- Authored by: Josh Addey
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Organizations are made up of two or more people with a precise purpose; this purpose can broadly be classified into two;
- Profit Motive (for-profit) organizations; these are commercial intent organizations and their ultimate aim is sustainable profitability (maximize owners’ value). These organizations are simply called businesses.
- Mission-driven (not-for-profit) organizations; these organizations are meant to achieve their intended purpose of being (not-profit) in an efficient manner (judicious use of resources). Examples of such organizations are governments, government units and agencies (such as various ministries, passport office, electoral commission, judicial service, parliament, schools), civil society organizations (CSOs), other non-governmental organizations (NGOs) such as welfare groups, Churches, and many more.
Strategy is a common denominator for all organizations notwithstanding the size (micro, small, medium, or large scale). Various definitions for strategy have been made by experts cutting across several areas of specialty. A friend of mine runs an eye-care center as an administrator, an optometrist and a front desk officer completes the staff composition of this organization. My friend the administrator described strategy “as a means to an end”, while the optometrist described strategy as “an approach”.
This is a 3-member organization with no written strategic document yet they have their own idea about strategy, this influences their business actions “what they do”, “when they do what”, “why they do what”, “whom they do what for”, “where they do what”, “how they do what”.
Upon interviewing the front desk officer of this 3-member organization, I realized she knew little about the strategic direction of their micro organization. One would wonder how she could make much meaningful impact towards the achievement of a strategy she knows little about. This situation is not an isolated case; many employees in Ghana are in a situation I term “default mode”. Most of these employees go to work on daily basis yet they know little about what is expected of them, the failure of these organizations is just an outcome of employees’ being at “default mode”; employees are simply not in alignment with the strategic direction.
The decisions which organizations make that define its mission (what, when, who, where, why, how) are fixed for the long-term and not frequently reviewed, but its (shared) picture of the future which is its vision should have “a means” or “an approach” towards achieving it. An organization’s vision is time specific, measurable and fact based. Several beautiful management and strategic tools are used in defining these high level identities of organizations, but the ultimate question remains, why are some organizations successful and others not successful?
Presidents, CEOs, MDs, Country Managers, Vice Chancellors, Coordinators, Principals/Headmasters, Ministers, Head Apostles/Prophets/Pastors, Commissioners, DCEs, or whatever title you are so-called, to depict your role as the head of your organization, this article is for you, because you bear the ultimate responsibility in moving your organization from its current state to a more desirable future state, strategy should be your focus. The term “managers” represents all heads of organizations in this write-up.
The purpose of this article is to emphasize the significant role strategy planning and implementation plays in the achievement of an organization’s vision. This discussion is foundation on the work done by Robert S. Kaplan and David P. Norton on the balanced scorecard approach to strategy management. The subject matter is very broad, but I will do my best to highlight the salient issues that justify the need for a critical attention with strategy planning and implementation.
This article is not intended to give a step-by-step guideline to planning and executing strategy. The process of formulating the strategy profile (canvas) of the organization (which is a preceding activity with loads of analysis) is not covered in this article.
How Strategic Is your Strategy?
I am yet to come across any strategy document which portrayed failure, yet not many strategies are successful. It is therefore fair to state; strategy implementation is the most failed endeavor in managing organizations.
Research has shown the following approaches to strategy management;
- Most organizations do not have any documented strategy approach or path that seeks to guide the organization from its current state to a desirable future state.
- Some organizations have a documented strategy, but alignment has always been a problem evident in these forms;
- Not all workers know of the existence or content of the strategy
- The strategy is not the basis for operational planning
- Employees’ accountability and reward are not tied to performance concerning the strategy
- The strategy is hardly discussed; for progress to be measured, enabling correction and improvement
- Focus areas that determine the allocation of organizational resources are unclear and questioned by employees, even amongst management members in some cases.
- The strategic impact of initiatives questionable
- The absence of clear strategic objectives
- No measurements in place for strategic objectives
- Strategy does not drive training and development needs of employees
- Strategy is the concern of only few top managers.
- Unrealistic or no targets are set at all, in some instances targets are set without commitments
- No evidence of strategy in the day-to-day work of employees
- Ownership of strategy by employees is absent
- Only few organizations approach strategy in a manner different from those enumerated in 1. and 2. above. These organizations have proven to be successful and sustainable over a period of time.
The Perspectives of strategy, strategic objectives and strategy map
Prof. Kaplan emphasizes that managers must view strategy via these four lenses;
- Financial (businesses)/Stewardship (Not-for-Profits): How do we create value for owners (businesses) or how do we maximize value for stakeholders (not-for-profits)? Financial performance, value, effective resource use are the desired results of this perspective.
- Customers (businesses)/ Stakeholders e.g. citizens, members, society (not-for-profits): In the view of customers and stakeholders, how well are we meeting their needs? (Acquisition), Satisfaction and retention are the desired results of this perspective.
- Internal Process: How can we improve internal processes to deliver products and/or services better, faster, and cheaper? Efficiency and Quality are the desired results of this perspective.
- Learning & Growth (Organizational Capacity or People, Tools & Technology): How can we support the internal processes through improved knowledge, skills & abilities, tools & technology, leadership and other capacities? Improvement in Human Capital, Tools, Innovation, Infrastructure, Culture are the desired results of this perspective.
The relationships between the strategic perspectives are shown in ILL1 and ILL2 for businesses and non-profits respectively.
ILL 1. The Financial is the destination perspective for businesses (creating value for owners).
ILL 2. The Stakeholder is the destination perspective for non-profits (meeting the needs of stakeholders).
Strategic Objectives: These are action statements that describe what must be done to be successful over time (1-4 objectives per perspective). These objectives are outcomes from strategic theme (pillars of excellence) teams made up of various subject matter experts across the organization. It is important to start with the end in mind when determining strategic themes. It is the responsibility of the strategic management team (led by the head of the organization) to determine the strategic themes.
The strategic objectives determined become the focus areas (which cut across the four perspectives) for the organization; a broader base employees’ direct involvement is critical for success. The organization sets out what its “right things” are and avoid being victim to Richard R. Covey comment that “People and their managers are working so hard to be sure things are done right, that they hardly have time to decide if they are doing the right things”. The strategic objectives are the DNA or building blocks of the strategy hence employees (subject matter experts notwithstanding level in the organizational hierarchy) involvement in it development is critical to its success. This is where ownership of the strategy gathers momentum.
A visual upward expression of relationships (cause-effect) among the strategic objectives (right things) driving strategic results which tells the story of how value is created for the organization’s stakeholders is known as strategy map.
ILL 3 and ILL 4 are examples of the strategy maps for a business and a non-profit respectively. The organization can choose any name that it feels will drive its vision for the strategy program. This is a fantastic opportunity for the top hierarchy to give all employees the opening to make an input; imagine the commitment and ownership that will welcome the strategy from the lower ranked staff if an operational level employee’s (e.g. cleaner, receptionist, etc.) entry is selected, your guess is as good as mine.\
Measures and Targets (KPIs)
The following quotations emphasize the importance of measurements for the strategic objectives (the right things);
- “If you don’t keep score, you are just practicing” – Vince Lombardi
- “What gets measured gets managed” – Peter F Drucker
- “Measurement is the first step that leads to control and eventually to improvement. If you can’t measure something, you can’t understand it. It you can’t understand it; you can’t control it. If you can’t control it, you can’t improve it” – James Harrington
Targets become benchmarks with which actual performance is compared. This ensures there is balanced basis for responsibility to the owners of the various strategic objectives (the right things).
Peter Drucker put it that “there is nothing so useless as doing efficiently that which should not be done at all”. Initiatives (the how) are enabled through projects and activities related to specific strategic objectives to close the gap between the organizations current state and desirable future state. Initiatives with greater strategic impact are prioritized (judicious use of the limited resources) and help avoid unnecessary conflicts amongst heads of various organizational units. Initiatives could manifest in marketing campaigns, designing of website, instituting TQM program, Six Sigma and other workflow improvement programs, training courses, talent management programs, customer loyalty programs, policy analysis, branding studies, market surveys, customer feedback mechanisms and so forth. Initiatives have been commissioned by some organizations yet these have not yielded the desired results; strategic non-alignment is mostly the cause.
Representation on various teams
People are very important in the successful planning and implementation of strategy. It is important that people with the requisite knowledge and skill in the focus areas (irrespective of rank) are given the opportunity to be members of the various teams, selection of people to these teams should not be prejudice. The following attributes are desired;
- Analytical thinkers
- Visionary (outside the box) thinkers
- Change agents; “can do” attitude
- Understand the voice of customer
- Understand employee issues
The following teams may be needed depending on the size of the organization;
- Strategic Management team who provide overall leadership and ownership
- Strategy Champion or Coordinator
- Communication and change management team
- Strategic Theme Teams (subject matter experts)
- Strategic Objective Ownership team (heads of units responsible for objectives)
- Cascading teams responsible for creation of alignment at the tier 2 organizational (SBU, functional) level.
The corporate strategy must translate to the functional level (tier 2) through the cascading teams and further translate to individual employees or work teams (tier 3). This ensures that every employee clearly understand the strategy, understand his or her role, and is empowered in the quest to attaining the desired future state of the organization. We can then confidently regard the vision of the organization as a “shared picture of the future”.
Functional, individual targets and performance reports become the basis for their performance appraisal (rewards and responsibilities linked). Employees are always interested in WIIFM (What’s in it for me); this must always be discussed and negotiated at the beginning to prevent unnecessary conflicts which could derail the achievement of the strategic vision. If these are done in good faith, individual ownership of the strategy is attained and strategy becomes every one’s job.
Key Success Factors
The following factors are relevant for a successful strategy planning and implementation;
- Engaged management (leadership, good faith approach)
- Change management incorporated
- Fact-based decision making
- Strong project management discipline
- Long-term commitment
- Motivated behavior
An external consultant is mostly needed to facilitate the strategy planning and implementation process. In some large organizations, there is a strategy unit which reports to the head of the organization. In such situations, such roles may facilitate the strategy planning and execution process but external consultants are preferred due to perception of neutrality. The consultant plays the following roles in the strategy planning and implementation process;
- Facilitates the process
- Works closely with the teams
- Provides expertise
- Incorporates “best practices” insights
- Performs performance measures gap analysis
- Acts as Arbiter in conflict situations
- Asks the hard questions and facilitate difficult conversations.
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Strategy is a continuous action, thinking strategy (planning) and walking strategy (implementing), will result in continuous yielding (sustainable performance). Managers of organizations which constantly fail to achieve its vision must realize that, the organization cannot keep doing the same thing and expect different results.
The strategy formulated may either need review, or its planning and implementation (which is mostly the cause of failure) may need better approach. It is important to note these;
- Strategic plans created entirely by a consultant are owned by the consultant.
- Strategic plans created entirely by a small exclusive team representation are owned by the small exclusive team.
- Strategic plans created by a cross-functional team representation are owned by the organization.
I pause with this Chinese proverb “Tell me and I’ll forget, show me and I may remember, involve me and I’ll understand.”
Management Lessons (Takeaways)
- Every organization (notwithstanding its purpose and size) has a strategy which it must translate to action. If the strategy is not documented, document it, if the strategy is not working, review or formulate a new one, all good strategies need periodic reviews.
- It is the role of the head of the organization to provide the needed leadership and drive for the achievement of the (shared) picture of the future, the vision.
- Strategy is everyone’s job, management activates it.
- WIIFM; Negotiate and agree employees’ performance related incentives and accountability.
- Always remember “effort doesn’t matter; it is result that matters” in managing organizations. There is no substitute for performance.
- The consultant is not far from you, we are available to facilitate the process, contact us for a win-win relationship.
This article is the dedicated to the following persons in appreciation to critical roles they played in my career development; The-Addey-Family, Mr. Solomon Otokunor, Portia Addae, Mr. Kofi Boateng, Mr. Kofi Bayitse, Mr. Samuel Amankwah, Mr. Erik van der Staaij, Mr. Kwame Ofori-Gyau, Mr. Joe DeCarlo.