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Regardless of industry, most business leaders regard speed as critical.
Jocelyn Davis is Executive Vice President for Research and Development at Boston-based Forum Corporation, a workplace learning and management development organization.
Her team is responsible for developing learning programmes in the practice areas of leadership development, sales force effectiveness, service excellence and advanced workplace learning methods.
She also consults with a variety of companies including General Electric, Eli Lilly, Unilever and Microsoft. She writes here about what enables companies to implement their business strategies swiftly and successfully.
Great news! About 70 per cent of strategic initiatives fail.
Last year, we dug into that statistic and found that it’s well supported. Here are a few data points from the dozens of research studies we reviewed:
- 70 per cent of reengineering initiatives fail.
- 80 per cent of major systems investments don’t get used or don’t deliver the intended impact.
- In one study of more than 100 companies, 52 per cent of change projects failed, and one-quarter of the companies reported a 92 per cent failure rate.
When we studied what “failure” looks like, we found that it comes down to two things:
- Few initiatives achieve even two-thirds of quantifiable performance results intended.
- Most initiatives run way beyond their deadline.
These tendencies hold for all types of organizations in all parts of the world. In other words, the great majority of companies today are facing an execution problem: the results of strategic initiatives they undertake are lacking or late – or both.
“Okay,” you say, “why is that great news?”
Because, given the large number of companies that are failing at execution, you have an excellent shot at making your own company (or business unit or team) stand out from the crowd. And, the financial benefits are significant.
Here’s even more good news: Our research shows that the path to achieving faster, more effective execution is not the complicated one most people might think of: it’s not primarily a matter of installing more efficient (expensive) technology systems, nor is it a matter of dragging the organization through lengthy (expensive) process-reengineering efforts. Rather, it’s a matter of ensuring that every leader in the organization has the skills and the mind-set necessary for mobilizing people in service of the initiative.
We found seven leadership actions that predict faster, more effective execution of strategic initiatives and projects. Successful leaders take these actions both when they launch an initiative and repeatedly throughout its life:
Increase clarity
- Describe the what, why, who, how, when, and where of the initiative.
- Craft relevant messages about the initiative that communicate its importance and value.
Foster unity
- Communicate about the initiative in a compelling way.
- Create opportunities for others to engage in dialogue about the initiative.
- Involve people in shaping the execution plan.
Promote agility
- Build into the execution plan opportunities to assess progress, identify obstacles, and correct course as necessary.
- Take steps to reduce the impact of unanticipated events on execution.
We see these actions get results in organizations of every size across all industries. For example, consider the following story of a department in a large medical devices company.
The situation
After a spinoff, the Logistics department of the Respiratory and Monitoring Services (R&MS) division of a $10 billion medical devices company found itself in limbo. As a legacy of the previous structure of the company, it was now located several hundred miles from headquarters, and it was acting as a shared service. The remote location and fragmented focus prevented the department from playing a strategic role in the business.
This was a big problem for the organization.
“Ironically, faster, more effective execution of strategic initiatives and projects requires slowing down at certain points.”
Logistics plays a pivotal role in any manufacturing firm’s ability to execute strategy. Logistics typically collaborates with Marketing to determine how much product will be needed to meet customer needs. It also liaises with Manufacturing to ensure that an adequate supply of product is turned out. Clearly, Logistics needs to be a hub, not a satellite. The department in question was isolated, however. Its mission was unclear, its resources spread thin, its ability to generate value hamstrung. And the company suffered as a result.
The solution
Integrating this Logistics department with the larger organization was paramount, so the VP of Logistics and Service relocated the team to R&MS headquarters. Once settled, the team embarked on the challenge of refining its strategic direction and intent – and expanding its capability to act on that direction and intent.
As a starting point, the team worked on achieving clarity, unity, and:
- To achieve clarity, team members conducted a number of strategy training sessions. They cascaded the company’s strategy to R&MS, and then detailed what the strategy meant for the team itself.
- To achieve unity, the team developed a mission statement. “Collaboration” was identified a core means of achieving the team’s mission of ensuring on-time delivery of life-saving products. Team members began to act in ways that generated unity across departmental boundaries. It was, after all, mission-critical that they do so.
- To pursue strategic speed with agility (willingness to turn and adapt quickly while keeping strategic goals in mind), the team focused on its own climate in training sessions.
The results
The benefits of the team’s actions have been even greater than anticipated. “We’ve had face-to-face conversation and collaboration with not just Marketing, but with colleagues in Quality, Regulatory, and Clinical. We better support all functional groups. We are integrated,” said the director of Logistics Planning and Operations.
The team’s collaborations have improved forecast accuracy and strengthened support for new product launches. (In fact, the team realized it needed to position itself as dedicated to new-product development.)
The team simply would not have seen such strong results had it not increased its focus on clarity, unity, and agility. On the strength of the results, the team has scheduled additional trainings to ensure that it continues to increase the value it adds for the organization.
Ironically, faster, more effective execution of strategic initiatives and projects requires slowing down at certain points. But, the resulting increases in clarity, unity, and agility pay off in overall acceleration in execution.
October 2011.