Can Strategy and Execution Really Be the Same Thing?

Even wonder why we see so many articles on Strategy with the most common reason given for a Strategy failing is usually due to poor execution. Some say that execution and strategy are the same thing. I’m not one to join that camp completely.

Keep Your Eye on The Main Thing

To me the problem is that when we focus in on the Strategy and/or Execution we often take our eye off the main thing. Strategy and Execution are two of the steps in the formula for carrying out a company’s Vision. The Vision should be the primary focus of the company with both short-term goals and long-term objectives. Strategy is the agreed plan to accomplish the Vision. To execute the chosen Strategy there has to be commitment and established processes that enable the Strategy to be carried out to achieve the Vision. A good Vision is always to achieve positive Results … and in business, the most important Results are a combination of three things … profits, cash, and an improved balance sheet.

Leadership is Required

The role of leadership is to transform complex situations into small pieces and then prioritize them so that the Vision can be achieved. Therefore, the goal or objective of Strategy and Execution is to make the complex routine in order to achieve the Vision.

Wrap Up

Add to the above two simple concepts.

First, most successful strategies are simple. Simple is powerful. Simple does not mean easy … you still have to take action and find the right action to take.

Second, change is constant, but it does not always bring improvement. But improvements always results in change. To avoid change is impossible, so embrace it and make things right sooner than later. Be bold and show leadership.

Finally, the most important ingredient is to approach the Vision with Excellence in all steps of the necessary formula for success.

© Phil Hoffman 2015. All rights reserved

Strategy versus Execution

Both strategy and execution are important … very important. Today strategy seems to be the sexy side of visioning and developing trendright mission statements. While it is important and it must be right … and it takes a commitment from above, below, and all around, it is not what makes a company successful. What makes a company successful is Delivery and Promise.

Delivery is executing the strategy so that what is chosen as the strategy is delivered and what is promised by the company is fulfilled. The Delivery and the Promise from the company depends on the Execution.

Not for a minute do we want to say that strategy is not important … but once you have decided your direction (strategy) … say North … then you have to start mapping, to start moving, and getting there … and staying there. To have a successful strategy requires the Discipline of Execution and the Importance of Processes, which are both part of execution.

Again … strategy is important … but at the end of the day the company that executes the right processes wins … and that requires execution.

Wrap Up

The common denominator for genuine success is discipline and the execution of processes. It’s also requires efficiency, but the big difference is the discipline and execution of processes.

What are your thoughts or comments?

© Phil Hoffman 2014. All rights reserved

Turnaround

Turnaround is a bold and powerful word in the business world. To some it means desperation. To others it is scary. To most … they don’t understand it. To do it takes courage and commitment beyond what most are willing to give.

In fact preparing this blog was daunting, challenging, and exhilarating all at the same time.

When you want to turn around a company it is usually for one of two reasons. To pull a company out of the red on the P&L or to increase margins. Companies that are in a distressed situation normally do not have the cash flow/cash to achieve a turnaround … best to avoid.

An Inside Job

When the assignment is to turnaround a company you want to make sure the solution is coming from the inside. Outside solutions – even if very good and adequate – will never get the necessary buy-in from the employees to ensure proper execution unless it is from inside – it needs to be “our” plan.

Solutions from inside will be better accepted from people who do the execution when they feel “this is our plan.” Then they will execute. If from outside the attitude at best is, “we are trying their plan to see if it will work.” (Lacks commitment from workers)

Transformation

Once you determine a solution, you have to transform to a plan with priorities, timeframe, and cheapest (best value).

You have to look for the solution by talking to a lot of people … preferably people in the “critical process areas.” For example … purchasing is the No. 1 area to address. Normal business financials tell us what percent of business is in the purchasing area or process – this area has to be good, very good. If the normal industry percentage for purchasing materials is 40% and your company is at 50% or greater you need to analyze this area closely, delve into all purchasing functions, including processes, to see why the discrepancy. If the company doesn’t buy well, even if you do miracles everywhere else, you’re not going to make it up elsewhere. You must be sure purchasing is in line with competition and industry standards. This is a very important area.

The No. 2 area is knowing exactly what the segments are in the market that you are competing so you can re-establish the company – the brand – into these segments.

The commonsense approach is to determine processes that are most important and be sure you are as competitive as you can be. You have to go see the people who are in charge of this process – including everyone around this process – (do not delegate to someone else). Interview all of them (do not delegate). Learn what’s wrong. Ask questions like, “What do you think is wrong? “How can we fix it?” “What do you feel is the most important part of our purchasing process?” Etc., etc., etc.

By talking and listening to a lot of knowledgeable people a solution will become very clear. People usually avoid the over dramatic solution such as shutting down a plant, laying off people, etc.

Again, interviewing by asking questions – is a very simple way the solution is going to become very clear.

Final Plan

When you develop a final plan, everyone will join in and execute with results.

You have to remember that your job is turning around the company. Nobody cares if you have problem(s) … fix them. You accepted the job … that’s it … fix it.

Make as many changes as it takes to fix the problem(s). Nothing more … nothing less.

You know from the beginning that solving problems is going to result in changing habits – you need to say it – communicate it – then do it. People will accept change when they know commitment is behind the change.

Your Commitment

After a plan is decided and you get commitment from people to execute with commitment you must give in return a commitment to resign if after one year of starting the new plan if the company is not more successful in a defined way, i.e., take company into the black, increase margins significantly, etc.

Overtime-1

Strategy is 10% and execution is 90% of success. To accomplish this requires two things …

1. a discipline of execution and
2. Knowing the importance of processes. Yes, strategy is important, but at the end of the day, the company that has the best processes with execution will prevail.

The big difference in the success of businesses today lies in discipline and execution.

Overtime-2

The product is important. Therefore, at least every other executive meeting should be held on the production floor around the product being produced. For two reasons …

1. That all executive management understands the product and the importance of the product.
2. That the people executing see that management understands how important the product is and how important their execution is.

These are two very important areas that many companies overlook or don’t communicate far enough into the company.

Finally, a successful turnaround requires discipline, the right strategy, commitment, communication, and execution.

© Phil Hoffman 2012. All rights reserved

Barriers to Strategy Execution

Only 10% of organizations execute their strategy. This means 90% don’t execute their strategy. Wow!

Here are the primary barriers to strategy execution:

1. Vision Barrier – only 5% of the workforce understands the strategy. This means that management has done a poor job of communicating the established mission statement and their vision for moving forward, or for dealing with an adjustment. After all, strategy is what the workers execute to enable positive results.
2. People Barrier – only 25% of managers have incentives linked to strategy. One of today’s key elements for strategic planning deals with including incentives for accomplishing established strategic goals and objectives. When Jack Welch introduced Six Sigma to GE, he included an incentive of 25% of base salary as a bonus for vice presidents who attained a black belt status … the participation and results were unbelievably successful immediately.
3. Management Barrier – 85% of executive teams spend less than one hour per month discussing strategy. If management doesn’t take strategy as important to the company’s success, how can they expect their workers to?
4. Resource Barrier – 60% of organizations don’t link budgets to strategy. To state a strategy without allocating the people and or resources necessary to accomplish the strategy is nonsensical. This indicates poor strategic planning from the start.

Fortune magazine reported a study that showed “70% of CEO failures came not as a result of poor strategy, but the inability to execute.”

Disclaimer: Sometimes WordPress includes ads with my blog … I do not choose these and I do not receive any compensation from such ads.

© Phil Hoffman 2013. All rights reserved

Converting Ideas into Results

The short answer to converting ideas into results is Execution, which I strongly believe in and have mentioned in several of my blogs. However, there is a plethora of books and articles today on the strategies for transforming ideas into results, so many in fact it can become confusing when it doesn’t need to be. Ten years ago it seems the biggest concern was coming up with good ideas, but today people seem to want to know the actions they need to focus on to be successful. The interesting thing about the change in interest from Ideas to Actions is that the actions are basically the same for every business.

Again there are many books, articles, and subject courses at colleges that spell out the actions required to run a business, whether a startup or an established business. Therefore, I’ve taken the liberty of recapping what I feel are the basic essential strategies here.

1. Vision – As Stephen Covey taught us in his book The 7 Habits of Highly Effective People … begin with the end in mind. In other words have a clear and compelling vision in your head of what you really want to do. But you need to take that idea and document it and communicate it in a way that enables every member of your team and your customers to understand what your vision (or What) is.
2. Work Ethic – find the best people you can. You can’t teach work ethic so that is the key element you need. Doers can be taught; Thinkers think, but seldom are action oriented. The future of your company is based on the quality of people you attract and keep. You must have a winning culture that your team commits to.
3. Communication – you have to have open, honest, and candid communication throughout the organization. You need a keen or sixth sense of radar as to what’s going on at all times. This is a key intuitive requirement in my opinion. At the same time, the key elements of communication in the business world are a.) conscious listening, b.) common sense versus emotion, c.) and reading and understanding the meta-messages that are not spoken.
4. Sense of Urgency – whenever I have talked with someone who has made major changes or transitions they have always said they wish they had done them sooner. And that applies to business acumen too. You have to have a sense within your culture of getting things done … make important things happen now. Furthermore, a sense of urgency will keep at bay any efforts to start a bureaucracy, therefore, it is a positive source of energy. Acknowledge and reward fast action on key matters. The leader sets the pace. What you focus on will set the example for your people and who you spend time with will be an asset or a detriment.
5. Execution – is a key requirement for positive results. (Heck, Larry Bossidy wrote a whole book on Execution that is a fabulous reference for us all.) A performance-based culture will demand quality and excellence. Furthermore, a sense of execution within a performance-based culture encourages continuous innovation and improvement, and will not tolerate mediocrity or poor performance.
6. Customer Centric – build into your personal dashboard mechanisms for getting feedback from customers. Knowing that you are delivering what the customers want and value is what is going to make you successful. A positive attitude and the ability to truly listen are important elements in dealing with customers. A well-managed customer focus will drive all factors that affect profitability. And the best results you can get are consistent profits.

The above strategic steps used in a synergistic manner will create a successful business model. It is always best to focus on one principle at a time, but important for the leader to understand the big picture of the synergy of all elements … or as Stephen Covey said, “… with the end in mind.” Again, it may be impossible to address all six principles at once, but start with the one principle you feel will be the most impactful at creating leverage immediately and build from there.

Two keys here are to fight off bureaucracy and do not accept mediocrity … both of these are cancers on a business. I suggest you focus on four key watchwords – integrity, excellence, discipline, and action.

Establishing a culture whereby simple actions done in an outstanding way are more effective than complex and time-consuming actions done poorly. Don’t be swayed into thinking that “simple” means “easy to do.” Nothing about running a business is easy to do. But having a road map with these six principles will help you implement and execute your plan successfully.

© Phil Hoffman 2013. All rights reserved

My Team Concept

How to address the context of Team is a simple statement but a subject that is harder to accomplish than say or pontificate about. So how does one really address the Team Concept in a proactive and results oriented manner?

First and foremost, you must go after being a “High Performance Team” … not just a good team … or just a team … but a high performance results oriented team. By this, I mean a team that executes an organizations’ vision with positive results.

What does it take to do this?

It takes a group (team) that is comprised of people with extraordinary clarity of their vision or assignment who focus on three key factors:

1. What … what do we do
2. Why … why do we do it
3. How … how do we do it

Add to these three key focus points a strong predisposition toward Execution.

Doers

To do this you have to choose or select people who are Doers … people who have done something in the past. Not Thinkers who spend time thinking through things or restating what they have heard others say or what they have heard about or theorized.

I’m a strong believer in work ethic … I don’t believe it can be trained … either you have it or you don’t. At the same time, I strongly believe it is much easier to educate (train) a Doer than it is to educate a Thinker.

Team Formula

My team concept is getting things done. My formula is to choose and commit to a Vision … determine a Strategy … gain Commitment … Execute your strategy (plan) … which means Results. The final part of this formula is Accountability, there must be accountability with inspiring incentives that keeps all parties engaged and involved. While all parts of this formula are important, the key is Execution. Always.

What are your thoughts and ideas on the concept of a successful Team?

© Phil Hoffman 2013. All rights reserved

 

Execution Should be Part of Strategy Process

I have concluded from my recent consulting experiences, and after many network meetings with sharp business people, that the biggest problem facing businesses of all sizes today is the inability to execute.

90% or more are not executed

While it can be difficult to get leaders of companies to objectively formulate a good strategy, it is even more difficult to implement and execute a viable strategy once it has been formulated. Fortune Magazine noted recently that, “Less than 10% of strategies effectively formulated are effectively executed.” That means that 90% or more are not executed!!! Just like sales, the key for having good results for your strategies is follow up … and just like in manufacturing and process flow, the key for good results is continuous improvement. Therefore, the key for reaching the results intended for a good strategic plan is execution and continuous refinement … or follow up.

What is the disconnect?

Companies large and small spend billions of dollars each year on formulating good strategy … strategic planning, etc. If you do a Google search on strategy, you will get well over a million hits on strategy consulting … ranging from the big name boys to unknown boutique firms specializing in strategy. Furthermore, if you do a Google search for strategy implementation consulting you will get less than a half million hits … this very simplistic exercise clearly shows that even if you allow for possible overlap there is a significant disconnect between formulating strategy and executing strategy. The disconnect is in not making execution part of the process.

Ever since Larry Bossidy came out with his book on Execution: The Discipline of Getting Things Done I have taken a real interest in defining and measuring execution. It is in my opinion that execution is the key ingredient to all areas of business. Frankly, execution is the difference between success and failure every time.

Factual Expectation

After much thought and research, I have included in my consulting practice the conscious thought and inclusion of execution in the strategic planning process. I explain to my clients that my management style includes execution as a key ingredient to the process so that the desired results are not theoretical objectives but factual expectations that greatly raise the success factor of any strategy. I am not successful in my consulting unless I improve my client’s condition. That’s my added value and that’s what my remuneration is based on which ensures a win-win situation for both my client and me.

This requires that business leaders think differently whereby they create more value and better options for the company, the employees, and all the stakeholders.

How do you ensure that your strategy is successful?

 How do you implement execution?

© Phil Hoffman 2012. All rights reserved