Today’s blog is co-written with our associate Maurice (Moe) Dutrisac of Mastermind Solutions; a specialist in developing strategic plans for mid-size companies.
Jack Welch is often quoted as saying that culture trumps strategy every time, but what does that mean? Below we unpack the impact of culture on strategy and how the best-laid plans can come to naught through poor execution. A Japanese proverb warns “Vision without action is a daydream. Action without vision is a nightmare.” When Mr. Welch refers to this conflict he makes no distinction between his alma matter GE and smaller businesses. The principles apply equally to both.
Refreshing strategy in response to lackluster performance or to re-calibrate direction should see results improve typically by 10 to 15% per annum but of course, dependent upon execution particularly with how the changes are handled with employees – 80% of mergers it is said fail to deliver promised synergy with the cause mostly relating to people.
The Harvard Business Review refers to this challenge as the “Strategy to Execution Gap” and their research indicates that companies that focus on this grow 37% faster than competitors with no long term plan. Business Development Bank of Canada found that business owners with a strategic plan will outgrow competitors without one by 15% p.a.
Here are some techniques that we have found to be successful:
Define Your Culture – Understand the unique characteristics that fuel the way the organization has succeeded in the past. Management teams that achieve high performance spend noticeably more time engaging their organization in discussion (e.g. town hall forums, surveys, measuring employee engagement etc.) about the enablers and drivers of success, the barriers that threaten it and how they can be overcome.
Live Your Values – Experienced leaders know that building a culture does not occur overnight and the first principle is committing to it through a shared understanding of the values and the organization’s superior capabilities. Leaders in high-performance cultures dedicate more of their time to reinforcing culture and in translating their vision into clear actionable goals. Frequent consistent messaging identifying the behaviors necessary for successful delivery is then cascaded through the organization supported by appropriate incentives and performance feedback.
Organize Resources – Be prepared to spend an additional 50 percent of the time currently dedicated to optimizing talent, reviewing needed skills, development and succession plans and the organization’s ability to attract and retain the needed human capital. Can you get from “here” to “there” with what you have or do you need to add to or change the stable of skills?
Monitor Organization – Ensure there is alignment between departments on supporting strategy. Assess department heads to confirm that they have the skills & cognitive ability to address the next strategic phase required for the company to compete and grow. For example, if this involves new market segments are Sales & Marketing leaders familiar with these segments? Do not be reluctant to change organizational design in response to each step of strategic evolution. Management teams that play only to their current strengths will not outperform in the long run – constantly monitor culture and challenge leadership style.
Institutionalize Strategy – Cascade the vision into daily management processes. High-performing organizations focus more time on achievement than their lower-performing peers; establishing financial and operational metrics for each goal that cascades from strategy, allocating resources and then reviewing results against target metrics. Successful leaders represent a “bumper” where mission collides with day-to-day activities.
A Strategic Coach – Can benefit a CEO or executive team by providing the unbiased opinion that colleagues cannot. It is unlikely that spending too much time on day to day operations will result in a staff member telling their boss to focus on strategy. An experienced coach will bring often needed insights and alternative approaches from other industries.