Successful businesses know how to close the gap between strategy and execution

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 

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