October 5–7, 2011 SHRM 2011 Strategy Conference

The Role of Leadership in Translating Strategy to Execution

Mason Holloway • October 5, 2011

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Agenda

Where are we now and how do we fail?

The 4 C’s of execution

Capturing the performance loss

Q&A and Wrap-up

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How Important is it?

The Institute for Corporate Productivity study, the Top Ten Critical Human Capital Issues of 2011:

1. Leadership development 2. Succession planning 3. Strategy execution/alignment 4. Managing/coping with change 5. Talent management. 6. Innovation and creativity 7. Performance management 8. Knowledge retention 9. Engagement 10. Coaching

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How is Strategy Like a Promise Unfulfilled?

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Strategy – Where we go Wrong

Section Title (12 point Arial; color = white)

* Harvard Business School Publishing, 2005

7.5% Inadequate or unavailable resources

5.2 % Poorly communicated strategy

4.5% Actions required to execute not clearly defined (no clear outcomes)

4.1% Unclear accountabilities for execution

3.7% Organizational silos and culture blocking execution

3.0% Inadequate performance monitoring 3.0% Inadequate consequences or rewards for failure or success

2.6% Poor senior leadership

1.9% Uncommitted leadership

0.7% Other obstacles (including inadequate skills and capabilities)

63% Average Realized Performance

37% Average Performance Loss

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9 out of 10 Strategies Fail!

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The Four C’s of Strategy Execution

Clarify

Communicate

Cascade

Confirm

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The First C - Clarify

Clarifying the Strategy is made up of two important parts:

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• Testing your strategy

• Aligning your strategy

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Clarify - Test your Strategy

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Does your strategy fit with (and support):

Your mission? Does the strategy support the story of “what you do?”

Your vision? Does it tell the story of where want to go?

Your values? Does it honor who you are (including the market and employee perspectives)?

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Align with your Mission, Vision and Values

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Past Performance Current Performance Predicted Performance

Vision How has the workforce translated the vision into action in the past?

Where have the disconnects occurred?

How have you addressed this in your new strategy

How closely does our current strategy support our vision?

What factors prevent better alignment?

Does the new strategy enable the vision to resonate in the current market and workforce?

What will the workforce need to do with the strategy in the future to align more closely with the vision (In performance terms)?

Should the Vision be updated/modified to reflect future trends?

Mission How has our mission been carried forward or been changed by our past strategies?

How does our performance against our current strategy align with our mission?

How will disconnects be dealt with in the new strategy?

What effect will modifying our mission (if the new strategy requires it) have on the workforce?

Business Model

How well has our workforce executed strategy within our business model?

How well is our workforce aligned to drive the strategy within our current business model?

What can (or should) be changed (either business model or workforce) to drive greater success given the new strategy?

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Align with your Human Performance Capability

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Align Human Performance to your Strategic Plan in 3 Steps:

STEP

STEP

STEP

Identify Performance STRENGTHS that you can Leverage Identify and include key performers from high performing functions in the planning process Get input on how their performance could support or extend opportunities to drive toward the organizational goals and vision.

Look for performance gaps that if closed would create opportunity

Focus on answering the question: if this performance gap were closed, what incremental or even transformational opportunities would become possible? (e.g new initiatives based on excess capacity.)

Identify performance capability that does not currently exist, but is necessary for successfully executing the strategy

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The Second C - Communicate

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On your mark… Get set… GO!!

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Communicate your Strategy

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How are strategic decisions are being made?

1 All data weighted by GDP of constituent countries; respondents who answered ‘don’t know’ are not shown; figures sum to 100% because of rounding.

Source: July/Aug 2006 McKinsey Quarterly survey of business executives

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1

2

10

11

23

52

Other

By frontline employees

By sector leaders

By CEO or equivalent

By business unit leaders

With formal strategic planning process

By small senior group, including CEO or equivalent

% respondents1

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We have to educate

Communicate to the Head

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Is “telling” enough?

People throughout the organization must understand the ‘What, Why and How’ of the strategy.

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Communicate to the Heart

What does the strategy MEAN to me? What will change? How will it affect me? What should I fear? What should I look forward to?

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Communicate to the Hands

What is the call to action? What do we want them to do?

EXACTLY?

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The Third C - Cascade

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Cascade - From Vision to Reality

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Convert your Strategic Vision into Capability in 3 Steps:

• Consider the overall vision and strategy as well as the strategic vision or your organization.

• Document the top 3 initiatives that your organization must achieve in order to accomplish the strategy..

STEP

STEP

STEP

Identify Priority Plans

Move from Initiative to Goal • Determine and set goals that would naturally help you accomplish the

Initiatives you identified. • For each of the initiatives, identify 2 goals that, if achieved, would drive

results and lead to achievement of the initiative.

Clarify and Align

• Ensure that yours are specific, measurable, and can be easily and clearly communicated and understood.

• Align to team performance capabilities using an approach like Performance DNA to assess.

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Cascade – Identify and Prioritize

Use a brainstorming and prioritization approach to translate your strategy into initiatives

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Brainstorm Prioritize Affinitize Align & Assign

Priority #1 Owner: Results needed: Performance resources: Measurement: Contribution to Goal: Governance

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Cascade – Move to Initiatives

Make your initiatives measureable with goals and success descriptors

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Goals That Lead to Plan Achievement

How will I know if we are successful?

How will I know this (result described in previous

column) has occurred?

Initiative #1 Goal #1

Goal # 2

Initiative #2 Goal #1

Goal # 2

Initiative #3 Goal #1

Goal # 2

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Cascade – Make your Goals Real

Link your goals to current capability Identify gaps Assign owners

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Goal Critical Capabilities

(Human Performance)

Team Members with Right

Capabilities Available?

If Yes, Key Team Members to Support

This Goal (* indicates lead)

Goal #1: Yes No

Goal #2 Yes No

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Cascade – Goals to Outcomes

Link your goals to measureable outcomes Identify measurable outcomes at the individual level Identify measurement criteria

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Goal Key Team Member Identified

Outcomes Required for

Goal Achievement

Measurement Criteria

Goal #1:

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The Fourth C - Confirm

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“However beautiful the strategy, you should occasionally look at the results.” - Winston Churchill

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Confirm your Strategy

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Confirm your strategy in two parts by:

• Measuring the impact of your strategy

• Monitoring the ongoing progress of initiatives

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Measure and Monitor

• Monitor progress toward your strategic objectives • Measure the achievement of outcomes for initiatives

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Capturing the Performance Loss

Section Title (12 point Arial; color = white)

* Harvard Business School Publishing, 2005

7.5% Inadequate or unavailable resources

5.2 % Poorly communicated strategy

4.5% Actions required to execute not clearly defined (no clear outcomes)

4.1% Unclear accountabilities for execution

3.7% Organizational silos and culture blocking execution

3.0% Inadequate performance monitoring 3.0% Inadequate consequences or rewards for failure or success

2.6% Poor senior leadership

1.9% Uncommitted leadership

0.7% Other obstacles (including inadequate skills and capabilities)

63% Average Realized Performance

37% Average Performance Loss

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Questions?

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Wrap up

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CONT

ACT

Mason Holloway, Director Beacon Performance Group

www.beaconassociates.net mholloway@beaconassociates.net

443-995-4797