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Tuesday, 11 October 2016

The Definitive 6-Step Guide to Strategy Implementation

I talk with hundreds of CEOs, directors and founders about strategy implementation. I always start the conversation by asking them what brought them to Cascade. What problem are they trying to solve? The answer is almost always the same.
We had a strategy. It lost momentum. And one-year on the truth is, we haven’t made any real progress.
Sound familiar? Well you’re certainly not alone. One of the biggest lessons we’ve learned working with clients, is that great strategies mean almost nothing. Success is about execution and implementation. That’s the reason that we built Cascade. In this post I want to share with you the steps that you need to go through in order to succeed with your next strategic plan.

Step #1: Define your strategy framework

On the one hand, strategy is something that should be embedded in everything that you do. It should be in the DNA of the organization and its people. On the other-hand, if you don’t make an effort to call it out explicitly, you won’t get the focus or traction that you need.
You need to start with a simple framework that introduces a strategy lexicon that everyone can understand and get behind. When someone asks ‘how are our organizational goals going’ – everyone should be on exactly the same page about what that actually means. At Cascade we use the following ‘strategy house’ to define the different elements of our strategy:
Strategy Implementation House
You can learn more about this approach in our Strategic Planning 101 Guide and if you like it, we’ve also got a free template you can download to plug your own strategy in. But the essence is that it gives us a clear way to both structure and talk about strategy implementation. It avoids using too much jargon. Also, we’ve deliberately chosen to include only a vision statement, rather than the more popular ‘vision/mission’ combo. The reason we’ve done this is because we found that people often struggle to understand the difference between the two. Confusion of any kind is the last thing we want when talking about strategy implementation, so we went for the approach of just including a vision statement for the purposes of our framework.
If you need to add more depth to your strategy, consider using a strategy framework such the Balanced Scorecard or McKinsey’s Strategic Horizons . We’ve written a guide to help you decide which framework is right for you – or you can take our fun strategy framework quiz. Whichever framework you choose though, be sure to keep things as simple as possible. (All of the frameworks in our guide pass this test with flying colors!).

Step #2: Build your plan

Now that you’ve got your framework(s) in place, it’s time to move onto the actual creation of your strategic plan. We’ve previously written in depth guides to writing strategic plans so we won’t cover that again here – but assuming you’re using a framework similar to the one above, here’s how we’d suggest approaching the creation of your plan:
  1. Gather the leaders of the organization (founders, CEO, directors, etc) to agree on your vision. You might do this in a workshop, and we’ve written a really popular post that should also help.
  2. At the same workshop, start to write down the values that the organization holds. If you’re struggling, check out this post about creating values, or this post about how we did it here at Cascade.
  3. Finally (same workshop still) write down 3 or 4 focus areas that the team think need to be addressed in order to reach the vision. Our focus area guide is here if you need it.
  4. Then stop! Don’t be tempted to move onto creating organizational goals just yet.
  5. Take your basic framework back to your team(s) and start to get them to independently input ideas for organizational goals under each of the focus areas. You might want to assign one focus area to each member of your leadership team, and have them lead the charge for getting that focus area fleshed out. This is a great way to ensure buy-in to the final product of your strategic plan.
  6. Once you’ve fleshed out the organizational goals, get back together as a group and ask yourself a series of hard questions:
    – If we deliver each of these organizational goals under a given focus area, will we have nailed that focus area?
    – If we deliver all of our focus areas, will we reach our vision?
    – Will our values help or hinder us along the way?
  7. If you’re green across the board, it’s time to go ahead and launch your strategic plan – check out our tips for the best way to do that here.
You might notice that we haven’t covered the bottom layer of our strategy house yet: goals. That’s because part of the strategy implementation process should be about empowering people throughout the organization to come up with their own goals. Now that you’ve got a solid foundation in place, the risks of that process are greatly diminished and will help you gain momentum and buy in to your strategic plan.

Step #3: Define KPIs

Key performance indicators are one of the oldest management tools around – because they work. They keep you honest about your progress, and focused on your outcomes. They need to become your beacons for implementing strategy. Here are a few tips when it comes to coming up with your own – and some examples of KPIs that we use in our SaaS business.
  • Keep them simple. Don’t try to come up with complex ratios that only a small group of people understand. Make them simple and relatable to everyone in the organization.
  • Choose at least 1 KPI for each of your focus areas. More than 1 is fine – but keep the total number for the organization to no more than 6 or 7.
  • Don’t make them too hard to measure quickly. I’ve seen great-looking KPIs that can only start to be measured years after the strategy begins. That simply isn’t going to work for keeping your strategy implementation efforts focused in the early days.
  • Don’t make them all about the $$$ – sure, profit and revenue might be your end-game, but KPIs should be the drivers of those things – measuing the outcomes alone adds little value.
Here are our focus areas and the KPIs we use for each:
Focus AreaKPIs
Clients Find Us– Number of website visits per month
– Size of active mailing list
Clients Subscribe– Free trial to paid conversion rate
Clients Stay & Grow– Client NPS
– Average length of a subscription (days)
– Average revenue per subscription
A Platform to be Proud Of– Average rank on product review sites
Push The Industry Forward– Total google searches for industry keywords
Developing Our People– Staff turnover rate
 
I think we can do a bit better for our KPIs in the ‘Industry’ and ‘People’ space – let me know in the comments if you’ve seen any really good KPIs that cover this. But overall, these KPIs have been a huge part of helping us to implement our strategy.
One final point: You need to update your KPIs at least once per month, or you risk quickly losing focus on them. Spend the time now as part of your strategic planning process to figure out how to get access to the stats/data that you need.

Step #4: Establish your strategy rhythm

The ironic thing about strategy implementation, is that even though everyone acknowledges how important it is – it’s often the first thing to be forgotten about when the going gets tough. People get so caught up in the day-to-day that they don’t have time to focus on the big picture items that will keep the organization moving forward. This rapidly becomes a self fulfilling cycle and is one of the most common reasons why strategies fail.
Decide upfront what your strategy rhythm is going to be – i.e.:
  • How often will you meet to discuss progress?
    We’d suggest a minimum of quarterly but monthly would be a great place to start-off until things get bedded in.
  • Who will meet?
    You’ll need the leadership team at a minimum – but you also need to think about how to involve the rest of the organization in these strategy catch-ups too.
  • How long will the meeting be?
    Don’t relegate strategy to an ‘any other business’ agenda item! Give it a minimum of 1 hour.
  • What structure will the meeting take – which reports will be used?
    More on this in Step #5 below
If you’re looking for a good starting point, this is what we’d suggest:
A monthly meeting called ‘Strategy Checkpoint’ with the leadership team. One hour in the diary. Preferably in a board/conference room. An alternating chair person (strategy shouldn’t be seen as the domain of the CEO alone) who goes through an agreed upon reporting framework, inviting updates from the owners of all of the key initiatives under the strategy.
Follow this up with a quarterly all-staff session where you share the highlights of progress against the strategy and call-out teams that have made a particularly big push.
Finally, try to encourage your team leaders to include a ‘Strategy Checkpoint’ in their own team meetings – this may be shorter (15 minutes would be fine) but is crucial to ensure the cascade of strategy execution to all levels of the organization.
You’ll probably tweak the above based on your own culture. You might find that monthly is too regularly to be meeting, depending on the length of your overall plan. So start with something similar and adjust as needed.

Step #5: Implement consistent & simple strategy reports

Now that your meetings are in place, you’ll want to choose a consistent way of reporting the progress of your strategy implementation. The main objectives of this report should be:
  • Consistency. Everyone knows what to expect and what they need to update prior to the meeting(s).
  • Simplicity. The report should give an at-a-glance view of how the strategy is progressing.
  • Accountability. Ensure that the report includes the names of the owner of each goal (accountability), as well as the names of the people actually getting things done (recognition).
  • Insightful. The report needs to include not only an overview of how the strategy looks now, but how it’s progressing over time. Try to include a comparison period or graphs/charts that show progress over time, to ensure momentum is maintained.
Here’s an example from Cascade of such a report (download the complete sample as a pdf here):
Strategy Implementation Report
This style of report is great for the leadership meeting, because it’s detailed without being over-bearing. However when you’re updating the wider business, you might want to go with a more visually attractive approach. Try something like a Strategy Dashboard (another example below from Cascade):
Strategy Implementation Dashboard
Whichever style you go with, try to keep the same format time-after-time so that people know exactly what to expect.

Step #6: Link performance reviews to strategy

The first 5 steps are the absolute basics to ensure that you successfully implement your strategy. But organizations who truly succeed are those who manage to weave strategy implementation into the fabric of their existence. An easy way to get started with this is to create a formal link between strategy and performance reviews. Nothing shows people how important strategy is more than when it impacts their reviews and potentially even their reward/remuneration.
There are a few ways that you can do this. One is to invest in a performance management system that has these links built into its HR processes. But even if you’re doing performance reviews the old-fashioned way, you can still make a point of awarding specific credit to employees who embrace strategy execution in their role and can clearly demonstrate how they’ve contributed.
You also need to encourage your managers to talk to people about strategy on a regular basis. Consider creating a 1:1 template that managers can use which highlights how a person’s goals contribute to the strategy. We use something like this from Cascade:
Strategy Implementation 1:1 Report

Wrapping it all up

Working your way through the steps above isn’t something you’ll be able to do overnight. It will take a good few weeks, and probably a few iterations. But don’t let that be an excuse not to start. I wish I had a statistic to quantify it, but I can tell you without question that when our clients follow the above process – their strategy implementation succeeds far more often than it fails.
As always, I’d love to hear your thoughts about our strategy implementation steps. Leave us a comment below or get in touch by social media!

 

About the Author:      

About the author: Tom Wright is the CEO and cofounder of Cascade Strategy. He loves everything about startups, technology and salami. Tom works with leaders of some of the world's biggest brands, using that experience as a bedrock for many of his blog posts about strategy.
 

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