Publications
Partners
Successful businesses know how to close the gap between strategy and execution
While
strategy formulation is intellectually simple, it is the ability to execute
effectively that sets successful companies apart.
Leading organisations are able to strike a balance between strategy
formulation and execution, senior vice-president of BTS Middle East and Africa,
Deon Greyling, told a recent forum at the Gordon Institute of Business Science.
Research conducted by global professional services firm BTS in
partnership with the Economist Intelligence Unit titled Mindsets: Gaining Buy-in
to Strategy, confirms what many managers know: there is a disconnect between
strategy formulation and its execution at different levels in the
organisation.
The report states: “The differentiator that sets top performers
apart is that they recognise the strong role employees at all levels of the
organisation play in achieving business results.”
A panel of leading strategic consultants and thinkers identified
the following measures for effective strategy implementation:
Engage the entire organisation
An aligned organisation is a prerequisite to understanding
strategy, as well as guaranteeing buy-in and participation from all levels, from
the executive, to middle management and staff.
The entire organisation must be included in strategy execution,
Greyling explained. However, there is often what he termed a “CEO disconnect”
where top-level executives are likely to significantly overestimate their
company’s ability to execute strategy, and underestimate the complexity of
implementation. “Leadership in business is relentlessly contextual,” Greyling
said.
Dr Jackie Chimhanzi, senior strategist at the Industrial
Development Corporation said that while it is middle management who
operationalise a strategy, there is often a disconnect between executive and
middle management, with executives not aware of the reality on the ground.
In order to translate strategy into delivery, she suggested
systematically progressing through the following initiatives:
» Recognition of problems;
» Targeted proposals to address these
needs; and
» The identification of a credible
sponsor who can intervene if necessary and coordinate across the different
initiatives to avoid duplication.
Capability development
The most successful organisations focus on building capabilities
across the business, as capability is the number one driver for executing
strategy successfully, Greyling said.
Market-leading companies invest more in developing management
talent, and therefore face fewer execution constraints. “Focusing on capability
first ultimately makes alignment easier,” he said.
Collaboration is key: Cross-organisational collaboration, overcoming cross-functional barriers and silos built up over time is one of the biggest inhibitors to execution.
Tebogo Skwambane, a partner at McKinsey and Company South Africa
said Identifying top talent throughout the organisation and how their
capabilities and competencies are mobilised is crucial.
“The most successful strategies are often the most simple,” she
added.
Greyling identified Pepkor and Capitec Bank as two outstanding
South African examples of successful strategy implementation.
Both have phenomenal focus on their key market segment, do only a
few things and do them well: “The consistent focus on high impact behaviour
provides a decision-making framework for staff who are then able to prioritise
their activities accordingly,” he said.
Communicate for alignment
Chimhanzi said communication is essentially indistinguishable from
alignment. “You can never have enough communication and communicate as early as
possible to avoid any resistance to change,” she said. “People can be your
biggest risk if there is resistance to change.”
Skwambane said that employees shouldn’t only understand a new
strategy, but must be passionate about it, as this attitude will impact on how
successfully it is executed.
When analysing a strategy and its execution plans, the organisation
must decide what behaviour it wants people to exhibit and what shifts are
required to achieve this. Concerted efforts to make new strategies personal
directly influence company performance.
“Understanding ‘why’ is key. Individuals need to understand how
they are impacted and make it personal. How the strategy is communicated will
tap into passion. To this end, it is important to allow for input into the
strategy from all different levels of an organisation,” Skwambane said.
Speed and agility
In today’s ever shifting business environment, strategy has to be
resilient enough to adapt to rapid and constant change.
Dr Len Konar, chief executive officer of ORCA and member of the
Steinhoff and Exarro boards said the impact of technology on companies cannot be
underestimated. “Organisations have to be continuously learning. However, South
Africa is not in a state of readiness for this shift. Our appetite for risk is
still reactive,” he said.
“The rate of change in today’s world requires agility from the
organisation to adjust to incremental changes. It is not always about the large
strategic moves,” Chimhanzi concluded.
» City Press is a media sponsor of the Gordon Institute of Business Science forums
