5 STRATEGY EXECUTION SKILLS EVERY BUSINESS LEADER NEEDS
December 2, 2021 / Category: Communication
Successfully implementing strategy within your organization is not a simple task. It often requires tools, skills, and frameworks to allocate resources, measure performance, manage risk, and execute strategy. Business leaders should be prepared to face these complexities. Below we bring you some steps to develop your strategy execution skills and experience. If it’s morale, connectivity, job satisfaction, efficiency, and teamwork you’d like to enhance, do connect with us for a personalized program to pull your team(s) together.
It’s often said a corporation’s strategy is the most important component in whether it will successfully reach its goals. While it’s true that identifying the right strategy is essential to running a business, it’s not the only part of the equation that matters. Strategy execution—the art of implementing a strategy as planned—is also vital.
Successfully executing complex strategy is so critical that professionals with a track record of organizational strategy implementation are often in high demand. Taking the steps to develop your strategy execution skills and experience can enable you to fill that demand.
Below is a look at the key strategy execution skills every business leader should have, along with the steps you can take to develop them.
ESSENTIAL STRATEGY EXECUTION SKILLS
1. Navigating the Tension Between Innovation and Control
Successfully executing a firm’s strategy requires trade-offs, including which opportunities to pursue, which customers to prioritize, and where to do business.
In addition to these important decisions, business leaders face a fundamental tension between the need to innovate to stay relevant and control operations to ensure strategies are successfully implemented. Learning how to balance these two needs is an essential execution skill.
Implementing a “levers of control” framework can help guide decisions, which offers four levers that can be manipulated to facilitate either innovation or control.
To facilitate innovation, business leaders can use the levers of:
- Belief systems: These communicate what people should do and how they should act as they strive for optimum performance. They commonly take the form of credos, mission statements, and core value statements.
- Interactive control systems: These are formal information systems managers use to involve themselves in subordinates’ decisions and focus organizational attention on emerging threats and opportunities.
To facilitate control, business leaders can use the levers of:
- Boundary systems: These communicate what people shouldn’t do as they pursue performance objectives. They take the form of codes of conduct and other formal systems.
- Diagnostic control systems: These are formal information systems managers use to monitor organizational outcomes and correct deviations from preset standards of performance.
2. Mastering the Four Ps of Strategy
The meaning of the word “strategy” varies according to the context in which it’s used. This is primarily due to the fact that a business’s strategy can be leveraged for several primary purposes, collectively known as the “four Ps of strategy”:
- Strategy as perspective communicates an organization’s larger mission and purpose and inspires pride in employees.
- Strategy as patterns of action describes a business’s ability to identify information about changes in the competitive landscape so it can adapt and stay relevant.
- Strategy as position is the competitive position a business takes in the marketplace, including its value proposition and differentiators.
- Strategy as plans refers to the specific goals and measures a business communicates to its employees.
All business leaders should aim to master these four dimensions. Doing so can allow them to communicate and execute strategy across channels effectively. Firmly understanding these components can also better position a leader to pull the levers of control and innovation.
3. Aligning Key Jobs with Strategy
Although business leaders are responsible for overseeing and implementing organizational strategy, it would be impractical for them to carry out each distinct task. For the same reason managers must delegate tasks to team members, business leaders must delegate key strategy tasks to employees.
To accomplish this, business leaders need to be adept at designing jobs that align with specific elements of their organizations’ strategies. A well-designed job can ensure employees have the right mix of control, accountability, influence, and support to succeed.
One tool you can use to design jobs that closely align with strategy is the Job Design Optimization Tool (JDOT) created by Harvard Business School Professor Robert Simons, who teaches the online course Strategy Execution.
4. Measuring Value Creation Beyond Financial Performance
To determine whether an organization is effectively hitting its strategy goals—and whether its strategy is positively impacting the business—it’s important to have a clear monitoring process. Without measurement, it’s impossible to know if the strategy being pursued is the right one. This is a key component of executing one of the four Ps: strategy as plans.
Well-designed diagnostic control systems allow leaders to measure and monitor performance. But merely measuring financial performance ignores intangible assets, such as research capabilities, brand loyalty, and customer relationships. The most successful companies also measure customer perspective, process perspective, and learning and growth perspective, each of which produces value for an organization that can’t be easily measured in financial terms.
5. Managing Strategic Risk
All businesses are subject to risk—particularly high-performing, innovative businesses with high-pressure cultures. This makes risk management an essential part of all business operations, including strategy execution.
The three primary sources of risk to be aware of and account for are:
- Operations risk: The likelihood an operational error will interfere with the flow of a business’s goods and services
- Asset impairment risk: When an asset—whether financial, physical, or intellectual property—risks losing a significant portion of its current value
- Competitive risk: Changes in the competitive environment that could impair a business’s ability to create value and differentiate its offerings
Effective strategy execution requires understanding these risks and how they might influence both an organization and its strategy. Various tools can aid in performing risk analysis, such as a risk exposure calculator, which helps pinpoint a business’s potential problem areas. Likewise, internal controls, boundary systems, and diagnostic control systems can be leveraged to track and manage risk.
WHO NEEDS STRATEGY EXECUTION SKILLS?
While strategy execution is often discussed in the context of business leaders and executives, other professionals who can benefit include:
- Mid-level managers and functional leads: Strategy isn’t only implemented on a company-wide basis; individual departments, teams, and verticals within an organization must also execute strategies. Current and aspiring managers or functional leads can improve their teams’ performances by developing their own skills.
- Entrepreneurs: Building and scaling a business requires exceptional execution. This is especially true in the earliest days of a startup’s life when the team is small.
- Consultants: Strategy execution is so essential that many organizations hire consultants with strategy execution expertise to carry out their corporate strategy. Consultants who develop strategy execution skills can potentially add a lucrative new source of revenue to their businesses.
DEVELOPING YOUR STRATEGY EXECUTION SKILLS
While there are many resources you can use to learn how to design effective strategy, there aren’t many dedicated to teaching strategy execution. With this in mind, completing a course or workshop that’s highly focused on strategy execution is one of the most effective ways to build your skills.
The online course Strategy Execution was specifically designed with the skills above in mind. Those who complete it walk away with a firm understanding of the skills, tools, and frameworks needed to allocate resources, measure performance, manage risk, and execute strategy.
Third Level can help you build an aligned and high-performing work environment. Let us help you develop strategies for your employees to perform at an elite level. Schedule an appointment today. Find us at Third Level Facebook Page.