BetterWorks helps companies bridge the gap between strategy and execution. As the Product Manager of the BetterWorks strategic planning module, I had the opportunity to sit down with Don Sull, Senior Lecturer of Management Strategy at MIT Sloan School of Management, to discuss what companies need to do to improve their strategic planning processes.
Read the full Q&A below to learn insights from Professor Sull on how to bridge the gap between strategy and execution—just in time for the new year:
Vince: Why are strategy and execution so important?
Don: Companies set strategies to provide guidance to go from where they are today to where they want to be. Strategy is a very abstract statement of some guidelines that don’t, on a day to day basis, really affect the decisions that matter. Execution is about translating those broad set of guidelines and defining objectives for the company to pursue.
Two-thirds of all companies struggle to execute on their strategy. A strategy that doesn’t get executed isn’t a strategy.
Vince: It sounds like the biggest challenge companies face is executing on their strategy. Why is it so hard to do well?
Don: Many companies mis-frame the execution problem. When trying to solve for execution, most companies tend to focus on performance and alignment. But that’s too narrow. What these companies miss is the importance of agility and coordination.
Vince: Why is agility important?
Don: Companies focus too much on performance management. They over-index on driving performance down through the silos and haven’t thought hard enough about how execution requires agility. 33% of managers say that adapting to changing market circumstances is their greatest challenge. Most organizations either react too slowly to seize fleeting opportunities or mitigate emerging threats.
This results in mindlessly running through a five year gantt chart. If that would be true, you’ll be the first person to get to the wrong place.
Vince: It’s no surprise that businesses need to be more agile with their business strategy. Why is coordination so important in the execution equation?
Don: Over the past 20 or 30 years, companies have invested heavily in managing coordination with external parties, through supply chain, ERM, and other systems. There has always been a need for internal coordination. But the rise of social networks, like Facebook and LinkedIn and technology is making coordination and collaboration a lot easier.
One thing that I’m excited about is how OKRs and the BetterWorks platform promote transparency. Transparency serves as a simple lightweight mechanism for coordination. The basic notion is that people can easily see how they are connected. People can see each other’s commitments and how their commitments connects up to the company’s strategic priorities.
Of course this has always been possible without technology, but it’s really hard. All the information was locked in paper or someone’s head. Companies had to lean heavily on managers, people’s familiarity with social networks and geographic proximity to disseminate information. You needed people to be co-located, to be in the same office, and it’s just mechanically difficult.
Vince: So the takeaway is that companies should reframe what it means to be successful at strategy and execution by also balancing coordination and agility. Let’s take a step back: as companies are going through their strategic planning process, what’s one simple rule that they should follow today?
Don: Start ruthlessly prioritizing your strategies. Focus on three priorities. There’s a famous story of Steve Jobs working with the team for a three day workshop to identify 10 things they should focus on. And then, he’d say, “we can only get three done.” If they’re not ruthlessly prioritizing already, if they’re kind of chasing a lot of rabbits, the odds are they’re not going to catch any.
Vince: We definitely want to catch rabbits. That’s a great rule to abide by. On the flip side, when you’re advising companies on their strategic planning processes, what is a common mistake you see companies do, that they should stop?
Don: Most companies focus too much on the strategic planning process. Stop adding so much structure to the process. People tend to equate structure with strategic execution. When I ask to see someone’s strategy, I tend to see a big, thick document with mounds of data. That’s a good input to the process, but you should try to distill things down to their essence. The end product should be the handful of objectives. There’s a couple of metrics for each of these, how they hang together as a story, and that’s really all companies need.
Stay tuned for the second part of my Q&A with Professor Sull, where we discuss top questions you should ask during your strategic planning process for 2017!