Strategy implementation: from chosen course to results with goals, owners and rhythm

A strategy only exists once it is in the diary and the budget

The management team signs off the new direction in November. By March the sales team is still paid on one-off orders, the IT backlog has no slot for the client portal the plan depends on, and the monthly report shows the same figures as last year. Nobody sabotaged the plan. Strategy implementation simply never started, because the choice was never translated into what steers daily work: money, people, targets and meetings.

Implementation is that translation. You turn the chosen course into a few goals and initiatives, give each one an owner and real resources, and review progress on a fixed rhythm so you can adjust when the world turns out differently. This page shows how, with a worked implementation plan.

Why strategy implementation fails, and the figure nobody can back up

Presentations on change often open with the claim that 70% of change programmes fail, but when Mark Hughes of the University of Brighton traced the published sources of that claim, he found no valid and reliable empirical evidence for it (source: Journal of Change Management, December 2011). Using it to create urgency builds your case on sand.

The documented finding is less dramatic and more useful. 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 causes they describe are ordinary: resources that are inadequate or never made available, a strategy that is poorly communicated, actions that are not clearly defined and unclear accountability for execution. None of these is solved by a better strategy. All of them are solved by better implementation.

Five misconceptions about strategy execution

Donald Sull, Rebecca Homkes and Charles Sull surveyed managers in a large number of companies and found that the usual explanations for poor execution are often wrong (Harvard Business Review, 2015). Their five misconceptions, with what works better in a smaller firm as well as a large one:

Decisions are part of execution

Many initiatives stall not for lack of effort but because nobody knows who may decide. Paul Rogers and Marcia Blenko of Bain & Company argued that organisations implement strategy faster when decision roles are clear (Harvard Business Review, 2006). Their RAPID approach separates who recommends, who must agree, who gives input, who decides and who carries the decision out.

You do not need the acronym to apply the idea. For each initiative, write down who decides on budget and scope, who must be consulted and who only needs to be informed. Two departments that both think they decide will slow an initiative more than any lack of money.

How to implement a strategy: seven building blocks

1. 01

   Translate the choice into goals and initiatives

   Start from the option you chose (see evaluate and choose). Set three to five measurable goals and a short list of initiatives that deliver them. The OGSM model fits this on one page.

2. 02

   Move money and people

   Budgets tend to repeat themselves: in a McKinsey study, one-third of businesses received almost exactly the same capital as the year before (source: McKinsey Quarterly, March 2012). Show in the budget what is added and what is stopped.

3. 03

   One named owner per initiative

   A person, not a department. The owner gets a budget, a mandate and a deadline, and reports on the initiative as a whole.

4. 04

   A fixed review rhythm

   Initiatives monthly; goals, assumptions and resources quarterly; the strategy itself yearly. Each review ends with decisions, not just a status update.

5. 05

   Management information that looks ahead

   Revenue and margin show the past. Add leading indicators such as proposals sent, contract renewals or turnaround time in a KPI dashboard, and compare results with the plan afterwards.

6. 06

   Explain the why, and what stops

   Use the same words and figures at every level. Say why the course changes and what you will no longer do, until people can retell it themselves.

7. 07

   Adjust on agreed signals

   Set a threshold for each large initiative at which you reconsider its resources. You then adjust because a signal fired, not because someone lost patience.

An implementation plan in practice

Kestrel Analytical is a testing laboratory with 85 staff and revenue of €9.0 million. It tests food, water and environmental samples, mostly as one-off jobs for whoever sends a sample. The chosen strategy: become the regular laboratory for mid-sized food producers through multi-year monitoring contracts, faster results and an online client portal. Over five years, contract revenue should rise from 25% to 55% of total revenue and the operating margin from 7% to 11%. The plan for year one:

Fictitious Firmfocus example. Amounts in euro; the logic works in any currency.

The money: the first two initiatives cost €160,000 + €20,000 + €220,000 = €400,000 in year one. Stopping two general trade fairs frees €60,000 and pruning the catalogue releases €40,000 of reagent stock, so €100,000 comes from things the lab stopped doing. The other €300,000 comes from operating cash flow, against an operating profit of €630,000 (7% of €9.0 million).

The agreed signal for the commercial initiative was at least six signed contracts by the end of Q2. At the review there were four. Prospects said they wanted proof of the faster turnaround before committing for three years. The team introduced a three-month trial at contract prices and moved the start of the second account manager back two quarters. That saved €40,000 (half of €80,000 a year), which paid for a temporary technician on the dairy line, because speed was what buyers were testing. The year ended with 13 contracts: below the 15 planned, but well above where the trend in June pointed.

Strategy implementation in a small business and a larger organisation

Pitfalls in strategy implementation

• Too many initiatives at once: ten parallel projects means each gets a tenth of the attention. Finish before you start.
• An unchanged budget: if next year's budget looks like last year's, the strategy has not reached the organisation.
• A department as owner: "sales" cannot be called to account; a named person can.
• Reviews without decisions: a meeting that only reads out status reports teaches people that progress is optional.
• Nothing stops: new work on top of all existing work overloads the same people who must deliver the change.
• Forgetting the people side: new roles, targets and habits need attention of their own. See change management.

Implementation is the first building block of execution and control. To set goals for the coming years, use the OGSM model; for quarterly focus in teams, use OKRs. If the strategy itself is not yet on paper, start there: all topics are in the strategy overview.