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The KPI.org Blog

Tim Johnson Tim Johnson

Tim is a Balanced Scorecard Institute Senior Director of Consulting with over 32 years of experience in management and professional services management consulting. Areas of expertise include strategic planning, portfolio management, performance measurement/management, project management and business process improvement.

Why Strategic Planning Fails - Part 4

By: Tim Johnson

Jun 20, 2018 66 Views 0 Comments FacebookTwitterLinkedInGoogle Plus

This is the fourth installment in a blog series that discusses potential pitfalls that could hold you back from being fully successful in your strategic planning efforts.  The first was ensuring that you have full leadership support before you begin the strategic planning initiative, the second was generating needed buy-in across the organization and the third was making sure you build that strategy in a way that it can be executed effectively.  As I started the first blog of the series, most things that I have been successful at in my life have been because I did it the right way and using the right tools.  At the Balanced Scorecard Institute, we have the “Nine-Step Process” to building a strategic management system.  We believe in this approach and we have helped hundreds of clients develop comprehensive strategic plans with a management system that enables them to effectively execute strategy.  I myself have worked with over 80 organizations and have seen very successful strategic planning efforts and also those that were less so!  I wanted to share some observations as to where those that were not as successful went wrong along the way. 

The fourth pitfall is not prioritizing—biting off more than you can chew!  The Japanese have something called "Hoshin Planning."  The idea is that they go through a very rigorous strategic planning effort to find a handful things that they need to accomplish to be successful.  And then everyone gets on board and they execute those critical few strategies across the organization.  It provides focus. Not that I am advocating that you find just a couple strategic priorities to focus on strategically, but the point is that there is a limit to the amount of resources available to focus on strategic transformation.  People have day jobs that are mostly about driving the organization operationally.  They each do not have 16 hours of work day to get everything done that you would like!  So instead of identifying 50 initiatives to accomplish, identify first what resources you have year-over-year and then build a roadmap on when initiatives will be executed that is going to guide your efforts.  Like climbing a mountain, we first have to understand what we need to do to get to “base camp 1” and then from there to the next succession of base camps until we are at the top of the mountain!  By spreading the organization to thin you run the risk of doing a lot of things, but not getting anything done!

If this pitfall sounds familiar, then you might be interested in our Balanced Scorecard Professional Certification workshop which gives practitioners the tools and skills they need to help prioritize in tough economic times. 

Over the next few blogs we will explore three additional potential pitfalls I have seen that hold organizations back from realizing the many benefits to developing a strategy and a supporting strategic management system.

Missed Part 3 of the blog series? You can read it here
Tim Johnson Tim Johnson

Tim is a Balanced Scorecard Institute Senior Director of Consulting with over 32 years of experience in management and professional services management consulting. Areas of expertise include strategic planning, portfolio management, performance measurement/management, project management and business process improvement.

Why Strategic Planning Fails - Part 3

By: Tim Johnson

Jun 13, 2018 394 Views 0 Comments FacebookTwitterLinkedInGoogle Plus

Developing an "executable" strategic plan

This is the third installment in a blog series that discusses potential pitfalls that could hold you back from being fully successful in your strategic planning efforts.  The first was ensuring that you have full leadership support before you begin the strategic planning initiative and the second was generating needed buy-in across the organization.  As I started the first blog of the series, most things that I have been successful at in my life have been because I did it the right way and using the right tools.  At the Balanced Scorecard Institute, we have the “Nine-Step Process” to building a strategic management system.  We believe in this approach and we have helped hundreds of clients develop comprehensive strategic plans with a management system that enables them to effectively execute strategy.  I myself have worked with over 80 organizations and have seen very successful strategic planning efforts and also those that were less so!  I wanted to share some observations as to where those that were not as successful went wrong along the way. 

The third pitfall is developing an “executable” strategic plan.  For me, this is the most glaring gap I see when reviewing strategic plans.  It jumps off the page when the strategy in not built in such a way to support successful execution.  There are several key areas that really require doing it the “right way.”  The first key element to mention is understanding the key future assumptions that are driving the strategy.  Linking the strategy to future assumptions is the only thing that makes “strategic planning strategic!”  So many strategies end up sounding like operational plans because they fail to link it to their analysis of the future environment in which the organization will  exist.  The problem is, if you are not lifting your gaze and scanning the horizon you could be missing out on significant opportunities or worse yet, not seeing impending threats!  If we made buggy whips in 1910, and our strategy was all about making better buggy whips, more variety, high quality, faster to market, etc.; we would miss out on the fact that they were building car assembly plants and missing a glaring opportunity to redefine our business.  The second major miss is developing “measurable objectives.”  These usually start with words like increase, decrease, reduce, etc.  These are words that we can measure.  Many strategies have initiative words in their objectives like “create,” “develop” and “build.”  These identify actions that have a beginning and an end and not necessarily what we can monitor to track our strategic transformation.  The last key building block is in linking initiatives to objective targets.  I had a client who had an objective to “generate 5 million more customers in 5 years.”  A great measurable objective!  But when pressed on what initiatives supported the objective, we determined that the ones they had in place were only going to generate 75 thousand new customers.  They failed to link what they said they needed to accomplish with the initiatives they identified would get the job done.  Bottom line is that if you said that the targets are what you need to achieve, then make sure you are going to do things to reach those targets!  If you want a strategy that you can measure, will guide the organization, and is sure to create the success you have identified that you need, then it is important to build it the right way!

If this pitfall sounds familiar, contact us. We have been helping clients for many years, and can help connect the dots and work with you to customize our approach to best meet your needs for future success.

Over the next few blogs we will explore four additional potential pitfalls I have seen that hold organizations back from realizing the many benefits to developing a strategy and a supporting strategic management system.

Missed Part 2 of the blog series? You can read it here. You can read Part 4 here.

Tim Johnson Tim Johnson

Tim is a Balanced Scorecard Institute Senior Director of Consulting with over 32 years of experience in management and professional services management consulting. Areas of expertise include strategic planning, portfolio management, performance measurement/management, project management and business process improvement.

Why Strategic Planning Fails - Part 2

By: Tim Johnson

Jun 5, 2018 408 Views 0 Comments FacebookTwitterLinkedInGoogle Plus

Generating Buy-in

This is the second installment in a blog series that discusses potential pitfalls that could hold you back from being fully successful in your strategic planning efforts. The first was ensuring that you have full leadership support before you begin the strategic planning initiative. As I started the first blog of the series, most things that I have been successful at in my life have been because I did it the right way and used the right tools. At the Balanced Scorecard Institute, we have the “Nine-Step Process” to building a strategic management system. We believe in this approach and we have helped hundreds of clients develop comprehensive strategic plans with a management system that enables them to effectively execute strategy. I myself have worked with over 80 organizations and have seen very successful strategic planning efforts and also those that were less so! I wanted to share some observations as to where those that were not as successful went wrong along the way.

The second pitfall I have experienced is people not buying in to the strategy as it is developed. As mentioned in Part 1, too many times I have seen a leader or small cadre of leaders piece together a strategy and then expect everyone to understand it and get on board. This is not what works! People tend to own what they help create. The more people you can involve in creating the strategy, the more people you have who understand it and support it in the halls and by the water coolers.

There are some key places where involving more people is easy to do and very helpful. The first is in generating ideas up front concerning the future environment in which the organization will exist. Externally what are the opportunities that will be available in the future? What are the threats that need to be considered and mitigated? Internally what are the strengths and weaknesses that could have the most strategic impact on our future success? By getting people to provide input you are first informing them on the process and second telling them that their ideas are valued. You can also involve people beyond the leadership team when developing measurable objectives, KPIs and initiatives. You can find people willing to step up and “own” an objective or to lead an initiative. Again, the more people that are involved, the more traction you are creating within the organization to help drive change and execution.

If this pitfall sounds familiar, then you might be interested in our Strategy Execution—Success Through Leadership workshop which addresses major obstacles and challenges faced in strategy efforts, and techniques on how to overcome them or let us facilitate your group to build support for the system.

Over the next few blogs we will explore five additional potential pitfalls I have seen that hold organizations back from realizing the many benefits to developing a strategy and a supporting strategic management system.

You can read Part 3 here.  Missed Part 1 of the blog series? You can read it here

Tim Johnson Tim Johnson

Tim is a Balanced Scorecard Institute Senior Director of Consulting with over 32 years of experience in management and professional services management consulting. Areas of expertise include strategic planning, portfolio management, performance measurement/management, project management and business process improvement.

Why Strategic Planning Fails - Part 1

By: Tim Johnson

May 30, 2018 508 Views 0 Comments FacebookTwitterLinkedInGoogle Plus

Gaining Senior Leadership Support

My father gave me an important piece of advice once that I will always remember.  “Always have the right tool for the job!”  Of course, I had to re-learn that lesson through the years a few times, but it really is good advice.  Most things that I have been successful at in my life have been because I did it the right way and using the right tools.  In the military they teach us to follow the process and meet the standards.  Of course, there are exceptions to any rule, but generally there are proven approaches available that help guide us to effectively and efficiently accomplishing what we undertake. 

At the Balanced Scorecard Institute, we have the "Nine Step Process" to building a strategic management system.  We believe in this approach and we have helped hundreds of clients develop comprehensive strategic plans with a management system that enables them to effectively execute strategy.  I myself have worked with over 80 organizations and have seen very successful strategic planning efforts and also those that were less so!  I wanted to share some observations as to where those that were not as successful went wrong along the way.  Over a series of seven blogs I wanted to share with you a handful of observations that could hold back a successful strategy initiative.  The seven that I will share are not meant to cover every potential pitfall, but they are definitely some of the most common fails I have seen in my experience.

The first pitfall has to do with not gaining Senior Leadership support before you begin the effort.  One of the first principles we stress in our Balanced Scorecard Professional Certification program is that if the leaders are not out in front of the strategic planning effort, it has zero chance of being successful.  I once had an executive approach me during our first break at a strategic planning offsite and tell me “I don’t like where this is going!  If I want them to have a strategy, then I will give them one!”  I was a bit taken aback and explained that if he was just to “pontificate” his strategy for his team to execute, then he would not be generating the needed buy-in to execute the plan later.  It would be his plan and his alone.  While he ended up eventually coming around, it could have been catastrophic if the key leader was not on board with the process and approach.  Additionally, not only should leaders be “okay” with developing strategy, they must be the biggest cheerleaders and talk about it in meetings, town halls, board meetings and any other opportunity they have to share the organization’s path forward.  Everyone needs to understand that the leaders completely support the effort, and the strategy will be executed.  Everyone involved must understand that there is “no turning back” and that its time to get on the bus!

If this pitfall sounds familiar, then you might be interested in our Balanced Scorecard Professional Certification course where leadership development, communications and change management action is discussed and becomes part of the strategy process or our Strategy Execution—Success Through Leadership workshop which addresses major obstacles and challenges faced in strategy efforts, and techniques on how to overcome them.

Over the next few blogs we will explore six additional potential pitfalls I have seen that hold organizations back from realizing the many benefits to developing a strategy and a supporting strategic management system.

You can read Part 2 here.

David Wilsey David Wilsey

David Wilsey is the Chief Operating Officer with the Balanced Scorecard Institute and co-author of The Institute Way: Simplify Strategic Planning and Management with the Balanced Scorecard.

Which Tax Change Means Reassessing YOUR Strategy?

By David Wilsey

Apr 19, 2018 694 Views 0 Comments FacebookTwitterLinkedInGoogle Plus
2018 Tax LawTim Johnson noted in his recent strategic planning article that 85% of Fortune 500 companies from 1955 no longer exist today. This is because they failed to keep up with a changing world. The assumptions upon which they based their strategy on were no longer valid due to a change related to either market demands, customer needs, or technology. If your organization wants to avoid a similar failure, it is critical that you periodically evaluate the strategic environment that you work in and make sure that your strategy is not based on similarly invalid assumptions.

The new tax law that was passed in December 2017 in the U.S. offers an example of a change that could possibly disrupt a key assumption you might have made when you developed your strategy. While most organizations will not make any major changes in this case, it still helps demonstrate the types of strategic questions that you might be asking yourself if you work in certain sectors. 

Do you work in the non-profit sector? Since the standard deduction has been raised significantly, some fear that there be a decline in charitable donations. This aggravates the problem that has arisen with the generational change happening across our society, where those who have been the strongest donors in the past are aging and passing on to a new generation that likes to give in different ways. The strategic question you may ask is, where can we make up for projected shortfalls in revenue? How must our contribution mix be changed in the future?

Do you sell luxury goods? One accountant I spoke with who had done a year-by-year comparison said that clients that make more than $750k per year were getting quite a windfall, while the middle brackets were coming out close to even. Another friend I know who does million-dollar home remodeling said that he as already seen an uptick in business. The strategic question here is, how can we tap into the increase in capital available across certain industries?

Do you work in, or sell to, the Federal government sector? Non-defense spending is down for multiple reasons already – a huge reduction in revenues will likely only reinforce this trend. The strategic questions might be how can we increase our efficiency or improve our quality to reduce our cost structure? Or should we refocus on different sectors?

Are you an accountant or a tax lawyer? At least in the short term, some folks can plan for a big boost in business as they help everyone figure out what to do. The strategic questions here are, where are the biggest targets of opportunity? How can we align our services and branding to align to these changing market conditions?

Is your business connected to divorce, education, or the moving industry? Do you sell meals and entertainment to corporations? Do you sell depreciable property? Specific issues have been highlighted in the news that could affect very specific industries: alimony deduction rules have changed; 529 College Savings Plan’s can now be used for education other than just colleges; moving expenses are no longer deductible; rules for corporate meals / entertainment expenses and deductions for depreciable property changed significantly. Any of these changes could have an impact on certain organizations. In all these cases, the strategic questions revolve around, how can we succeed considering these changes?

Are you an architect or engineer? You’ll need a team of certified tax lawyers to help you decipher the new pass-through portion of the law, but I’ve already heard of organizations trying to add engineering services to their product line to gain certain tax advantages. Maybe this opens the door for partnering opportunities, or maybe a new consulting service offering to help organizations navigate in a new market place for them?

The point of this blog is not to educate you on the new tax law, as this is just a few highlights of the change. The point is that you might need to reassess your strategy depending on your organization and the assumptions on which you have based your strategic priorities. If any of the considerations listed above are relevant for your organization, I’d recommend you talk to a tax lawyer about the details and then consider what changes might be needed. There might be implications for some of the KPI targets you have set as you emphasize one strategy over another. There might be initiatives that need to be added or removed from your priority list. In some rare cases, there might be reason to refocus your efforts on a different strategy altogether. The key is that you continuously assess your strategic environment to see if any of the assumptions that were made to formulate strategy have changed, as you don’t ever want to be one of those organizations that gets left behind by a changing world.
Howard Rohm Howard Rohm

Howard Rohm is the Co-Founder and President of the Balanced Scorecard Institute. Howard is an author, performance management trainer and consultant, technologist, and keynote speaker with over 40 years' experience.

Obfuscating Objectives

By: Howard Rohm

Feb 15, 2018 1830 Views 0 Comments FacebookTwitterLinkedInGoogle Plus

One of our clients decided to build their strategy map and balanced scorecard themselves after some training. They created a draft strategy map with 12 strategic objectives, linked together in a cause-effect chain--the strategy map--that showed how value was being created for their customers and the owners of the business. A few months after the training, the number went from 12 objectives to 32. Why? – a lack of discipline around the strategy development process and a feeling by a few folks who did not attend training that “more is better”.

How many strategic objectives should there be on a strategy map? Ten, fifteen, twenty? Are more objectives better? How many are too many?  How few are too few?

A strategy map is a visual representation of a strategy—it’s a hypothesis of what an organization has to do to create value for its customers and owners. For a private sector business, the owners are the shareholders; for a mission-driven organization -- nonprofit or government -- the “owners” at the end of the value chain are the benefiting stakeholders, e.g., members of an association, citizens of a government.

Strategic objectives, when connected in cause-effect links, represent a strategy hypothesis that can be tested and progress monitored using strategic measures of performance—KPIs—developed as part of the strategy development process. A good strategy map requires good objectives.

Objectives are used to identify measurable strategic intended results; develop KPIs that measure strategy progress; identify, prioritize and track actionable initiatives; build employee accountability; and communicate corporate vision and strategy internally and externally. We’ve identified a set of best practices for creating strategic objectives and strategy maps from our training and consulting engagements worldwide:

  • Objectives are not start/stop activities or projects (those are initiatives)…objectives are continuous improvement activities that work together to produce value
  • Twelve to 14 objectives are a good number for a corporate strategy map (organization size doesn’t matter here)
  • Objectives indicate action and the potential for continuous improvement (Remember: strategic objectives are the DNA of your strategy—they make strategy actionable and understandable throughout the organization.)
  • Objectives should be balanced among the four perspectives in a scorecard
  • Objectives are “altitude sensitive”—if the strategic altitude is too high, it’s hard to translate “lofty” language into employee action…if too low, objectives will be framed in operational, not strategic, language
  • Prioritized strategic initiatives, linked to each objective, should propel the organization forward toward its goals and vision
  • Objectives should be measurable based on the associated intended results, to monitor progress toward accomplishment

Arguably one of the most important contributions to the science of management in the past two decades, strategy maps communicate the organization’s value proposition with clarity, both internally to employees so they can see how they “fit” in the organization, and externally to boards and other stakeholders.

Get strategic objectives and your strategy map right and your balanced strategic plan and strategy story will come alive quickly and clearly. These tools can help take your organization to the next level of performance.

You can learn more about strategic objectives and strategy mapping by reading our book, The Institute Way: Simplify Strategic Planning and Management with the Balanced Scorecard, or by attending one of our worldwide training classes.

Tim Johnson Tim Johnson

Tim is a Balanced Scorecard Institute Senior Director of Consulting with over 32 years of experience in management and professional services management consulting. Areas of expertise include strategic planning, portfolio management, performance measurement/management, project management and business process improvement.

Strategic Planning in the Healthcare Industry

By: Tim Johnson

Dec 8, 2017 3868 Views 0 Comments FacebookTwitterLinkedInGoogle Plus

Over the last 10 years we have seen a tremendous change in the healthcare industry.  Whether it is a shift in philosophy to focus on more value-based care or navigating the impact of implementing the Affordable Care Act here in the United States, significant shifts and changes have occurred and are occurring every day.  Given the relative unpredictability of how the healthcare market will change, is there really any use for those in the industry to go through a strategic planning initiative?  The answer is of course yes, but the real question is “how?”

To be successful in the future, no matter how turbulent the path forward may be, organizations need to create a vision based on the best future assumptions they can identify.  With any strategic planning effort is it really important to have at its foundation key assumptions about how the world will be different.  Organizations then can describe what they need to look like given those future assumptions, and then design a strategy to help them bridge the gap between where they are today and achieving that future success.  But if all our assumptions of the future are up in the air, then how can we really build a strategy effectively?

I would argue that in industries that are experiencing a lot of change it is even more important to be strategic!  Yes, there are many unknowns given the relative volatility of the US political landscape as it pertains to healthcare.  But there are some key assumptions that can be made that are relative certainties regardless of any potential future political or regulatory shifts?  If we can identify those “most probable” assumptions in the healthcare industry or in our particular marketplace, then it would be worth our time to identify them and begin building our response strategies accordingly.  I would like to present the follow set of ideas as examples of assumptions that most participants in the healthcare sector need to consider over the next five years and could be the basis for strategic discussion.  These are not meant to be all inclusive, but merely to demonstrate that there are fundamental assumptions that can be identified even in a marketplace where significant uncertainty exists.

  1. The need to provide ever increasing quality patient care will continue.  The focus over the next five years will continue to be on delivering highly impactful, cost-effective healthcare.  Whether it is driven by key stakeholder requirements or customer expectations, we know that successful players in the healthcare industry will be those that can generate healthy outcomes for their patients.  Fundamentality having strategies built around improved effectiveness and efficiency in delivering quality patient care will be a fundamental requirement in the future.  No real surprises but any strategic discussion in the healthcare sector must begin with patient care!  The point is that the ability to differentiate regarding healthcare outcomes will be the bases for any future success in the industry.

  2. Changing in customer volume and demographics will continue.  The fact is that the US population is going to continue to grow over the next five years.  In May of 2017, the US passed the 325 million mark and is expected to be over 332 million by 2020 (US Census data).  That means essentially there will be more people needing care in the future with some healthcare markets seeing fairly dramatic increases in patient populations.   We have seen a significant impact in demographic shifts in the US over the last five years and this trend will continue over the next five years as the increases in Hispanic and Asian demographic groups continues at a high rate.  How will these assumptions impact capacity requirements or service delivery requirements within the healthcare sector?

  3. Labor supply changes.  The US has seen labor supply grow by 2.6 percent per year over the last decade, but that trend will not continue.  Rand researchers (Karoly & Panis, 2004) have postulated that the growth of labor supply will only be around .04 percent over the next decade and will be even smaller the following decade.  Also, while the trend has been a more aging workforce over the last 20 years this will also change with the workforce being more evenly balanced across age groups in the future.  How will this impact the availability of skill workers and experience levels in the healthcare industry?  What does this mean for how we need to recruit and retain of workforce?

  4. Continued increase on wellness and prevention.  Significant increase in innovation with regard to nutrition for example will be driven by increase consumer demand for wellness. Patients are sharing that they want advice on weight management and diet therapies (PwC Health Research Institute, 2016) for example leading to increased focus on these services within the industry.  Smoking cessation and fitness programs are other programs that are already tied to health outcomes and will continue to be important in the future.  How will this trend impact the future services healthcare practitioners will provide?  Or the information they make available to their patients?

  5. Emerging technologies in the healthcare marketplace.  PWC reports that “the US health industry lags behind other industries, such as retail and telecommunications, in deploying emerging technologies, including artificial intelligence, drones and virtual reality but that this trend is about to change.” (PwC Health Research Institute, 2016).  Accenture reports that “the global healthcare industry in the year 2020 will be a highly connected environment powered by large data networks, cloud computing, and mobile devices. There will be widespread increases in the number of connected healthcare networks providing seamless integration between care providers, patients, pharmaceutical companies, health insurers, and other invested parties anywhere in the world. Care within this model will become more patient-centric, less expensive to provide, and more innovative.” (Meissner, 2013).  These assumptions would call for a need to invest in breakthrough technologies that impact how patient care is provided and operational business processes are managed moving forward.  This will also impact the types of skills needed in the future within the industry.

  6. Rising operating costs driven by government regulations and expanded capacity requirements will impact the financial viability of healthcare systems (Jonash & Ronanki, 2015).  Healthcare CEO's and COO's must find innovative was to drive revenue and decrease costs.  How will rising costs impact the future viability of healthcare providers?  How must they change how they do business?  In what areas must they innovate to reduce costs? 

I share these discussion points as merely a sampling of assumptions that could be discussed by healthcare industry players in formulating their 3-5-year strategies.  With proper research conducted, there are dozens of additional assumptions that we could discuss to really understand the future of the healthcare industry.  I provide these few ideas as evidence that even in an industry that is experiencing rapid, constant change, there is a need to really understand how the world will be different in the future.  To do so, we must first understand what assumptions can be made and set out to use a strategic planning framework to understand how our healthcare organization must transform in the future in the face of those assumptions.  Once we are able to articulate that future successful state, we can then work to understand what must be accomplished to get from where we are today to achieving the needed transformation that must take place in the next few years – our strategy becomes the path and the plan to future success.  


Sources: 
Jonash, Ben & Rajeev Ronanki (2015). The convergence of health care trends: Innovation strategies for emerging opportunities. Retrieved from: https://www2.deloitte.com/us/en/pages/life-sciences-and-health-care/articles/convergence-health-care-trends.html?id=us::3bi:confidence:eng:cons::::qQmDoWY2::77378163007585:bb:::nb

Karoly, Lynn A. and Constantijn (Stan) Panis (2004). The Future at Work: Trends and Implications. Retrieved from: https://www.rand.org/pubs/research_briefs/RB5070.html

Meissner, Armin (2013). The Global Healthcare Industry in the Year 2020. Retrieved from: https://www.mddionline.com/global-healthcare-industry-year-2020

PwC Health Research Institute (2016). Top health industry issues of 2017: A year of uncertainty and opportunity. Retrieved from:  https://www.pwc.com/us/en/health-industries/pdf/pwc-hri-top-healthcare-issues-2017.pdf

U.S. Census Bureau (n.d.). Retrieved from: https://www.census.gov/2020census


David Wilsey David Wilsey

David Wilsey is the Chief Operating Officer with the Balanced Scorecard Institute and co-author of The Institute Way: Simplify Strategic Planning and Management with the Balanced Scorecard.

How to Keep Lettuce Crunchy and Other Strategy Execution Lessons

By: David Wilsey

Nov 22, 2016 6352 Views 0 Comments FacebookTwitterLinkedInGoogle Plus
I learned two lessons in college that I still think about – one in the kitchen and one as a strategy execution consultant. My professor claimed during a cell biology lesson that if you leave iceberg lettuce in water for about 20 minutes its cells expand as they soak up the water. He said that many chefs knew that soaking lettuce in cold water made it seem fresher and crunchier but few understood that it was because the cells were packed to the bursting point.

I went home for the holidays eager to share this new lesson with my mother. This is where I learned the consulting lesson. 

My mother had been taught that in order to keep salad crisp, you should throw a slice of bread into the salad as you are making it and then pull the bread out just before serving. The thinking was that the bread soaked up the excess moisture that would otherwise lead to wilting.

When I shared my professor’s theory with her, I assumed that we would immediately begin saving a nickel per month due to all that saved bread. Instead I was surprised to find that my mother was not about to change the way she made salad because of something her son’s biology professor said, not even after I showed her that the lettuce didn’t wilt.

Strategy execution is about transformation. It is about the systematic implementation of the changes needed to move an organization forward. Unfortunately, as you try to convince people to change the way they do things, many of them react exactly like my mother did.

The change management field is built around several general principles in how to manage people through change: thoroughly communicate how/why/what change is happening, look for the “what’s-in-it-for-me” for employees, communicate using two-way dialog, remove barriers to change, celebrate success, describe a “burning platform”, etc. Strategy execution specialists bring a few more key approaches to these basic doctrines. 

Engage Around the Big Picture. A simple business case (e.g. this initiative will help us improve process efficiency and lower operating costs) often isn’t enough. To embrace change it helps to understand how a particular initiative is aligned with the overall strategy of the organization (e.g. we want to bring low cost healthcare solutions to those suffering from an ailment. If we can improve this process, the solution could be better, more consistent, and cheaper than anyone else in the market). Employees will be far more motivated to change if they believe in the strategy. Strategy professionals typically have the skills needed to articulate and communicate that story.

Make Strategy Everyone’s Job. Strategy is a team sport. Too many strategy professionals think that because they are good at it they should do all of the work themselves. But good strategy execution relies on others to implement. I can tell my mother that this is a better way or (if she were an employee) order her to follow a new process, but as long as she can dismiss the idea as an outsider’s, change will be painful. Good strategy execution professionals understand that their job is to facilitate a consensus around a shared vision rather than simply dream up a vision in a vacuum.

Pick Your Battles. Strategy is about focus and strategic thinkers should be good at prioritizing. The worst thing you can do is overwhelm employees with dozens of major changes at the same time and then when things go badly decide that it’s not worth the trouble. Better is to pick the most important changes and implement them at a pace that the organization can handle. Then think through and communicate the timeline, action steps, and resource changes that will happen as the change is rolled out.

Facilitate a Sense of Inevitability. The weakest client outcomes in my career happened when there was uncertainty about whether or not the senior-most executives were on board. A well-meaning strategic planning director that isn’t visibly supported by the executive team will struggle to move an organization forward even if they do everything else right. On the other hand, if the executive team has thoroughly and repeatedly communicated that this change is going to happen with or without you, the inertia of inevitability will convince people to jump on the bandwagon even if other change management mistakes are made.

David Wilsey David Wilsey

David Wilsey is the Chief Operating Officer with the Balanced Scorecard Institute and co-author of The Institute Way: Simplify Strategic Planning and Management with the Balanced Scorecard.

Identify Strategic Thinking with One Simple Question

By David Wilsey

Jul 29, 2014 20143 Views 0 Comments FacebookTwitterLinkedInGoogle Plus
I used to work on a research team for a company that produced an operational risk software product. I always found it interesting how different members of the same team answered an important question: what do you do?

Here is the way Person A and Person B responded:

Person A: We do research on the internet and enter data points into an operational risk database.

Person B: We help banks understand operational risk and how much related capital they were required to reserve by providing an analytical software solution that models operational risk in the global market.

Technically both answers were correct. For the data model to be statistically significant, the product needed a certain number of data points, and our research team’s job was to research and categorize examples of operational loss in order to populate the database and make the model work. And yet, somehow Person A’s answer was always unsatisfying for some people.

It might be tempting to say that Person B was simply exaggerating the importance of their work by describing it in terms of the mission of the product line, but I think that misses an important point about the value of thinking strategically no matter what your position with the organization is. Person A was simply describing our job. Person B was describing how we created value. Different ways of describing our work was actually a window into the strategic thinking style of the team members.

From Daniel Pink to Simon Sinek and others, much has been said and written about how people are more motivated and productive when they understand the larger context for their work. Understanding why they are doing the work is profoundly important for creative professionals to feel a sense of engagement. Helping employees transition from narrowly thinking about what they do to more broadly thinking about what they are trying to accomplish can improve organizational performance in a number of ways.

The good news is that strategic thinking is a teachable skill. In our BSC Certification courses, we begin by teaching the basic semantics of strategy. At first, students mechanically append or replace the “task” language that most are comfortable with (we need to develop a new service by milestone x) with language that reflects a higher level objective (we want to improve the customer experience; the development of a new services is one option for accomplishing that). Over time, mechanical semantics evolve into an instinct for intuitively thinking about the strategic context. As students change the way they think about strategy and action, critical thinking skills improve as well (e.g. if we are trying to improve the customer experience, is a new service really the best way to do it?). The transition for many teams from always focusing on tactics and actions to always starting with the big picture and working down can be quite profound.

For more about how to improve strategic thinking in your organization, see our Balanced Scorecard Certification Program or The Institute Way: Simplify Strategic Planning and Management with the Balanced Scorecard.
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