 100s of activities that need to be completed every year, and cascading down to sub-actions every quarter, every month, every week and every day. In an ideal world your organisation would need machines to then just execute on those actions daily. However, few important variables could come into play, in our experience. One, what was predicted on paper as 100 man-hours exercise, could turn out to take 1.5-2x longer. Two, the competitor was expected to react in a particular way (or not at all when disruptive start-ups are the competition!) and the reality could turn out to be different. Third, regulatory environment was expected to be stable and instead, it could change adversely for you. Fourth, your team & talent was expected to play effectively on your side and the complexity of human behaviour could throw you surprises in form of political battles and/or attrition. I could go on, but I think I conveyed the message – the implementation phase is dynamic, while the development phase was a lot more controlled. Most employees then blame it on an impractical strategy that was given to them, and in many cases the blame is on the consultants who helped develop it. In the case of successful clients, I have seen a different trend. Strategy is seen as a journey, and not an annual exercise. It starts with a thoughtful & collaborative development and is then followed by ruthless prioritisation on a need basis throughout the year. Ruthless, because they overcome the tough part of saying No to many things that were a Yes in the past. But that’s what prioritisation is about – say No more than you say Yes! There are many tools and frameworks that could be utilised for prioritisation, like some listed here. However, I consider prioritisation to be both a science and an art, needing more than just tools and/or frameworks. Experienced management professionals are able to apply judgment while prioritising, which is very crucial as data is not always available in abundance to fit into a tool/framework for daily decision making. Having said that, the key learning for me still remains that of Continuous Prioritisation (and saying No to a previous Yes, if needed!) during the implementation journey.
Learning #3: Continuously review the priority of initiatives in focus, and make revisions to the action plan based on performance against the targets set earlier.
- Performance management or progress tracking: What is the success rate of your organisation in meeting its monthly key performance indicators? Clients we have worked with fall in 3 different categories. Category 1 are founder led businesses, where usually (of course there are exceptions) the targets are so stretched that success rate against them averages below 70%. Category 2 are large incumbents where management is able to convince the board to set targets that are achievable, though they run the risk of getting disrupted. Success rate is usually 90-120% and most employees get their bonuses. Category 3 is where we enjoy working the most – organisations that set difficult, not impossible targets, and end up achieving 90%+ usually. I am going to share further in reference to Category 3 organisations, that’s where we have learnt the most from. What sets them apart from others is not only the target/objective setting process (which we have covered in previous points), but a very robust management infrastructure that is in place. This is a huge, powerful and deeply researched subject, and there are now choices available to make in different aspects such as the traditional balanced scorecard based KPIs vs. the fast growing OKRs (both are very old systems), bell-curve vs. power-law based reward & consequence management (debate made famous by Laszlo Bock of Google) and so on. There is more guidance available now on the future of performance management and agile performance management. Our is a modest experience and learning as such and I will state it in 4 parts, that we have witnessed in most category 3 organisations. Part one is setting up the key metrics to track performance of individuals & teams. These are very tightly linked to the strategic objectives of the organisation. Part two is data collection against the key metrics, making it as real-time as possible, so that meaningful action could be taken by teams & individuals. Part three consists of the cascade of reviews, feedback and coaching – aimed at making teams & individuals aware real-time as much as possible, how they are performing and where they can improve. Part four consists of the science and art of rewards & consequences and motivation. All 4 parts collectively define the robustness of management infrastructure in place for performance management. It often takes years of iteration to make each individual part serve its purpose and collectively the system to create a high-performance organisation. And this I find as a very compelling reason why the systems, processes and culture built by an organisation are sometimes considered an asset and intellectual property on how work gets done there.
Learning #4 Ensure that the 4 part performance management system – key metrics, real-time data collection, nearly real-time feedback, coaching & reviews and rewards & consequence decisions, is working well to support the implementation & execution (Clue: start with assessing the success rate)
- Optimal resources & capabilities: Do you recall any past instance where the strategy failed due to inadequate budget or necessary skills in the team? We experience this almost all the time as clients are unable to assess the resources and/or capabilities required to execute the strategy outlined. Ironically, many times this is the reason why we are engaged in the first place – to augment the capabilities or capacity of the client. Budgeting is often top-down, working backwards from the fund available. This leads to a forced constraint on the team down the line to implement with what is available. Sometimes it leads to higher efficiency of operations, and other times it leads to lower effectiveness of outcomes. Rarely do we see the balance between efficiency and effectiveness, which such constraints were expected to result in. As organisations are adopting new operating models to adapt to the digital age, traditional methodology of budgeting is getting replaced for innovation and agile methodologies. Similar to the approach on budgeting, our experience indicates a significant gap in clients’ ability to assess and/or build-up team’s capabilities to implement the strategy is an area where. This has its roots in the way talent management as a function been governed – more reactive, and hence always lagging behind in providing the essential skills for implementation. Strategy, and especially disruptive one, is expected to transform an organisation for large scale impact. Could an organisation achieve transformation without first having transformed the capabilities of the people who are implementing? Here also, organisations are adopting newer rules of talent management, as their entire operating model is undergoing a change. We almost always first recommend our client on the actions required to bridge the gap in capabilities, and then support implementation through augmentation support. Unfortunately, lack of sufficient action on the former prevents a sustainable model to be in place.
Learning #5 Before signing-off on the implementation, critically assess the resources and capabilities required, preferably through newer models that are conducive for agile methodologies