Connecting Strategy to Execution

The holy grail of all organizations is connecting strategy to execution.  Many organizations have a great strategy and it doesn’t get executed. And others have no strategy at all, but execute with precision.  

Define strategy at all levels.  Having a 3 year strategy does nothing for the people on the ground.  “Increase customer retention” means nothing to the person working the help desk, of course they are trying to keep customers.  They do nothing differently when they hear that strategy. What will we do this year? This quarter? This week?

Take the example above, if we have a 3-year strategy to increase customer retention.  We believe that by establishing rapport with the customer and keeping the help desk techs happy we can increase retention this year.  This quarter we’re going to stop measuring help desk techs by call times. Now the help desk tech can do something differently, they are no longer trying to end the call.  

Measure it.  Measuring connects execution back to the strategy. “Is our execution meeting the strategy we intended?” It is important that these metrics are not used for not used for reward and punishment. Once you tie rewards to metrics, you invite misuse. The metrics are measuring people, they are purely for calibration, “are we moving in the right direction?”

Felipe Castro promotes OKRs (Objectives and Key Results) as a strategy setting and measurement tool.  Once you have a strategy set, you’ll need to set a metric goal and measure your results.   Why do we need to set a goal? Measuring against a goal tells you whether you were right. If you miss the goal, it tells you that one of 2 things happened, 1) you were wrong about your hypothesis; the call time goals were not hurting customer retention.  2) You failed to execute. Maybe people were so ingrained to keep calls short, they didn’t actually take more time with the customer. Now your challenge is to find out how to execute in a way that proves/disproves the hypothesis.

What is the difference between strategy and execution?  Strategy is “why” you are doing something, while execution is about “how” you’re going to do it.  We often hear people describe strategy as “build a new system”, and Sally Elatta of Agile Transformation Inc. always asks “Why are you doing it?”  The answer to that “why?” is your strategy.

Isn’t strategy just fluffy stuff?  Everyone knows we need to increase revenue.  Do we really need to spend time on this? People on the ground often think that strategy is fluffy stuff, there’s no problem to solve, no “thing” to create.   The reason that strategy is so important is because it drives alignment and priority for the whole organization. It also creates a shared purpose for the organization. Otherwise you’re just coming in an pushing the rock up the hill everyday.  The strategy of increasing revenue seems obvious, but think about what that says; it’s saying that we are not going to focus on cost savings right now, and instead focus on revenue.

How strategy helped your organization? Let us know!