Connecting strategy to execution is the holy grail of most organizations. It’s something leaders strive for, but so often the strategy gets lost somewhere in translation. Why do we have much trouble keeping strategy connected on the ground?
In one organization, workers are told: “Do your job as we tell you to, but just make sure you can justify how it ties to one of these 5 strategic objectives.” Being able to justify something is a far cry from executing the strategy for the best outcome.
Consider the job of a help desk manager. The new strategic objective is to improve customer satisfaction. Could the help desk manager say “When I do my job it improves customer satisfaction because we help customers who have problems”? That explains it, but is it moving the strategy forward?
What is blocking strategy from successful execution? What can you do to connect the two?
People close to the work lack context
Many organizations have a “Permafrost Layer” between strategy and execution. Senior executives conceive of the strategy and deliver inspiring presentations to the masses. Then some mid-level executives define the work to execute these strategies. Below the Permafrost Layer, tasks and deadlines are doled out.
What does this look like on the ground? It looks like a tight deadline with a lot of work. The people doing the work don’t have time to consider whether the activities will meet the strategic objective. And if it doesn’t move the needle the people on the ground say “Those decisions are above my pay grade, I just do as I’m told. The executives want this.”
OKRs (Objectives and Key Results) is a popular technique for connecting strategic context and execution. OKRs and similar techniques are a great way to drive dialogue around strategy and execution. Any technique will fail if it becomes transactional. OKRs and similar techniques work great as a catalyst when organizations fully embrace the intention and not simply the process.
Making the connection is key, whether you use something structured like OKRs or a simple model like increasing dialogue around strategic context.
The Portfolio team is too Administrative
The group of people that sit between strategy and execution (often this is the Portfolio team) are pivotal to the success or failure of the strategy, but not for the reason people think. Many people assume this is a key role because they determine the “right” things to work on. Bullshit. Here’s why this role is pivotal, and also why it’s often bungled.
- Continuous validation that execution meets the strategy.
What typically goes wrong here? Mid-level executives define the work to meet the strategic objective for the year. They then lay out deadlines through the year and start assigning work. There is an assumption that these are the right activities to meet the objective. All reports measure progress against the plan. There is governance to track the success of the execution, but usually not to validate that the activities are meeting the strategic goal.
The portfolio team needs a set of criteria for each strategic initiative, that they will use for validation. The questions change as the work progresses. Here are some examples of questions the team might use:
- How much improvement did we see in a small test group?
- What are the biggest risks and are we eliminating them?
- Is there an opportunity to better execute this strategic objective through a different activity?
- Maximize value, minimize work.
What typically goes wrong here? We come up with a bunch of great ideas and we want them all done as soon as possible. The disconnect appears when the portfolio team believes that the defined activities will deliver on strategy if they get it all done. In reality, the Pareto principle is at work; 20% of the work will deliver 80% of the value. The portfolio team is not responsible for getting it all done, rather they are responsible for coaxing maximum value with minimal work. This is a big mindset shift for many organizations.
Here are 2 ways that mature portfolio teams maximize value and minimize work.
- Relentless prioritization. When the portfolio team prioritizes, it allows working teams focus on the activities that will give the best yield. The result is optimization around results, instead of optimization around a volume of activity. Consider this, if you are working on the most valuable, important thing, why would you work on anything else?
- Limit Work in Progress. Throttling work goes hand in hand with prioritization. We discussed Limiting WIP in a prior post. The basic idea is that limiting the number of things people work on, speeds the time to delivery and reduces the investment tied up in “work inventory” or partially done work. It also has the nice side effect of giving the working team space to develop breakout solutions. A mature portfolio team takes a strong stance against pressure to do everything and has results to support it.
How well is strategy connected to execution in your organization? Let us know!