When it comes to business strategy, the big problem is not development, it is execution.
Strategy execution is fundamentally about aligning everyone—and everything— to the company’s strategy and goals.
In a recent survey of more than 500 executives, a whopping 80% of respondents said their strategy was not well understood – even within their own company.
Improving this is mission-critical for every CEO, since FORTUNE magazine estimated that about 70% of CEO terminations are caused by failure to execute.
CEOs do not generally think of the Human Resources function as a driver of strategy execution. However, with the advent of a new generation of technology, HR executives now have the opportunity to change that.
First, HR executives can dramatically improve goal alignment. According to Betterworks’ 2018 State of Continuous Performance Management Survey, more than 90% of respondents agreed that aligning employee goals with company priorities is critical to company success.
This starts with making the corporate strategy and everyone’s goals transparent. When everyone can see the corporate strategy and goals, they can—and will—align their personal goals. In addition, HR executives will now be able to measure goal alignment. They will have the data and analytics to prove their contributions to improving strategy execution.
Goal transparency also increases trust and collaboration. 92% of managers surveyed agree that cross-functional goal visibility allows teams to work together more effectively. For example, when everyone in sales can see everyone in marketing’s goals—and vice versa—alignment naturally improves.
Second, HR executives can dramatically improve performance management. Virtually every company agrees that their current performance management process is not optimal. According to an HR.com survey, two thirds of companies rated their current process as average or below.
Improving performance management is greatly helped by making the shift to Continuous Performance Management.
One of the benefits of Continuous Performance Management is that it allows companies to increase strategic agility. Fast-lane companies are revising their strategy and goals quarterly. When you develop strategy four times faster, you can respond four times faster… assuming that your company can dynamically realign everyone—and everything—to capitalize.
In the Betterworks survey, 86% of managers agree that goals and priorities in their companies can change quickly and that it was important to be able to realign.
When you run the business in quarterly sprints, the traditional “once per year” performance management process become an impediment to strategy execution. Many companies now recognize that traditional performance management is a bottleneck. HR executives must address this issue, and the best way to improve agility is to implement CPM.
The second benefit of CPM is that individual performance improves. The discipline of regular one-on-one meetings, structured conversations, and improved coaching produces dramatic results. According to McKinsey, 68 percent of respondents agree that ongoing coaching and feedback conversations have a positive impact on individual performance.
In summary, the combination of a transparent goal alignment process and Continuous Performance Management is enabling fast-lane companies to dramatically improve strategy execution. Given that companies realize only 60% of the potential value of their strategic initiatives, this has huge upside for every company.
Imagine a company where 100% of the people invest 100% of their energy in activities that are 100% aligned with the strategic plan. Imagine being able to quickly realign the entire company to capitalize on new opportunities or respond to competitive threats. Then, imagine having real-time analytics to measure and optimize goal alignment.
HR executives can now help Chief Executive Officers and Chief Strategy Officers “connect the dots” between the corporate strategy and every individual’s objectives and priorities. HR executives can be seen as change leaders who can dynamically realign the entire workforce as the corporate strategy changes.
Finally, HR can now help companies unleash the accelerating power of alignment. After all, alignment is the ultimate competitive advantage.