It’s true, Strategy execution is not rocket science. The problem is that consulting companies who want to own the keyword “strategy”; wants to show this as a big complex thing in this world that they can bill their clients with millions of dollars by putting the army of consultants.
In a nutshell, Strategy its about “where you will earn money from” and “how you will earn it” in present and future. Your strategy largely depends on the stage of your company. As Ried Hoffman puts in, every company goes through the following stages:
1) Family 2) Tribe (3) Village (4) City (5) Nation
When you are family or at the tribe stage, your strategy is to
(a) Validate that your product or service has demand in the market
(b) Generate revenue to survive OR raise the money from bank/VC to survive for the next 12 to 24 months.
(c) Try to find the repeatable sales & operational model for your product/service
When you are at the village stage, your strategy is to
(a) Create a repeatable model to do sales and service your customer
(b) Keep doing it faster and better
And when you are at the later stage of company growth, ie at “City” stage or “Nation” stage, your strategy is not just to generate the cash from existing product/service, its also about creating new products/services adjustment to your existing market OR to creating new products/services that will diversify your business.
But, is there a guarantee that your strategy will help you to become the market leader. No, because it also depends on the market/economic cycle and conditions. But if your execution cycle matches with the market/economic cycle(means your timing is right), your company will be the part of the those few success stories.
To deliver your strategy at any particular stage, you have a model with 4 standard steps: 1) You identify your vision(the big-arrow) for 12 months(when you are at “Family”, “Tribe” or “Village” state) or next 36 months vision(when you are at “City” or “Nation” state) 2) Once you define your vision, you identify the 3 to 5 major company-level goals(also called focus areas or strategic objectives) that will help you to achieve our vision(the big-arrow) 3) The 3rd step is to identify the major project/programs/objectives that will help you to achieve either of our company-level goals. And define metrics & milestones that will help us to achieve those project/programs/objectives. 4) And the 4th and last step is to follow the review cadence(process) to make sure that work gets done on the defined milestones under the defined project/programs/objectives.
In most of the companies today I talk to or work with at qilo, the above stated 4 simple steps are not followed or followed partially. Coming from the software development background, where today software is delivered in Agile fashion; its a surprise for me. If a small to complex piece of software can be delivered nowadays with high predictability; what stops companies from delivering their annual or 3-year strategy in the agile fashion?
I see 3 major reasons for it:
1. The CEO, Strategy Head/PMO/Chief of Staff is unaware that there could be a better way to deliver the 12 months or 36-month strategy.
2. The CEO, Strategy Head/PMO/Chief of Staff knows there is a better way, but reluctant to try and do the required change management.
3. The CEO, Strategy Head/PMO/Chief of Staff knows there is a better way, but don’t know the exact know-how.
In case of option 2 & 3, companies either hire an independent consultant or hire a big consulting firm to help them. Today with the help of technology backed solution, companies can deliver their strategy on a year-on-year basis without much external help. The only thing which is required is the willingness to change and try – because “if you will not change, nothing will change”.
We often hear the term ‘Business that isn’t growing is dying’. But is it really true, or is it just a way to create an unnecessary hype around the culture of expansion and commercialization?
The truth is that no business can survive in stagnancy. It must constantly change, evolve and keep up with market expectations and industry trends. As Jeff Bezos (founder of Amazon) mentioned,
“In today’s era of volatility, there is no other way but to re-invent. The only sustainable advantage you can have over others is agility, that’s it.
Because nothing else is sustainable, everything else you create, somebody else will replicate.” So it is clear that no company can just create a product and service, and expect lack of competition. The only way to survive in a competitive environment is to constantly grow and adapt to changes, but what does growth really mean? Is it only revenue growth and expansion, or can is it a more holistic form of growth?
Let’s look at different dimensions of growth that a company needs:
The most common concept when anyone thinks of growth regarding business is revenue growth. Revenue growth for business is extremely important. It’s a competitive age. Businesses not only have to compete with each other to stay ahead of the curve, but they also have to compete to hire the best and most productive and talented employees. To hire and even retain such talent, their salaries should be lucrative with constant raises and benefits. With growing inflation, revenue growth is an absolute necessity. Furthermore, the lack of revenue growth can lead to declining profits, equity, employees, goodwill or a combination of all.
While revenue growth is extremely important it’s not the only factor of growth in a business. It is equally important that each individual within the company grows in terms of skills, expertise, and productivity levels. This highlights the growth culture within a company, and growth culture is crucial. Consider this: employees join a company for salary, and benefits, but also to learn, grow and improve. If a company does not challenge its employees to strive, learn and constantly perform better, then they lose interest, and the work atmosphere becomes stagnant. The best and brightest minds don’t even want to work at such a company, and if this situation occurs, you will see all your talent flocking to change jobs. That is why a growth culture with constant challenges and aspirational objectives is a must in every organization.
Every business that needs growing revenue, can only achieve it by growing customers. Businesses need to grow their marketing strategies, sales efforts, and overall performance to attract new clients while retaining old clients. But that isn’t possible if your customer outgrows your company’s ability to meet its demand. Often market demands for certain products increase, and if a company cannot grow to scale their supply, they lose their clients to a competitor. This is especially true for B-to-B models.
GROWTH OF TECHNOLOGY
We cannot consider any advancement in today’s age without talking about technology. Going digital and constantly evolving technologically is essential for every company. More than a billion people are connected on social media platforms, one-third of the population uses smartphones, and Millennials and Gen Y are all about technology. If a business doesn’t constantly keep up with the latest innovations, then it stands to lose an immense number of potential customers. Technology provides the benefits of higher engagement, increased data security, better time management, and detailed analytics, just to name a few. The importance of digitization is so widely recognized that most companies are expected to have a Chief Digital Officer soon. And the only way for a business to survive in this environment is to follow these trends or lead in creating new ones through the adaptation of the best and latest technology.
Now that we have looked at the different aspects and dimensions in which an organization has to grow, we can see that they are all interlinked, and crucial to the survival of any business. But how can such growth be achieved?
The simple(but not easy) way is execution. Any company that isn’t focused on the discipline of execution cannot grow. But how can a business instill a culture of execution? The answer lies in OKRs (Objectives and Key Results). OKRS are a tool or a framework used to define the main goals or focus of a company and measure the performance based on the execution of these defined objectives. But how should these objectives be defined? The same goals are often not necessary for every individual as they are for the company. One of the ways to implement OKRs is to do it in various levels.
These can be:
What is the vision of the company? Why was it founded and what is its purpose? This is what the driving focus of everything should be in the long run. This decides what your company’s primary objectives are, in alignment with the vision of the owner or founder, which truly defines the purpose of that company. Some key aspects of these are:
Summarizes the vision of the company.
Set for 1 to 3 years aligned with your vision
We don’t define the Key results for company objectives.
These are objectives set for the CEO They can be objectives like revenue goals, minimum growth targets, expansions, acquisitions, increased goodwill etc. They must be in alignment with one of the company objectives.
These are objectives set separately for every team in the company. They are created in tandem with the annual objectives of the company, in order to ensure their execution. Every team through it’s own set of objectives and key results works together to contribute towards the company’s annual goals. These OKRs are monitored by executives and can help them quantitatively judge the progress towards the company’s objectives. Some key aspects of these are:
Objectives set quarterly.
Managers own the objective and key results are owned by people under him or in different teams.
Growth initiatives which need cross-functional collaboration can also be created as OKR’s.
Used to align the aim of every team to the aim of the company.
Individual Learning OKRs
These are objectives set for every individual employee which fulfills the learning agenda of the individual. If every employee works towards its success, through individual learning goals, it clearly enhances their professional growth and in turn their skills & capability. This allows for smooth execution and easy monitoring of performance. Some key aspects of these are:
Very precise in nature; Easy to understand.
Very short term, perhaps monthly.
No company is formed with a static vision or purpose. Every company has a vision of expanding and growing. Hence growth is not only aspirational but, as the article highlights, essential for every company. As business leader & author, Jack Welch states in his book Winning, ‘Change before you have to’, so that you can remain ahead of the curve and grow. But the only way to consistently achieve growth is to maintain the discipline of execution.
With varying departments, competing employees, bureaucratic processes, execution becomes increasingly hard. That is why a strict framework is necessary to maintain an upward trajectory. There is no better or more customizable tool for this than OKRs. If your business isn’t growing in this fast paced competitive age, it surely is dying. OKRs can be the weapon to stop this stagnancy and ensure constant growth.
We interviewed around 91 Strategy, PMO and Business Performance Heads to understand what actually it takes to actually implement the strategy? While companies will do internal brainstorming or will take the help of consultants to define the strategic direction of the company. But when it comes to execution and actual implementation of the plan that will help them to achieve that strategy, things move terribly slow.
And we didn’t conduct a typical survey but talked to them 1:On:1 to understand the challenges they face. And did analysis after converting our conversations into text and doing text and sentiment analysis on top of that text.
Here are the top 5 reasons which came out of this analysis that leads to the delay in achieving the required revenue growth expected because of strategic direction are:
Missing implementation plan
Existing company culture
Lack of Agile Process to think, act & refine the execution plans
1. Managing Change
Why change management is required? Because you are dealing with humans. Humans which are at top most senior positions with big egos and “know it all” attitudes. The main aim of a strategic plan is to change the way people are doing things and building new habits; with the hopes that it will enable the change in process and see better results from operating in a new way. But things dont move and people struggle to change their habits.
Solution: When you introduce your strategic plan (or operational plan, or merger & acquisition plan, or cost reduction plan – you get the idea – any plan that introduces new initiatives), it’s important to remember that most people aren’t involved in the planning process. The way the plan is initially introduced needs to be carefully crafted so as to address concerns and the what’s-in-it-for-me right away to start out on the positive path to change adoption.
2.Missing implementation plan
You won’t believe, but apart from the sales number plan for the next 3 or 5 years, the plans to achieve the sales targets are not there. For me, it was a surprise; why? Because
(a) Creating the plan is difficult
(b) No one likes to take the ownership of taking the action items
(c) There is no standard, easy & repeatable way to creating the plans linked with strategic directions/goals.
Solution: Implement frameworks like OKR to create a recipe for defining the implementation plan. OKR as framework helps your teams to think, plan, execute the plans every quarter to achieve your strategic goals.
3. Resource Allocation
Doing the resource allocation is one of the toughest jobs for business heads who are ultimately responsible for allocating people to programs and projects created to achieve the strategic objectives. There is no visibility at the strategy head and business unit head level where their people are actually busy and who are the people who can be allocated.
Solution: Take the help of tools and technology to determine the people who can be allocated to the initiatives, programs, and projects.
4.Existing company culture
Company culture cannot be quantified, but you can feel it. Most of the organizations over the years have become bureaucratic, hierarchical and lacks the speed, agility & candor to achieve the required execution.
Solution: Involve an awesome Organizational Behaviour & Development Professional in your strategic planning and implementation phases.
5. Lack of Agile Process to think, act & refine the execution plans
Now, this is where almost all companies struggle. Strategy heads own agenda of strategy, don’t own the people who do the required execution on initiatives, programs, and projects that help us to achieve the strategic goals. Teams(people from different functions) who are execution the plans don’t come together enough on their own and do the required review and course correction of the action plan, which results in the delay of execution.
Solution: Take the help of a habit-forming technology tool that helps you apply the agile process of execution in your teams.
The future of strategy execution is about how you can implement a simple, repeatable process that can be applied at scale to get execution done on your strategic goals.
The Brightline™ Initiative is a coalition led by the Project Management Institute together with leading global organizations dedicated to helping executives bridge the expensive and unproductive gap between strategy design and delivery.
Like the Agile principle which helps in delivering the Software, Brightline has listed the 10 principles that can help in achieving the Strategy.
Those who are not from a software background might not know that before the Agile practices of developing the software came to picture, the software was developed using the model called “Waterfall model”, where software was delivered taking 9 to 12 months. And by the time the software was shown and delivered to the customer, customer requirements and expectations from the software have been changed. Then came the Agile principles, where software was delivered to customers every 2 weeks. This has lead to a better understanding of what the customer wants out of software and reduced the overall cost in developing the same.
Now think of Strategy deliver in your company. Being from the Software background, I can clearly see the Strategy a.k.a the business plans a.k.a growth goals are still getting delivered in the waterfall model. Many Strategy Heads, CEO offices and PMO offices are living in “Waterfall model” age, where the focus is on Governance, following the same old processes that cause the delay in the actual execution. But I feel with Brightline initiative, the thing might change, and it will bring the Agile like principles in delivering the Strategy.
Here is the brief summary of Brightline 10 principles :
Principle #1 – Acknowledge that strategy delivery is just as important as strategy design: Strategy is not just a fancy word for the business plan. Bringing your strategy a.k.a business plan needs more than just annual offsite. The implementation plan to get execution done needs to be created in a way that it actually leads to the getting execution done.
Principle #2 – Accept that you’re accountable for delivering the strategy you designed: Once you have defined the strategy, your focus should shift to overseeing the progress of implementation so that the strategy delivers results and achieves its goals. You need to know what is your company execution velocity and how the program managers are performing on the identified growth goals and the people who are moving slow on the execution.
Principle #3 – Dedicate and mobilize the right resources: Strategy deliver is a team game. To achieve your strategy to get executed, you need to enable your program managers to easily identify & build the team that will help you achieve the growth goals/objectives which will ultimately help in achieving your strategy.
Principle #4 – Leverage insight on customers and competitors: No plan survives contact with the enemy. To course correct your growth goals and objectives, keep talking and listening to your customers and leverage insights from your competitors. Otherwise, you will end up executing a plan which might not be relevant to current market conditions.
Principle #5 – Be bold, stay focused and keep it as simple as possible: Your team may end up losing focus on the growth goals and objectives which will help you achieve your strategy because of day-to-day operational urgencies. By keeping the plans simple at the same time bold will help bring back the focus on execution.
Principle #6 – Promote team engagement and effective cross-business cooperation: To gain the buy-in on executing the growth goals you need to involve the people who will be actually doing the execution. As a leader, CEO and Strategy head, you need to communicate with them, engagement them in the process of creating the plan and keep explaining to them why we are doing what we are doing.
Principle #7 – Demonstrate bias toward decision-making and own the decisions you make: Many plans fail and keep the pace with changing business conditions. At qilo, while implementing our solution across different companies, we have seen that it’s far difficult to update those metrics and milestones that help the team to achieve the growth goals. And this happens because the process of making these updates are complex and bureaucratic. By keeping the governance process simple, you can always empower your people to change/adjust the plans per the internal and external business conditions.
Principle #8 – Check ongoing initiatives before committing to new ones: Strategy is delivered by identifying few strategic initiatives and then linking the growth goals that will help you to achieve those strategic initiatives. Many times leaders end up starting the new strategic initiatives before the previous initiatives see the light of the day. Avoid committing to new things before you finish the previous one.
Principle #9 – Develop robust plans but allow for missteps — fail fast to learn fast: Even the best people and teams fail to deliver. It’s up to the CEO and CEO office, Strategy head to create the environment where failures are acceptable and seen as learnings.
Principle #10 – Celebrate success and recognize those who have done good work: This is where most companies fail. CEO office, Strategy Heads and Program managers fail to recognize the people who are actually executing the growth goals and demonstrating the habits that are leading to execution. People who are involved in the execution of strategic plans are doing those in addition to their day-to-day operations, recognizing them is crucial for the success of achieving your growth goals.
When we started qilo’s journey, we had one single focus and agenda. How can we help companies perform better! During this journey, we met hundreds of leaders across industries and geographies. Did research with over 5000 people – Here are some learning’s from the experiences we got;
One theme, which clearly emerged as inputs from the leaders, was execution accountability. On an average a management team invests thousands of critical man-hours in boardroom/ meeting rooms, the question to be asked, are they genuinely productive?
Over 90% of the respondents we asked this question said no. So what could be the reason?
Lack of belief/ Clarity in the Vision
Limited say in creating the plan
Fear of conflicts
Yes Minister Syndrome
PTB- Passing the buck
Limited know how
Recently there has been a trend in companies that divide the workforce into 2 buckets – Planners and Doers. In some companies, they work as a team and in some still hierarchal. Depending on their culture, I have categories them as following types
The Houdini’sType – This team pops up while creating an annual plan and asks for data from across functions and post creation of the plan does a vanishing act. And to be seen during the review meeting sometimes. These type of companies build 2 classes amongst team (unknowingly) the corporate and rest of others.
Living on the edge Type– these are a set of companies, who do not believe in strategic planning or vision and find it a waste of time. (Believe me, they do exist and in masses.) These companies focus on a month-to-month plan with no strategic vision. Some of them pretend to be non-conformist (Strategy Atheist) but deep inside they lack know how at a leadership level.
King with the golden robe Type– These are set of companies where decision making resides in one corner office. Whether the company is doing well, bad is decided upon which side of the bed the king woke up from. The companies are highly perception and ego driven. The single focus for the teams is to please the king.
The Change Makers– they are a group of people closely aligned with the purpose and leaders vision. They fail together and succeed together. These companies align their teams with their purpose first and the drive execution accountability. They work in a network of teams and the leadership team rolls us the sleeve whenever required and run the shop floor.
Globally, the shelf lives of companies are getting shorter and shorter. Product Power and Proprietary Power will not just be enough. The key differentiator of a company will be the way you work and get the Strategy Execution done.
Always remember the pace and the quality of execution will decide if your team is working for you or your competitor!
A design pattern is a general repeatable solution to a commonly occurring problem. In the context of OKR (Objective & Key Results) many companies fail at the implementation stage as to how to arrange the OKR’s in a way that can lead to successful implementation and adoption of the framework.
This challenge will come to you when you have understood the basics of OKR and probably have read a couple of books and articles on the subjective. When implementing the OKR in your company, you need to remember that the organization is not made of different parts and pieces but it’s a complex adaptive system. And this system is run by people who have different motives and need to be satisfied at gut, mind and heart level. Any change we bring into the system needs to be carefully thought through.
The question here we are trying to answer is how you will arrange the OKR’s in your hierarchical complex system. There are 4 basic design patterns which can be applied to implement OKR’s
Team-based OKR Pattern
Top-to-bottom flow pattern
Top-3-level flow pattern
1. Silo Pattern: Each individual owns the objective and all the keys results are owned by the objective owner herself. Its simple to implement and easy to modify but again encourages silos in the company.
2. Team-Based OKR Pattern: Its different from silo pattern in a way that the Key Result are either owned by (a) objective owner reports(team members working under objective manager). Or the Key Result are owned by someone else working under a different manager, but working with the Objective owner to achieve that Objective.
3. Top-to-bottom Cascade Pattern: In explaining this pattern (which means a way to arrange OKR’s) I am assuming that your company has 4 level hierarchy. This OKR design pattern connects the top level execution agenda with the bottom level execution. This means that the agenda of execution is cascaded down till the last mile of the company. But it also assumes that most of the execution is taken care by the bottom layer of the company.
4. Top-3-level Cascade Pattern: Again assuming that your company has 4 level hierarchy. In this OKR pattern, we connect top 3 levels of the company and cascading stops at the 3rd level of the company. And the 4th level will have their OKR’s based on silo pattern. It is based on the understanding that if the top 3 levels of the company are in sync then we will have a better flow of the agenda.
If you are struggling to implement the OKR successfully, we will be happy to have a conversation with you and help you in achieving success in OKR implementation. Feel free to drop mail talk[at]qilotech[dot]com