Organisations invest a lot of time and energy in developing strategies which if implemented would doubtless benefit the organisation hugely. But in our experience the focus that top managers put into developing the strategy is not matched by a similar commitment when it comes to managing its implementation.
It is clear from multiple studies, however, that organisations are terrible at implementing these strategies. While almost all organisations report having a strategy, most fail to successfully implement them. In a detailed study of over 1500 organisations reported in 2008 by researchers working for IBM¹, the average failure rate was found to be about 40%, and others² have reported failure rates as high as 90%. There are many reasons why this happens (one recent study found 20 possible causes³), here are the three we find most common:
- Strategy Implementation work gets squeezed out of a busy agenda
- People in the organisation don’t engage with the strategy
- The organisation fails to adapt the strategy to reflect experience and environmental changes
Which leads us to the fourth letter in our strategy implementation acronym ACME - E for Engage. A strategy implementation will only work if those who came up with the strategy actively engage in ensuring that it gets implemented. Based on our considerable experience of working with organisations on this topic we’ve identified three practical steps you can take to ensure this happens:
- Actively adjust your work diary to make time for regular strategy implementation review meetings. How often will depend on the kind of strategy you are implementing, but we think they should be at least quarterly. Synchronise these with review of your Balanced Scorecard reports, for maximum benefit. Our most recent Balanced Scorecard Usage survey found that most organisations use their Balanced Scorecards to manage strategy implementation, and review them at least quarterly.
- Use your Balanced Scorecard to inform discussions about progress with your staff and any units that report to you (and those units have their own Balanced Scorecards, include those in the discussion too). By putting strategy implementation reporting at the heart of these meetings you underline its importance - helping build a culture that is responsive to this topic.
- Spend some time making sure your organisation is able to be responsive to changes during the annual cycle. A very common issue we encounter working with organisations is that when issues arise from strategy implementation work that require changes in goals or activities, other processes in the organisation prevent them being made: ad-hoc changes are often not easy to make mid-year (for example, reallocating budgets, changing personal goals); the more difficult they are, the less likely your organisation is going to be able to effectively adapt its strategic implementation.
Take care to avoid ‘fire-and-forget’ strategy implementation failures - if you have a strategy and want to realise its benefits, follow the simple ideas in this article to maximise your chances of reaching the winning post.
2GC’s ACME framework
Across three earlier articles we’ve looked at the challenges organisations face when implementing a strategy. During those articles we’ve established some useful insights about the most effective way of implementing a strategy - the need to articulate clearly the aim of the strategy; the importance of ensuring the units and people within your organisation know how they will be best able to contribute to the delivery of the strategy; and the value of having a mechanism that will keep you informed on the progress your organisation is making towards the delivery of the strategy.
In this, the final article of the short series, we have looked at what you can to do to ensure that your strategy implementation efforts are successful. We recognise that strategy implementation is nonetheless not easy! If you need some external help and facilitation to take your strategy to the next level, then please get in touch.
We are always keen to hear from you. If you have a question about anything we’ve written, or want to to find out more about these topics, simply drop us a line via our Contact page, or give us a call.
References
¹ Jørgensen, H.H., Owen, L. & Neus, A. 2009, “Stop improvising change management!”, Strategy & Leadership, vol.37, no. 2, pp. 38-44.
² Schaffer, R. & Thompson, H. 1992. “Successful change programs begin with results.” Harvard Business Review, vol. 70, no. 1, pp. 80-89.
³ Pella, M.D.A. et. al. 2013. “Factors Affecting Poor Strategy Implementation”, Gajah Mada International Journal of Business, vol. 15, no. 2, pp. 183-204.