Closing the strategy-to-performance gap

Donna Clifford, Consultant at FE Associates, UK, outlines the seven rules in Turning Great Strategy into Great Performance and how they can be used to improve business strategies in organisations.

It is likely that behind your day-to-day activities, there is a strategy. It may be your organisation’s overarching company strategy or a quality strategy that you and colleagues have contributed to. Whatever the situation, the execution of a strategy is never final and managing it is an ongoing process, rather than an ‘every-now-and-then’ task. In their 2005 article, Turning Great Strategy into Great Performance, for Harvard Business Review, Michael Mankins and Richard Steele explains that as significant as the strategy-to-performance gap is at most companies, management can close it. To realise a strategy’s full potential, their framework was based on seven simple rules to adopt to close this gap.

Taking these seven rules, how can the quality practitioner apply them to ensure quality strategies are not lost in translation?

Keep it simple and keep it concrete

At most organisations, strategy can be a highly abstract concept and is not something that can be easily communicated or translated into action and is often whittled down to a vision and aspirations due to its complexity. But without a clear sense of where the company is headed and why, lower levels in the organisation cannot put executable plans in place. In short, the link between strategy and performance can’t be drawn because the strategy itself is not straightforward or sufficiently concrete. Take a look at your own quality strategy. Is the message clear and do you achieve the results you are aiming for? If not, consider the next rule (below).

Challenge assumptions

Assumptions we make shape and mould our actions and behaviours, and we can fall into a pattern of operating within the same set of assumptions over and over again because we continually see things with the same perspective. Break the status quo and think differently by looking for new perspectives. Ask yourself a series of why questions: why do you do something this way? Why are we not getting the results? Why can’t we change the way we do things?

Challenging the assumptions can help you to communicate effectively, solve problems and innovate.

Use a rigorous framework

To be productive, the dialogue between all areas of an organisation must have a shared understanding of the quality framework. Too often, although managers believe they have a shared vision, invariably have their own agendas and working practices, which conflict with each other.

Without a rigorous framework and a common language to link a business’ performance to operation, the performance gap forms. As a result, management can’t know whether a performance shortfall stems from poor execution or an unrealistic and ungrounded plan.

Take a moment to identify scenarios when you have experienced a lack of understanding to meet performance needs. What would it take to change the framework and language used so that everyone is on the same page?

Discuss resource deployments at the beginning

Challenge managers about when they’ll need new resources to execute their strategy. By asking questions such as “How fast can you deploy X?” and “How quickly will suppliers respond?”. By asking the right questions, forecasts and business plans are more likely to be realistic.

Identify priorities

To deliver any management activity successfully, managers must make thousands of tactical decisions and put them into action. In most instances, a few key steps must be taken – at the right time and in the right way – to meet planned performance.

High performing organisations make these priorities explicit so that each manager has a clear sense of where to direct his or her efforts. Make strategic priorities explicit, so that everyone knows what to focus on.

Continuously monitor performance

Track actual results against your plan, resetting planning assumptions and reallocating resources as needed. You’ll remedy flaws in your plan and its execution and avoid confusing the two. However, don’t let data numb you. While data should certainly be used to inform your decisions, sometimes we can rely on it at the expense of our expertise. Keep a balance.

Reward and develop execution capabilities

No list of rules on this topic would be complete without a reminder that companies have to motivate and develop their staff. At the end of the day, no process can be better than the people who have to make it work. No strategy can be better than the people who must implement it. Make selection and development of managers a priority.

Mankins and Steel found that typically an organisation will realise only about 63 per cent of its strategies’ potential value because of defects and breakdowns in planning and execution.

In short, closing the strategy-to-performance gap is not only a source of immediate performance improvement, but also an important driver of cultural change with a large and lasting impact on an organisation’s capabilities, strategies and competitiveness.

These rules may seem simple, even obvious, but when they’re strictly and collectively observed, they can transform both the quality of an organisation’s strategy and its ability to achieve results.

Attribute to original publisher/ publishing organization: Donna Clifford, Consultant at FE Associates, UK, https://www.quality.org/knowledge/closing-the-strategy-to-performance-gap

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