Translating strategy into action

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Translating strategy into action

• Kate Sayer
• 20 September 2006

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Do companies implement their strategies?
Source Renaissance Worldwide/Business
Intelligence Survey 1998-1999
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Strategy to action

• Communicate
• Focus on people
• Fit budget process to strategy
• Link to day to day management

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Developing vision strategy
Sensible and appealing picture of the future
VISION
LEADING
Logic for how the vision can be achieved
STRATEGIES
Specific steps and timetables to implement the
strategies
PLANS
MANAGING
Plans converted into goals and financial forecasts
BUDGETS
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Communicating the strategy

• Keep it simple
• Use metaphors
• Say it in many different ways and media
• Repeat it often
• Explain apparent inconsistencies
• Listen as well as tell

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Involve as many people as possible

• One of the main reasons why the balanced
  scorecard is necessary is that more people many
  people should help determine, and should be
  aware of, the assumptions on which our actions
  are based. For the balanced-scorecard concept
  adds a strategic dimension to management control
  by involving many people in the discussion, it
  enables all of us to understand why we believe in
  our choice of what we want to become.
  Olve, Roy, Wetter

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Making the strategy real

• A strategy map for a Balanced Scorecard makes
  explicit the strategys hypotheses. Each measure
  of a Balanced Scorecard becomes embedded in a
  chain of cause-and-effect logic that connects the
  desired outcomes from the strategy with the
  drivers that will lead to the strategic
  outcomes.
• The Strategy-Focused Organization by Kaplan and
  Norton 2001

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Cause and effect hypotheses

• Strategies and action plans are based on
  cause/effect hypotheses
• If we send out more direct mail packs, we will
  raise more income
• Mapping the strategy highlights the cause/effect
  relationships
• We need to test the hypotheses
• They might be wrong!

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Practical steps
Desired outcome
Risks and controls
Steps and actions
Investment needed business case
Resources needed
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Example
Increase efficiency
What success will look like
Indicators of success
What changes do we want to make?
Alternative courses of action
Risks and uncertainty
What resources do we need?
Benefits, impact
Contingency plans
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Support functions

• Need to understand how they contribute to the
  strategy
• Enabling the achievement of corporate objectives
• What are the outcomes they should aim to achieve?
• Develop their own goals who are their customers?

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Budget process

• Often based on departmental structure
• Does not fit to strategy
• Transitional phase old structure plus link to
  resources needed for outcomes
• Headline figures only
• Plan how you will use staff

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Monitoring implementation

• Should test hypotheses of cause and effect
  relationships
• Gather evidence to support or negate hypothesis
• Use to facilitate dialogue - feedback and
  learning
• Help to manage uncertainty and risk
• Information leads to change or a decision

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Signs of a strategy-focused organisation
Management meetings spend time on the strategy
Change agendas structure to monitor strategy
Feedback and learning
Measures and information
Build into appraisals
Focus on outcomes
Change business planning
Activities aligned to strategy
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Sustaining the implementation
Translating thevision
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Discussion

• What are the barriers to implementing the
  strategy in your organisations?
• How will you overcome them? Think about
• Communication
• Winning people over
• Budget process
• Getting it on to the agenda

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References
The Strategy-focused Organization By Robert S
Kaplan and David P Norton Published by Harvard
Business School Press 2001 ISBN 1-57851-250-6
Leading Change by John P Kotter Harvard
Business School Press 1996