Getting Strategy and Its Execution Right

We are operating in a tumultuous world with a lot of fog on the horizon. It’s never been more challenging to predict the future. But that’s exactly what we need to do as leaders of businesses, products, and functions: Be intentional about the future we are creating, make bets on how to win in our fields, and lead the way forward.

Your strategy is how you will realize your vision in the coming years and where you will allocate resource and focus attention to do so. A robust strategy provides radical clarity on what you won’t do so you can concentrate energy where you can win.

Strategy development is messy work. A strategy is a set of choices, and the hard part is often identifying valid alternatives for sustainable value. Culture norms, attachment to the current choice, and inertia can hinder teams’ ability to consider potential paths to their vision.

The company’s overall strategy drives the strategies for business units, product families, go to market, technology, customer experience and more. Each of these aspects of the business warrants long-range thinking, and each must align its long-range outcomes to company outcomes.

Developing strategy is both art and science

Research and data are important, but lived experience and judgment are equally important. Developing the strategy is simple but not easy because it involves making bets on the future and choices for where you will focus effort.

A good strategy provides radical clarity on what you won’t do so you can be most successful. To develop your explicit strategy, allow time for the team to identify, weigh, consider and compare paths and options.

• Given competitive pressure points, what is the best way to win?
• Given market opportunities and risks, what is the ideal situation in the future?
• Given enterprise strategy, what must be elevated to achieve it?
• Given alternatives for resources, what’s the smartest choice?

Aligning on the strategy is a pre-requisite to executing on it, and a common syntax for strategy makes alignment possible. If your organization has 6 or 7 different frameworks for strategy, it actually has none. No one knows how to reconcile them or which one trumps the others at decision time.

A strategy has several canonical elements:

1. Horizon: The time period for achievement and for which you’re defining future outcomes.
2. Narrative: Your beliefs, related trends, and the drivers that inform your strategy.
3. Pillars: The 3-4 primary levers you will pull or routes you will take to win.
4. Business Outcomes: Measurable business impacts you expect at the end of the horizon for each pillar
5. Assumptions & Risks: Assertions about the state of your world that must be true for the strategy to be realized and negative potential that would block achievement
6. Investment Plan: The resources and efforts it will take to realize the strategy

Each element is important to the definition, utility, and achievement of the strategy over time. By using a common structure for strategy across the organization, you can demystify what strategy really is as well as fortify strategy creation and coherence.

Your strategy doesn’t live in isolation. It may line up to a company strategy or business unit strategy, or it may require other teams to create those strategies in unison with yours.

Because strategy attempts to define a future state, it must be both codified and re-evaluated on a frequent basis as markets and facts evolve. That’s where OKRs come in.

Strategy drives OKRs, but OKRs aren’t strategy

OKRs activate the strategy and define which parts of it we will execute in each quarter. They are a mechanism for aligning time and effort to the strategy right now. One of the pitfalls in simply stating the 5-year strategy is no one knows where to put their efforts in the next 90 days — OKRs drive clarity and alignment on what is first and most important in the near term to achieve your strategy in the long term.

Because OKRs focus on aligning outcomes, they help you avoid one of the largest strategy execution gaps: No one knows the outcomes needed and the output never adds up to strategic outcomes. The yellow side of the table below shows a typical strategy-activity path where tasks gets done but product and distribution don't improve. OKRs help teams think through the outcomes that drive strategy, as you see in the blue side of the table.

OKRs help us iterate forward with speed and agility toward our strategy as the world changes. They put the strategy into motion now and help you test assumptions. Strategy is a future destination; OKRs are the GPS that help you get to your destination.

Map your OKRs to the strategy, and — where appropriate — your key results to a given outcome. As you reset OKRs for a quarter, bring your strategy into the conversation: Did the key results prove or disprove your assumptions? What new risks arose? Are the results adding up to the long range outcomes as expected?

Strategy execution is purposeful achievement

When the long-range strategy drives current quarter objectives and results, and those OKRs in turn drive actions, organizations achieve their strategies. As simple as it sounds, most companies don't achieve their strategy because they don't intentionally drive the clear link between these elements — they leave it to chance.

More often than not, the strategy is not well understood below the senior leader level and has no impact on the week-to-week actions of the broader organization — this is a recipe for failure. (What did your last employee survey say about how well the strategy is understood?)

Strategy execution comes from a set of operating behaviors, rituals and actions that focus attention on the organization’s intention — its strategy. These collectively are the organization’s operating rhythm, and their purpose is to ensure its execution of the strategy.

A slow, sloppy operating rhythm will result in slow, sloppy strategy execution. If the strategy isn’t threaded through your OKRs, MBRs and weekly meetings, then you’re using a great deal of resources and wasting a great deal of time without executing on your strategy.

As we stand on the cusp of recession, no organization has time or resources to waste and most have important transformations and opportunities to execute on. Getting strategy and its execution right should be every organization's new year’s resolution.

Let us show you how WorkBoard can help you with setting strategy and improving your operating rhythm — or drop me a note and I'm happy to share!