Strategy execution and control: from chosen course to results
A strategy only counts once it shows up in budgets, diaries and results.
In this topic: Strategy 7
A strategy only counts once it shows up in budgets, diaries and results
Strategy execution and control: how you turn a chosen course into goals, owners, measures and a review rhythm, and which tool fits which need.
Choosing a strategy takes a few weeks. Strategy execution takes years, and that is where most of the value is won or lost. Michael Mankins and Richard Steele concluded that companies typically realise only about 60% of their strategies' potential value (source: Harvard Business Review, July 2005).
The loss rarely comes from one big mistake. It comes from budgets that still follow last year's split, initiatives without a named owner and progress meetings that decide nothing. This part of the knowledge base covers what happens after the choice.
What is strategy execution?
Strategy execution is the translation of a chosen strategy into goals, initiatives, budgets and named owners, plus a fixed rhythm in which you check progress and adjust. "Control" here has its management meaning: checking that you are on course and correcting when you drift. It is not about checking every task people do.
Two things set execution apart from ordinary planning. It moves money and people towards the new direction and away from what you decided to stop. And it treats the strategy as a set of assumptions to test, not a document to file.
The building blocks of execution
Execution rests on five building blocks, each with its own page.
Strategy implementation
Organise the work: why value leaks after the decision, and how to build an implementation plan with goals, owners, resources, milestones and a review rhythm.
OGSM model
Set the goals: objective, goals, strategies and measures on one page, with a full worked example and how to cascade it to departments.
OKRs
Set the goals per quarter: one ambitious objective with a few measurable key results, how to score them and the known pitfalls.
Balanced Scorecard
Measure and steer: Kaplan and Norton's four perspectives, the strategy map and a worked scorecard with leading and lagging measures.
KPIs and dashboard
Measure and steer: choose a handful of indicators, define each one once and build a dashboard that leads to decisions.
Benchmarking
Compare with others: test whether your targets are ambitious or naive, and see where your costs and margins stand against your industry.
Change management
Help people change: what John Kotter and later research teach about making a change of course stick, phase by phase.
OGSM, OKR, Balanced Scorecard or KPI dashboard: which tool fits which need?
The tools overlap, so ask which need you have right now, not which tool is best.
| Your need | Tool | Horizon | Works best for |
|---|---|---|---|
| Turn a decision into funded initiatives with owners | Implementation plan | One to two years, reviewed quarterly | Any organisation that has just chosen a new course |
| Put the direction for the coming years on one page | OGSM | Three to five years, updated yearly | The whole company or one business unit |
| Give teams a sharp, ambitious focus | OKRs | Usually one quarter | Teams that can work fairly independently |
| Show how people, processes and customers drive profit | Balanced Scorecard | Ongoing, map reviewed yearly | Balancing financial and non-financial goals |
| See progress at a glance and decide in meetings | KPI dashboard | Weekly or monthly | Management and team meetings at every level |
| Know whether a target is realistic | Benchmarking | Yearly, and when setting targets | Margin, cost and productivity goals |
| Get people to work in the new way | Change management | For as long as the change takes | Changes that affect roles, habits or culture |
A common combination: OGSM for the direction, an implementation plan for the year's few big initiatives, OKRs for a quarterly push in one team, and a dashboard with the shared measures.
One company, four tools
Kestrel Analytical, a testing laboratory with 85 staff, wants to move from one-off tests to monitoring contracts with food producers. Its OGSM sets the five-year goals, such as contract revenue rising from 25% to 55% of total revenue. The implementation plan funds four initiatives in year one. The commercial and microbiology teams share an OKR for a one-quarter push among dairy producers, and the monthly management meeting follows a scorecard of nine measures.
Fictitious Firmfocus example. Each child page works out one part of it.
Execution is also where strategy learns
Not everything you carry out was planned. Henry Mintzberg and James Waters described deliberate and emergent strategies as two ends of a continuum along which real strategies lie (Strategic Management Journal, 1985). A pattern that works in practice, such as customers buying a service you offered as a side line, can become the strategy. Good execution brings such signals to the yearly strategy review.
The claim that 70% of change programmes fail has no valid and reliable empirical evidence behind it (source: Journal of Change Management, December 2011). Value does leak during implementation, but use the documented findings, not a myth, to create urgency.
Strategy execution in a small business and a larger organisation
Small business
Keep it light: a one-page plan, a few goals, two or three named initiatives and a quarterly review in a meeting you already hold. A monthly overview of a handful of ratios, compared with your industry figures, is enough for most firms. The scarce resource is usually the owner's time, so free that first.
Larger organisation
The challenge is coherence between levels and units. Cascade the strategy no more than two levels down, let units work out their own plans within it, and link progress reviews to the allocation of budget and people. See strategic planning in large organisations.
Execution starts where the choice ends. Still deciding? Begin with strategic choices or evaluate and choose, and capture the result in a one-page strategic plan. All topics are in the strategy overview.
Why does strategy execution go wrong so often?
Should I choose OGSM or OKRs?
How often should we review progress on the strategy?
Sources
- Harvard Business Review: Mankins and Steele, Turning Great Strategy into Great Performance (July 2005)
- Strategic Management Journal: Mintzberg and Waters, Of strategies, deliberate and emergent (July 1985)
- Journal of Change Management: Hughes, on the evidence behind the change failure rate (December 2011)
- Harvard Business Review: Kaplan and Norton, The Balanced Scorecard: Measures That Drive Performance (January 1992)
- Harvard Business Review: Kotter, Leading Change: Why Transformation Efforts Fail (March 1995)
Maak gebruik van onze ondernemerstools en de laatste branche-informatie
Verkrijg direct toegang tot alle stappen, downloads en tools voor ondernemers.
- Toegang tot de meest actuele bedrijfstakcijfers
- Ondernemingsplan online tool — schrijf en download naar MS Word
- Download tools en templates voor ondernemers
- Vergelijk en bewaar uw eigen cijfers met het branchegemiddelde