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How to overcome three unexpected strategy challenges

Wouldn't it be great if great strategy always translated to great results?

Photo credit: Unsplash ow.ly/A20630egWwo

A 2012 survey found that while 80 percent of leaders believed their companies were good at strategy creation, only 44 percent believed they were good at implementation. Only 2 percent of those leaders surveyed believed they would achieve 80–100 percent of their strategy objectives. Why is there such a huge divide between intention and results?

Jill Higman, Executive Director of Government Services Strategy and Performance Management at Aetna, was kind enough to speak with us. While working at Aetna, Higman had the opportunity to bring her experience of implementing the strategy management system in Government Services and other parts of the organisation. Her team has trained other Aetna colleagues in strategy management, sticking around to help them implement. Here are three challenges she’s encountered and how to overcome them.

1. Separate your strategy from your operations
“It’s amazing how difficult it is to get people to put away their operational hats and focus strategically,” Higman says. “The instinct is to include everything in your strategy because it is all important.” On paper, it is easy to separate your operations from your strategy. And yet too many people treat them as the same thing. This usually results in true strategy taking a backseat to operations, meaning that a business continues in pursuit of the status quo, not improvement or change.

Begin by recognizing the difference between strategy and operation: operations include all things necessary to keep your business running, and strategy includes all things necessary to meet your goals. Don Ryder, business leader at Palladium, suggests asking a few questions, which will help you both determine whether or not an objective is operational, and whether or not that operation is valuable for your company:

  • Is the objective an actionable statement?
  • Does the objective represent an organisational priority (usually 3-5 years)?
  • Does the objective represent change, or business as usual?
  • Is the objective meaningful for the rest of the organisation?

2. Connect your strategy to your operations
Don’t worry; we aren’t contradicting ourselves. Once you’ve clearly identified your strategy and operations and drawn a line between them, you want to build a bridge to connect them. The point isn’t to recombine them; the point is to show how two distinct concepts can work together.

“We spent a lot of time trying to articulate that what’s being reviewed during a strategy meeting is different from what’s being reviewed in an operational meeting,” Higman says. When employees don’t see the connection, you run two major risks: (1) they feel that that their work is being duplicated and is redundant, or (2) they feel that the amount of management process is redundant and they grow resentful of it.

When having these conversations with employees about connecting strategy and operations, it’s helpful to remind them of the big picture. For example, Palladium’s overarching vision is known as Positive Impact: “the intentional creation of enduring social and economic value.” By proving each strategic and operational process will contribute to this vision, everyone at Palladium can get on board and get to work.

3. Measure the right things in the right way
The Balanced Scorecard has long been a tool for managing all aspects of your business. By now you should know the importance of distinguishing between operational and strategic metrics. KPIs are crucial to determining your strategy’s success. “Earnings in a strategic context are lagging metrics that show if process changes are having an impact,” Higman says. “It’s a different conversation, even though you might be talking about earnings in other meetings.”

A balanced scorecard will ensure you’re spending your time and resources efficiently. “When effectively implemented, companies improve performance by measuring what matters and prioritising work,” says Howard Rohm, CEO of the Balanced Scorecard Institute. This scorecard can go beyond evaluating things like financial and deliverable performance; company culture and managerial performance can also be tracked. Measuring standards such as meeting sales goals or developing people can help make sure your company is running well from both an external and internal perspective.

Another element to consider is how strongly your team buys into this measurement strategy. Getting people on board and up-to-date on how the process works and why it matters is the other half of the battle. Higman points out a few factors, which she learned from her experiences with Aetna, to consider when it comes to bringing your team on board with the scorecard process:

  • Word-of-mouth: the more you can get your team members talking about their excitement for the product, the better adoption rate the rest of your team will have. “When one team or organization uses and really likes it, other organizations will recognize the power of it, and will reach out to adopt it,” says Higman.
  • Consider the learning curve: implementing the scorecard and associated management process is complex and lengthy, so be sure to make your team feel comfortable with the new terminology, revised strategy, and commitment required to see the value.
  • Have a vision that translates: “We [at Aetna] do an excellent job of creating a compelling vision and we know how to translate that down into understandable strategic pillars,” says Higman. The key is then creating objectives and metrics that align within and across the businesses; a crucial integration step.

It’s time to be more confident in your strategy. By distinguishing strategy from operations, drawing connections between them again, and measuring the right metrics, you can improve your strategy execution.

Contact Palladium today to get started at consulting@thepalladiumgroup.com.