Strategy execution for some is a challenge. Navigating the gap
between the “strategist” on the hill and those tasked with strategy
execution is full of potholes.
In their ground breaking research with over 1000 companies,
government agencies and non-profits in 50 countries, Gary L.
Neilson, Karla L. Martin, and Elizabeth Powers discovered that
“employees at three out of every five companies rated their
organization weak at execution”
As they point out, “execution is the result of thousands of
decisions made every day by employees acting according to the
information they have and their own self-interest.” To help
companies better execute their strategies, Neilson, Martin and
Powers, identified four building blocks company leaders can use to
influence those decisions. They are:
- Clarifying Decision Rights
- Designing Information Flows
- Motivators
- Structure
(Note: Decision Rights and Information Flow were
found to be twice as effective as Motivators and
Structure)
In 2003 they set out to determine the most effective actions in
enabling an organization to implement strategy. They identified 17
traits which enabled an organization to effectively implement their
strategy. Ranked in order of their importance, they are:
- Everyone has a good idea of the decisions and actions for which
he or she is responsible.
- Important information about the competitive environment gets to
headquarters quickly.
- Once made, decisions are rarely second-guessed.
- Information flows freely across organizational boundaries.
- Field and line employees usually have the information they need
to understand the bottom-line impact of their decisions.
- Line managers have access to the metrics they need to measure
the key drivers of their business.
- Managers up the line get involved in operating decisions.
- Conflicting messages are rarely sent to the market.
- The Individual performance-appraisal process differentiates
among high, adequate and low performers.
- The ability to deliver on performance commitments strongly
influences career advancement and compensation.
- It is more accurate to describe the culture of this
organization as “persuade and cajole” than “command and
control”.
- The primary role of corporate staff is to support the business
units rather than audit them.
- Promotions can be lateral moves
- Fast track employees can expect promotions more frequently
- On average middle managers have 5 or more direct report