“Strategy Without Execution Is a Dream.”
A strategy only has a value when it is executed and delivered. Repeatedly research finds that around 70% of strategies are not completely delivered. Tracking your strategy’s execution is, therefore, a key success factor at the board and executive level. But, on the whole, tracking strategy execution is done poorly if at all.
For example, some business case processes have a ‘tick box’ approach where those proposing an investment ‘tick’ one or more boxes to show which strategy they are aligning to. These strategies are often stated in very general terms – e.g. “Reduce operating costs” or “Increase speed to market”. If you can claim a link, you can tick the box.
From a strategy execution point of view this process is useless. The results are too high level to be meaningful and they cannot be effectively compared across different projects in the portfolio. Whether you plan to deliver an operational saving of $100,000 or $100 million you still tick the same 'strategic alignment' box.
Tracking each project's strategic contribution at the detail level
To track your strategy’s execution you need a more detailed strategic contribution assessment approach. You need to know exactly which stratagems (strategic themes eg Financial Control) your project aligns to and then, at a more detailed level, which specific strategic imperatives (eg Reduce operational costs) your project contributes to, how much and how.
It is not sufficient to know your project ‘reduces operational costs’ you need to know how it is reducing costs and how much cost it is reducing and how important reducing cost is to the strategy. And this is not difficult to do.
A Strategic Contribution Assessment Tool
Your strategy can be summarized into 30 to 40 ‘strategic imperatives,’ each weighted for their relative strategic importance and organized under their appropriate 'theme' or stratagem. The result is a simple one-page matrix of priority weighted strategic imperatives by stratagem.
Then for each strategic imperative three levels of contribution are defined to be used as the contribution multiplier. For example, for reducing operational costs,
- a saving of <$5 million may be scored ‘1’,
- a saving of $5-$20 million may be scored ‘2’
- and >$20 million would be scored ‘3’.
Now you can differentiate between the $100K and $100m savings example above when assessing their relative strategic contribution.
This process is very simple to execute.
- You generate a matrix and a scoring guide.
- Each project then assesses how it contributes to each strategic imperative and justifies each score above ‘0’ (ie no contribution).
- Then by multiplying each strategic imperative’s weighting by the contribution score and summing all of the results you generate a comparable total strategic contribution score that clearly measures the strategic contribution and relevance of each project.
Controlling strategy execution
A Strategic Contribution Assessment Tool not only shows each projects’ strategic imperative score, it also cumulatively shows which strategic imperatives (and stratagems) are being addressed (and identifies any that are not being addressed), how much they are being addressed and by which projects.
You are now in control of your strategy’s execution and can eliminate any gaps in your strategy's execution . Also, if you change any aspect of your strategy you can immediately see which projects are impacted.
And there is one more bonus. You can now also easily identify strategically irrelevant projects at the outset. Our and other’s research has found that anywhere between 15% and 80% of in-flight projects have been found to be strategically irrelevant and should not have been approved or funded. Identifying irrelevant projects early reduces capital waste and thereby increases your overall returns on capital investment.