Strategy Execution: How to Better Implement and Achieve the Desired Strategic Outcomes
26th Jul , 2017
Develop Strategy and Effective Communication are Key to Strategy Implementation
Unfortunately, being caught up in the daily business grind tends to hinder any serious consideration of what has actually been achieved strategically. A focus on short term work priorities does not necessarily help achieve longer term goals. Unfortunately, that business strategy you adopted only a few months ago, may have become obsolete. Further, despite everyone buying into the strategy not many have followed through. How did we collectively get the strategy implementation so wrong?
For business strategy to be implemented effectively it cannot just be the domain of company directors, senior management or the owners. Strategy must flow throughout the business to align each staff member with the common goals to get the whole team pulling together in the same strategic direction. It is critical to communicate strategy effectively, so that every staff member’s sees how they can contribute to, and create a sense of ownership in the strategy. Staff need to know they are valued in making strategy happen and how they must take responsibility to execute it. Strategy communication needs to be empowering. It needs to be transparent and deliver the vision, mission, values, strategic goals and risks, so that a positive strategy uptake occurs and subsequent implementation by the whole organisation. An International Business Mentor or Coach can help you through the strategy process.
Financial Modelling of the Potential Outcomes is Key to Strategy Development
Financial modelling is the most powerful strategic and risk management tool needed to ensure that strategy is evaluated. This is needed to ensure that it will deliver the financial returns, profits, cashflow, dividends, and business value that the company owners, funders, directors and managers need it to achieve. This financial modelling must consider the effect of multiple business scenarios to gain clearer insight into the various scenarios, and possible outcomes that will have an impact on the business’s future potential performance and quantify the risks. These financial and forecasting models need to fully integrate with financial reports (Actual and forecast Cashflows, P&L and Balance Sheet) and give graphical, statistical and dashboard data for executive decision-making and performance monitoring and control. Such financial tools must allow for the evaluation of the effects of business strategy and changes over an extended period and are critical in the identification of better alternatives business decisions and identifying risks to guide their mitigation.
Continued Assessment of Strategy Implementation is Critical
Strategy implementation requires setting tasks and processes with measured outcomes within a timeframe. To get successful strategy implementation we must consider the desired outcomes on a continuous basis. If during the implementation, the day-to-day tasks take over and the critical strategic actions do not get done, then the organisation will lose track of what they agreed to do to achieve the strategy.
When the desired business outcomes (budgets, strategic plans, group and individual’s targets and KPIs) are set then a strong sense of direction, priority and focus will have been established and can help direct the day to day focus. The strategy progress and the contribution made by all areas of the business need to be critically reviewed at least quarterly to keep the strategic plan on track.
Business Value should be Calculated Regularly in Strategy Implementation
Business value is generally only calculated when it is time to exit or when an investor wants to invest in the business. Business Value should be calculated on a regular basis so that strategy can be built around the target Business Value milestones. Businesses are independently valued on a PE multiple basis approach, which has two aspects, both the quantum of profits and the PE multiple applied. Both aspects must be considered in strategy formulation, so there needs to be a business valuation in the monthly financial reports and analysis done to compared this to the financial model targets that underpinned the strategy.
Give Everyone Data to See their Progress Towards the Strategy
Businesses can gain great benefits by displaying and providing staff with live data on progress towards the Strategy and this feedback is a great facilitator of performance behaviour towards the strategic objectives. This feedback data on strategic measures and performance should improve the shared accountability for achieving satisfactory business outcomes. You should consider capturing and displaying real time data using mobile and desktop applications as well as visual displays throughout the offices and workplaces. It is a small capital investment with good returns. By showing strategic goals into expected weekly/monthly/quarterly outcomes, the people in the business can better respond to fluctuating trading or operational situations and get things back on track to meet or exceed their KPIS, targets and goals.
An International Business Mentor or Coach can help facilitate and develop you through the strategy process and the implementation and strategy performance review process.
David Cartney
International Business Mentors
June 2017