Business Daily’s columnist Cathy Mputhia wrote on August 26 an article titled “Every business requires strategic plan to succeed”.
In the article, Cathy rightly states that for business to succeed in the rapidly changing environment, a strategic plan should have a clear sense of goals and objectives that go beyond making profits.
However, studies show that a strategy without a culture of execution is useless. In fact, according to Kaplan & Norton, 90 per cent of all strategies fail.
I particularly dislike “strategy”, a common word in corporate-speak.
If organisations want to see results, it is certainly not in the belaboured hours spent in “strategic brainstorming” where one tends to walk away with a gilded view of objectives and approaches and very little of anything else.
What is largely, but wrongly, termed as “strategic planning” in today’s corporate world is a situation where strategy consultants come in, do their work, and document the new strategy in a PowerPoint presentation and a weighty report.
Town hall meetings are organised, employees are told to change their behaviour, balanced scorecards are reformulated, and budgets are set aside to support initiatives that fit the new strategy. Then, nothing happens.
Many so-called strategies are in fact goals. “We want to be the number one or number two in all the markets in which we operate” is one of those. It does not tell you what you are going to do; all it does is tell you what you hope the outcome will be. However, you will still need a strategy to achieve it.
Without granular and carefully drafted actionable initiatives, strategy execution culture and a strong corporate performance management system, many strategies turn out to be mere impressive words etched on paper and are pointless.
As a rule-of-thumb, only five per cent of management’s time should be spent hatching strategies and 95 per cent dedicated to drawing out detailed plans for implementation.
While executives may readily participate in the development of new strategies, execution tends to get short shrift, because it is often viewed as a lower-level task or concern.
Strategy execution takes longer, involves more people, demands the consideration and integration of many key variables or activities, and requires an effective feedback or control system to keep a needed focus on the process of execution over time.
The strategic planning stage is usually more concentrated and of shorter duration than the execution stage. It often deals with interesting conceptual issues that appeal to many managers.
The longer execution time horizon results in developments and changes that must be addressed over time — for example, manager turnover, competitors’ reactions to a company’s strategy, changing economic and competitive conditions, a changing industry structure and forces — suggesting the importance and difficulty of organisational adaptation during the execution process
The basic step for a company to follow to become more focused on execution or implementation is to create a culture of execution.
An organisational culture includes values, prescriptions on how to act, how to treat others, how to react to performance shortfalls, and how to compete.
These have a profound impact on behaviour.
A related fact, however, also must be kept in mind: Behaviour, over time, affects organisational culture.
Culture is both an independent, causal factor, and a dependent factor, affected by behaviour.
A desired culture is driven through the creation of behaviours and performance programmes that become an integral part of an organisation’s way of doing things as well as reinforcing behaviours and performance programmes that affect the very essence of how organisations act and compete.
Dominic Nzuki,strategy expert, Altima Africa Ltd, [email protected]