April 2011 | Strategy
What does the strategic decision-making process look like in your organization? That question was posed recently to a group of executives in Wharton’s Strategic Thinking and Management for Competitive Advantage, and the answers were remarkably similar. One explained, “Our executive committee determines strategic initiatives once a year. They go into a conference room and close the door, and we all wait patiently for their decisions. And then they open the doors and say, “Here’s our strategy. Go forth and execute.’ But when we try to get clarity around what they want, when we try to make sense of it, we can’t find them. They’re all on the golf course.”
Kathy Pearson, adjunct associate professor in Wharton’s Operations and Information Management Department and a partner in Decision Strategies International, notes, “There’s an element to this story that I hear often. One of the most common reasons for the failure of most initiatives is that they’re set, as that executive described, in isolation.
“This kind of mindset presupposes that there is a point at which strategy stops and execution begins. Many companies treat them as mutually exclusive activities. But to improve your success with execution, you must consider it as an integral part of strategic decision making. It needs to be embedded in that process.”
One of the most serious problems with the “strategy setting in a vacuum” technique is that there’s no consideration about what’s feasible from an execution standpoint. Pearson continues, “When you’re making choices between initiatives, you need to have a candid conversation about feasibility. What can we reasonably expect to be able to achieve? It doesn’t matter if you have the best strategy; if you can’t implement it, then you’re not going to be successful.”
If you’re serious about improving implementation, Pearson outlines the steps to take — before you leave the decision-making table. “As I teach in Strategic Thinking and Management, you first have to have clarity around the objective itself. What’s the reason behind it? Every person at the table must be in absolute agreement. If it’s confusing before it leaves the top of the house, wait until it gets disseminated. No one will understand what’s happening.”
Once your strategic objective is clear, determine feasibility of execution. Can it work? Are the culture, organizational capabilities, and incentives aligned to make it happen? If you identify barriers to execution, you don’t necessarily have to abandon the initiative, notes Pearson. But you do need to do some work in the organization to prepare it.
Finally, develop a plan for execution. That includes communicating the initiative and creating accountability and metrics for success. If there is more than one (and many organizations do have a culture of “initiative overload”), how will everyone know what takes highest priority? Have you assigned roles and responsibilities so that you have clear accountability? Are the resources, both human and financial, identified and available? What are your metrics for success? How will you know if and when you have achieved your objective?
“The process I’m outlining isn’t quick,” says Pearson, “and I often hear some impatience. Executives tell me, ‘We need to respond quickly. We need to be able to develop our strategies.’ And I absolutely agree; today’s world is changing quickly and you need to be adaptable. But that’s not possible unless you’ve got clarity around the overall objective and its execution in the first place. It’s better to go back to the beginning, to rethink the strategic objective, to work through a plan for implementation, rather than to have failure of execution later. Your initiatives can become incredibly adaptable — but it takes some time at the decision-making stage to make that happen.”
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